Marketconditions

Marketingstrategy

Marketingtactics

Marketassessment

Marketperformance

Manufacturingconditions

Manufacturingstrategy

Manufacturingtactics

Manufacturingassessment

Manufacturingperformance

Human resourceconditions

Human resourcestrategy

Human resourcetactics

Human resourceassessment

Human resourceperformance

Financialconditions

Financialstrategy

Financialtactics

Financialassessment

Financialperformance

ENVIRONMENTAL ANALYSIS

BusinessStrategy

FEEDBACK

BusinessPerformance

Assessment of Business Conditions

BUSI

NES

S LE

VEL

FUN

CTIO

NAL

LEV

EL

STRATEGY

Marketobjectives

Manufacturingobjectives

Human resourceobjectives

Financialobjectives

Check financial performance

Check customer reaction to brands, prices, and advertising

Check production operations

Check out competition• strategic direction• tactics• market’s response

As needed, adjuststrategy // brand designs and prices // advertisingsales management // production plan

Check financesFeed decisions into Marketplace Live simulator

Brand judgment (0 to 100)

Price judgment (0 to 100)

Ad judgment (0 to 100)

100 indicates complete satisfaction. 70 would be a good brand and ad rating until new technology is available in Quarter 4.

Price ratings should be near 100.

Give the customer what they want and do so better than the competition.

Hot

ColdLess More

Hot

ColdLess More

Hot

ColdLess More

Hot

ColdLess More

Hot

ColdLess More

Hot

ColdLess More

Revise brand designs or create new ones // Revise ad copyAdjust prices // Hire more sales people or deploy differently

Add or take away elements to find the sweet spot in the customer’s response function.

Brand and ad designs // Prices and sale prioritiesSales strategy // Sales staffing // Ad placements

Demand by brand by segment Human resources // Manufacturing

• Reverse engineer the strategy of each competitor• Determine who is a threat and who is not• Determine strengths and weakness of competition• Emulate good decisions• Predict direction of competitive moves • Adjust strategy and tactics in reaction to competitor strengths

and weaknesses and in anticipation of future moves.

Firm profitability // Brand profitability Return on investment // Asset management // Etc.

• Discover which brands, markets, and business functions are making the greatest and weakest contribution to the bottom line.

• Deploy resources to correct weaknesses and take advantage of strong performers.

High productionLower unit production costs

Risk of too much inventoryUses up large volumes of cash

Risk of brand obsolescence (wrong product in warehouse)

Low productionLow cash requirements

Higher per unit production costs

Risk of too little inventoryStock outs // Lost revenue // Customer ill will (unhappy

customers)

The Balanced Scorecard

It is too easy to get caught up in market share and short-term profits.

Long-term viability requires that managers also deliver customer satisfaction and invest in the future.

The balanced scorecard measures both the long- and short-term.The best managers will be good in all areas measured.

Financial performance x Market performance x Marketing effectiveness x Investments in the firm’s future x

Creation of wealth x Asset management x Manufacturing productivity x Financial risk x HR management

The Management of Strategy – Learn From:

Your customersYour competitionYour operational informationYour employeesYour financial information

to skillfully adjust your strategy and tactics

Using the tools of managementaccounting reports (financial statements)industry financial benchmarks (industry

financial ratios)human resource reportsmarket feedback profitability analysis (activity based costing)