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Fast Strategy

Presentation for Alan Hargreaves
by

Heidi Ramsay

on 31 October 2013

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Transcript of Fast Strategy

Cyclical Timing
whats the best idea?
Financials
Market Position
Sustainability
“Creating value is not part of the manager’s mission”
"it
is
the managers mission”
Time
Effectiveness
what this
session is about:
making value central to strategy
identifying tactics that create value
rating our performance
creating action to boost value
why worry about what it's worth?
borrow money
succession
merger
acquire or be acquired
raise equity
restructure
invest/divest
valuation as a
strategic starting point
strategic target
planning perspective
simplifies decisions
achieves the mission
consolidate
raise debt
bequeath
buy out partners
sell to your partners
go public
privatize
what grows value?
financials



Strategy
Fast
cash flow always looks complicated
simplify: there are only three sources
cash from operating activities
what you do
what you've got
how you pay for the first two
get more money in
get it in quicker
pay less money out
pay it out slower
sell redundant assets
apply resources to new processes
own or lease
rent or buy
cash from investing activities
cash from
financing activities
get best terms
raise equity
reinvest profits
inject cash










forecast to fulfill
the goal is to reduce the cost of capital
why cash flow is so important to value
how to get a free Lexus
taking the first step
fast strategy
financials
terms and conditions
inventory management
payment incentives
preferred suppliers
divest legacy assets
reassign resources
rent or buy
lease or own
renegotiate credit lines
add debt
dividend policy
shareholder funding
full spectrum cash management
forecast to fulfill
holistic strategies
cost-of-capital targets
use of KPIs
appropriate ratios
link compensation to cash flow
decision yardsticks
key drivers
quality of income
management strategy
brand strength
risk management
size
VALUE DRIVERS
recurrent/cyclical/annuity
low/high margin
defensive/mature
growing
owner-driven
vulnerability to change
succession management
complicated structure

brand power
historic relationships
easily replicated template
with or without you

governance
transparency
change management
barriers to entry

critical mass/financial power
market/niche power
growth strategy
M&A policy
sustainability
key drivers
quality of customers
competitive pressure
market risk
market outlook
market power
market position
demand outlook
demographics
scalability
value of distribution channel
contractual relationships
relative financial power
pace of innovation
technological change
niche domination
alliances/adjacent businesses

black swans
economic environment
regulatory change
shifting consumer preferences
reputation risk, enhancement
industry structure
financial outlook
leverage to change
leverage to growth
price sensitivity
value-chain relationships
customer integration
purchasing power
distribution power
price, place, product, promotion
whole of business strategies
the mission does not change
Static plan Vs Dynamic action
slow
simple
complex
fast
slow
simple
complex
fast
slow
simple
complex
fast
slow
simple
complex
fast
slow
simple
complex
fast
slow
simple
complex
fast
how to really stay fast
how to stay fast
how to stay fast
what's the big picture
global
macro
micro
product
firm
cyclical timing
politics
cultural shifts
regulatory changes
markets

employment outlook
interest rates
demographics
fiscal policy
industry structure
cyclical shifts
vertical/horizontal consolidation
investor focus

life cycle
fashion shifts
technology challenges
reinvention opportunities

growing/mature/declining
harvest/reinvent
strategic potential
redirected resources

cyclical strategies - the firm
Capital and cash flow limited
Markets relatively open
Risk is high
Narrow range
Turnover, not profit is the target
Focus on sales growth
Novel marketing initiatives
Building distribution channels/outlets

New competition arrives
Stronger cash flow
Rate of sales growth eases
Management issues arise

Branding focus
Expand/diversify product range
Differentiate products/services
Staff internal processes

Market saturated
Broad product range
Strong market position
Established internal processes

Constant promotion a priority
Acquire new business lines
Buy distribution or supply channels
Review management; test new ideas

Market share falling
Customers finding substitutes
Internal processes hinder change
Slow to adapt to market shifts

Cut costs and harvest volume
Liquidate unprofitable assets
Merge, be acquired, reinvent
Eliminate 80, focus on 20

taking the first step
ten recessions in my lifetime, so far....
nine recoveries in my lifetime, so far....
the cycle of just about everything
recession
recovery
prosperity
next
recession
recovery
prosperity
next
new
growing
mature
declining

new
growing
mature
declining

new
growing
mature
declining

cyclical timing
fast strategy
What is the mission?
Vision?
Goal?
Price?
Value?
sustainability
market power
cyclical timing
Growing
Mature
Declining
New
Thank you!
strategic plan
management action

A. To achieve the mission
Q.What is the role of strategy?
The mission is to optimize value for all shareholders over time
How do we achieve the mission?
Full transcript