Design Institute - Prototype Awards Seminar
20 Nov 2004
Presentation on Business Strategy
Strategic Identification & Screening of
Business Development Opportunities
Presented by Troy Dyer
© Copyright Troy Dyer 2004
Presenter background
•
Troy Dyer is a management consultant specialising in business & corporate strategy. He works
independently via his firm Audax Ideas. His clients range from large listed companies to privately
owned medium sized high growth businesses. Troy’s services include advising high growth business
on raising capital for business development and expansion. For more info refer www.audaxideas.com
•
Troy also serves as the Executive Officer of SAVCA (the South African Venture Capital & Private
Equity Association), one of his clients at Audax Ideas. The assignment is on a part-time basis,
complementing his strategy consulting activities. Working with the SAVCA Chairman and Executive
Committee, Troy’s responsibilities are to facilitate and guide the strategic development of the VC/PE
industry in SA, to develop and deliver an annual menu of value-adding services to SAVCA members,
and to manage the administrative aspects of the association. For more info refer www.savca.co.za
•
In addition to consulting, Troy has pursued his academic interest in the areas of entrepreneurship and
strategy by lecturing on a part-time basis. He has been a visiting lecturer on the MBA programmes of
two of SA’s top rated business schools - the Gordon Institute of Business Science (also known as
GIBS - at the University of Pretoria), and at Wits Business School.
•
Prior to specialising in strategy consulting, Troy completed his B.Com and B.Acc degrees at Wits
University, and his MBA degree at the Wharton School, University of Pennsylvania. He is qualified as
a CA(SA).
Design Institute - Prototype Awards Seminar - 20 November 2004 - Presentation on Business Strategy
© Copyright Troy Dyer 2004
Page 2
Objectives of this presentation
•
Discuss linkages between
– Personal Vision
– Business Vision
– Business Opportunity
– Business Strategy
•
Present a set of analytical tools and frameworks for
– Identifying and screening business opportunities
– Categoring business opportunities
– Developing a high level business strategy
•
Indicate how the above fits into a Business Plan framework
Design Institute - Prototype Awards Seminar - 20 November 2004 - Presentation on Business Strategy
© Copyright Troy Dyer 2004
Page 3
Connecting personal vision to business strategy
Business
Opportunit
y
Personal
Vision
Business
Vision
Design Institute - Prototype Awards Seminar - 20 November 2004 - Presentation on Business Strategy
Business
Strategy
© Copyright Troy Dyer 2004
Page 4
Constructing & Deconstructing Personal & Business Vision
Personal and / or Business Vision (1)
Core Ideology
Core Values
• The individual and / or
company’s essential
mores and principles that
guide its choices and
actions
• Enacted and not merely
espoused values
Envisioned Future
Core Purpose
10 to 30 yr “BHAG”
• The individual and
/ or company’s
essential reason for
existing and for
going forward
• Long term
mission
• “Big, Hairy, Audacious
Goals”
• Can be quantitative
or qualitative
• Involves David vs.
