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Anatomy Of A Great Strategy Dan Greene

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... Walgreens * Achievements of Top Performers The performance of the top companies researched in the Return Driven ... 1_Sample presentation s [1] ... – PowerPoint PPT presentation

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Title: Anatomy Of A Great Strategy Dan Greene


1
Anatomy Of A Great StrategyDan Greene
2
  • So Why is Strategy So Important?

3
Managing The Present
  • So Why is Strategy So Important?
  • The challenge for managers in our industry is to
    manage the present better, much better, as
    preparation for the unforeseeable future.

4
Strategy Implementation
  • Strategies Are Designed To Be Implemented
  • Ernst Young 66 of Strategy is Never
    Executed
  • Why?
  • Doing something new is hard
  • Companies must overcome long standing traditions
  • Office politics and conflicting interests
  • Poor communication channels

5
Strategic Choices
  • Companies Make Strategic Choices
  • Strategic Choices Based On
  • Trial and Error What has worked?
  • What has not
    worked?
  • What is Managements appetite for Risk?
  • What have you learned from your analysis to date?
  • What are your thoughts on how to best proceed?

6
Strategic Frameworks
  • Successful Strategies are simply a framework that
    helps business leaders better analyze, understand
    and employ the activities that have been shown to
    produce superior returns and create wealth from
    our business.

7
Insight from Good to Great Companies and DRIVEN
Companies
RETURN DRIVEN Abbott, Kimberly-Clark,Gillette,
Walgreens
  • DRIVEN Criteria for Selection
  • Start with gt20,000 companies
  • Three criteria (for gt 10 years)
  • Insight from DRIVEN
  • Innovate the Entirety of the Offering
  • Target Unmet Needs of the Right Customer Groups
  • Engage Employees and Others
  • GTG Criteria for Selection
  • Start with 1,435 companies.
  • Screening and selection process Total Shareholder
    Returns
  • Insight from GTG
  • Level 5 Leaders
  • Hedgehog Concept
  • Right People on the Bus.
  • Confront the Brutal Facts

8
Criteria
  • Achievements of Top Performers
  • The performance of the top companies researched
    in the Return Driven Strategy is based on 3
    Dimensions
  • Superior and Sustainable ROI
  • Growth in terms of net worth while maintaining
    superior ROI
  • Provide company owners with above average returns

9
Performance Measurements
  • CFROI vs Cost of Capital

10
Cash Is A Fact
  • Cash Is A Fact. Profit Is Opinion

11
Cash Is A Fact
  • You Can Be Profitable and Still Go Bankrupt

12
CFROI
  • Cash Flow Return On Investment (CFROI)
  • How well did your investments pay off?
  • Investments, not only in equipment, but in the
    right people, marketing programs, etc.

13
Opportunity Cost
  • Cost of Capital
  • We looked at this because every business requires
    some amount of reinvestment to fund equipment,
    inventory, receivables, and other assets.
  • These investments have a Real Opportunity Cost.
  • The CASH spent on investments in the business
    could have been invested elsewhere.

14
When To Grow
  • Every Manager should seek to reinvest when rates
    of return can be generated higher than the Cost
    of Capital, and consider shrinking the business
    when returns are below.

15
Return Driven Strategy
16
Commitment
  • OBJECTIVE Increase Wealth or Net Worth
  • Wealth of the Company
  • Wealth and Security of Employees
  • Define in both monetary and non-monetary terms,
    the goals and risk levels

17
Benefits of Wealth Creation
  • What comes from an increase in the Companys
    Wealth
  • Pricing Power
  • Reinvestment into productive assets that will
    generate higher returns
  • Improve the livelihood of not only owners, but
    employees and customers

18
Return Driven Strategy
19
Wealth Comes From The Customer
  • Creation of Wealth and Higher Returns Come
    Through The Customer
  • By fulfilling their unmet needs
  • High Performance businesses deliver an offering
    which customers believe is not otherwise available

20
BMW
21
Target Markets
  • Targeting Appropriate Customer Groups
  • We need to target clients whose needs are large
    enough to justify the upfront and ongoing
    investments to create and deliver the right
    offerings. (Example Aluminum Extrusion in the
    Rental Market, in-house tension fabric
    capabilities)
  • Recognize how being the dominant provider to any
    particular customer group sets the stage for
    higher returns (based on volume), but still
    requires fulfilling the customers unmet needs
    (General Contractors)

22
Return Driven Strategy
23
Competencies
  • There are three Competencies required to achieve
    increased wealth in the higher performance
    companies
  • Deliver Offerings (often taken for granted)
  • Innovate Offerings
  • Brand Offerings

24
eBay
25
Innovation
  • Recommendations on Innovation would be
  • Innovate the Entirety of the Offering
  • Innovate when previous offerings are dying
  • Innovate offerings with no Pricing Power

26
Branded Offerings
  • Branding our Offerings
  • Trade shows and events are two of the most
    powerful branding tools available to clients.
  • Brands create the connection between the customer
    and the need it fulfills
  • We should brand consistently with the Delivery
    Of Our Offerings to create the strongest
    connection
  • Brand the Offerings and the need, Not The
    Company.

27
Abbott Laboratories
28
Return Driven Strategy
29
Support
  • Five Contributors to Supporting the Delivery,
    Innovation, and Branding of our offerings
  • Partner Deliberately
  • Map and Redesign Processes
  • Engage Employees and Others
  • Balance Focus and Options
  • Communicate with a Purpose

30
Yahoo
31
Support
  • Five Contributors to Supporting the Delivery,
    Innovation, and Branding of our offerings
  • Partner Deliberately
  • Map and Redesign Processes
  • Engage Employees and Others
  • Balance Focus and Options
  • Communicate with a Purpose

32
Return Driven Strategy
33
Idea Sharing
  • Idea Sharing

34
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