Charting a company’s course for the near-term future, outlining the steps to its goals, is critical for success. Overtly and correctly making strategic decisions, deciding what markets to pursue, what advantage over the competition to exploit, how to extract value from the market once captured, creates success. Squeezed by the demands of operations, this critical function often gets ignored by management or lacks a process that fosters the innovation, or insight needed to succeed. A budgeting cycle is too often the only process that considers strategic challenges. Inadequate in its scope or approach, a budget-centric approach misses key opportunities for creating value.
The Mountain Group advocates a planning process that goes far beyond the typical amassment of analysis into policy and option books ending with senior executives pooling ideas in a conference room: Using a company approach, distinct from the budgeting cycle, new insights, and answers found to common strategic decisions.
- Market selection is focused on customer patterns, their needs, trends and size
- Competitive positioning is enhanced through an examination of industry dynamics, competitors strengths and weaknesses, potential for new entrants or substitutes and alternative options and risks
- Execution blocks are identified by assessing the strategic options with the company’s cultural and operational issues
- Financial modeling of options and risks allows for insight on key business drivers and selection of performance metrics, as well as five-year rolling financial models
- Joint ventures, mergers, or acquisition options are evaluated in the context of markets, competitive advantage, culture, and business practices
- Development of exit strategies and business unit disposal are evaluated similarly.