Goliath type of
thinking
• Dreaming “the
impossible dream”
Vivid Description
• A clear picture of what
the future will look like
• Guided by passion,
emotion and conviction
• A compelling image to
which everyone can
relate
(1) Model adapted from Building Your Company’s Vision by James Collins and Jerry Porras (HBR, Sep-Oct, 1996)
Design Institute - Prototype Awards Seminar - 20 November 2004 - Presentation on Business Strategy
© Copyright Troy Dyer 2004
Page 5
Using PESTLE framework to identify growth opportunities
Strategic
Forces
(PESTLE
framework)
Categories of
Entrepreneurial
Business
Opportunity
Ideas for business
opportunities
Investment
criteria
Top 5
Opportunities
P
E
S
T
L
E
PESTLE Forces:
• Political
• Economic
• Social
• Technology
• Legal
• Environmental
Model developed by Audax Ideas Management Consulting
Design Institute - Prototype Awards Seminar - 20 November 2004 - Presentation on Business Strategy
© Copyright Troy Dyer 2004
Page 6
Combining the PESTLE analysis with an industry
structure analysis to identify growth opportunities
New
Entrants
Economic
Supplier
Power
Industry Rivalry
Buyer
Power
Substitute
s
Adapted from model in Competitive Strategy - by Michael Porter
Design Institute - Prototype Awards Seminar - 20 November 2004 - Presentation on Business Strategy
© Copyright Troy Dyer 2004
Page 7
RA: a measure of the combined
attractiveness of:
(1) The venture in terms of its economic
profile and harvest potential
(2) The market in terms of its capacity
to generate large, sustainable and
growing profits
(3) The industry in terms of the relative
power of various forces which determine
the size and share of margins
Venture
Market
Industry
Relative Attractiveness (RA)
Linking personal vision, business vision, business
opportunity and business strategy
Ideal
New
Venture
Position
Relative Competitive Position (RCP)
Capabilities
RCP: a measure of:
Customers
(1) The extent of our capabilities to provide a
product or service,
Entry Point:
What are the ventures out there that:
(1) we want to create or develop
(2) represents a business opportunity
(3) we can (or could) do well at
(2) which our customers want and are willing to
pay for,
Competitors
(3) in a manner which is better than our
competitors, in a sustainable and valueadding manner
Model developed by Audax Ideas Management Consulting
Design Institute - Prototype Awards Seminar - 20 November 2004 - Presentation on Business Strategy
© Copyright Troy Dyer 2004
Page 8
• Business economics,
risks and projected
returns on investment
• Market size, growth and
potential margins
• Industry structure and
degree of
competitiveness
• Macro-economic, political
& regulatory environment
Relative Attractiveness of
Opportunity
The RA/RCP matrix provides a useful approach to
mapping out a business strategy
High
(2) Build
required
capabilities
(1) Invest &
pursue
opportunity
Low
(4) Avoid /
Wait & Reassess in
future
(3) Identify
niche
opportunities
Low
High
Relative Competitive Position
• Customer needs & wants
• Competitor capabilities
• Our capabilities
Design Institute - Prototype Awards Seminar - 20 November 2004 - Presentation on Business Strategy
© Copyright Troy Dyer 2004
Page 9
Products & Services
The Business Development Matrix is another way to map
out different strategies for growing a business
New
Existing
Product
Development
Market
Penetration
Existing
New Business
Development
Market
Development
•
Identify opportunities for each type of
business development
•
Assess relative attractiveness of
different opportunities
•
Assess our relative competitive
position in the pursuit of different
opportunities
•
Agree overall business development
strategy
New
Target Customers & Markets
Design Institute - Prototype Awards Seminar - 20 November 2004 - Presentation on Business Strategy
© Copyright Troy Dyer 2004
Page 10
The work done on business strategy fits into an overall
Business Plan framework
Executive Summary
•
•
•
•
•
•
•
•
Description of the business concept, the
business opportunity and the business
strategy
Target market and projections
Competitive advantages
Costs
Economics, profitability
Harvest potential
The lead entrepreneur & the management team
The offering to investors
Detailed Contents
•
•
•
•
•
The industry and the company and its products
/ services
Market research and analysis
Economics of the business
Marketing plan
Design and development plans
•
•
•
•
•
•
Manufacturing and operations plan
Management team
Overall schedule
Critical risks, problems, and assumptions
The financial plan
Proposed company offering
Appendices
•
•
•
Financial Analysis
Industry and Market Analysis
Manufacturing / Operations Analysis
•
•
•
Organisation Design
Product Design
Other
Source: New Venture Creation, by Timmons and Spinelli - Chapter 12
Design Institute - Prototype Awards Seminar - 20 November 2004 - Presentation on Business Strategy
© Copyright Troy Dyer 2004
Page 11
The Prioritization Matrix may be used to structure a more
detailed Action Plan
High
Ease of Implementation
(in terms of complexity,
resource requirements,
etc
Low
2. Other
quick hits second level
of priority
1. Quick Hits
- actions
with highest
priority
4. List
actions now,
review later
to see if
priority has
changed
3. Medium
term actions
- detailed
plan may be
required
Low
High
Potential Impact of the Action
(in terms of positive contribution
to business objectives
List the actions and then evaluate, categorize and prioritize according to the above matrix
Design Institute - Prototype Awards Seminar - 20 November 2004 - Presentation on Business Strategy
© Copyright Troy Dyer 2004
Page 12
Thank you