3 The Operational Review (see Apple Case Study
for a full strategic, business, and operational review)
Depending on the generic strategies a firm wants to adopt, based on what it can do best, we first conduct, as described on the previous page, a Strategic Review focused on the competition. This is followed, as shown on this page, by a Business Review focused on the customer, and finally, to make it all work, by an Operational Review, as developed in our case study on Apple
1 The Generic Strategies
To quote Porter, "firms pursuing the same strategy directed to the same target market constitute a strategic group". Once the firm has decided on its strategic positioning within its strategic groups relative to its competitors' in the industry, as either a cost leader, quality leader, or niche leader, it must develop its own unique marketing, technology, and sourcing strategies and be able to execute them profitably (generating both high market share and high percentage margin)
2 The Business Review
Because we've conducted hundreds of reviews throughout our 30+
year careers, we generally have a good snapshot by the 3rd week.
However, the subsequent due diligence phase can take a lot longer:
A Qualitative Review which looks at both product development
and omnichannel development. This is where today's Web
analytics tools can provide real-time insights on a customer's buying behavior along his journey across the omnichannel's network of connected physical and online stores. Surveys are also used
A Quantitative Review based on the qualitative review we
determine market demand and the targeted firm's competitive
market share. Capturing user behavior, elusive, is key
A Financial Review to ensure that the strategy will turn a profit for the targeted firm, maximizing its revenue (marketing), minimizing both its costs (operations) and its financing needs (finance) in its business (production)
A Business Model Review We look for business models able to achieve both high market share and high profit margin very early on for the targeted firm
A Risk Model Review We ensure that all 5 sources of risk, namely firm, competitive, industry, macroeconomic, and cybersecurity risks, have been integrated into the target firm's investment strategy (return on capital) and financing strategy (cost of capital). We look at
Analysis the handful of marketing, operating and financial
assumptions underlying the risk-return analysis
Decision-making the firm's (re)organizational agility, which
enables it to tactically and strategically change course when
the assumptions are no longer valid, as so often happens
Execution the way the firm actually uses both natural and
financial hedges to take long or short positions to offset its long
or short risk exposures (the net position should ideally be nil)
A Business Function Review is finally conducted around 4 business functions as follows:
Running the Business:
Marketing (customers)
Operations (people)
Finance (money)
Control (performance)
To execute the strategy on a day to day basis, we've chosen to treat the Operations function, comprised of the 6 functions below, normally
managed separately in isolation, as a single function, put under the
responsability of a single officer, the Operations Manager (COO).
The latter's goal is a qualitative one, to serve the customer, rather
than a quantitative one, to increase sales revenue per se. Resources are
then allocated and costed for each function:
Serving the Customer:
Sales
Production
Distribution
Payment
Service
Control (performance)
Resource allocation and costing:
People (skills)/money/technology
Control (performance)
Marketing Strategy
The Business Review
Customer
Analytics
Customer Profitabilty
Customer Acquisition
Customer Service
Marketing
Brand and Innovation Management
OPERATIONS
People
Control
Performance
Marketing Strategy
(customers)
Competitive Strategy
(people)
Customer Retention
The Industry
Finance
Money
Finance
Money
Financial Strategy
(money)
Customer
Delivery
The Customer
Sales
Production
Distribution
Payment
Service
Competitive Strategy
How We Do It
Execution
The Business and Operational Reviews
Control
(performance)
The Market
To contact us
Or Man Partners