Professional Documents
Culture Documents
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1 Introducing the Strategy Questionnaire
1.1 Introduction
Strategy is not a word that fits easily in the pragmatic and problematic
arena of small business, particularly where political and economic
unpredictability may encourage you, as an owner manager, to take a
very short-term perspective of your business. The problem is that
without developing a longer term perspective even of a rudimentary
nature, your business is unlikely to grow. Adopting a longer-term view
is particularly important within the context of increasing economic
liberalisation and intensifying foreign competition.
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The strategic questionnaire, which is central to this part, should
provoke thought and discussion, thus helping to raise the level of
debate in your business. The questionnaire is designed so that the
questions themselves are straightforward, and answered by yourself,
and other key staff who run the business. Simply posing them to
members of staff (and possibly to your customers) will be thought-
provoking.
Because of its potential to bring about major change, strategy was until
quite recently seen as the preserve of corporate planning, an exercise
carried out at fixed intervals and then for the most part ignored. Today
it is accepted that managers in all sizes of businesses should be
encouraged to think strategically if their organisations are to prosper.
The strategy developed is seen as providing a broad framework that
allows for adaptation and innovation in response to what is often a
volatile and unpredictable business environment.
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Strategic management is not just about strategy development, it is also about
communicating the chosen strategy to your business stakeholders and seeing
that it is put into practice in your business. The whole process looks something
like this:
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1.4 The Benefits of Thinking Strategically. Most businesses have the
informal elements of a business strategy, although this is often not
explicit. You are likely to have long-term objectives, often not written
down, but carried in your mind. In the absence of a formal approach, a
strategy will emerge by default, being the product of the stream of
decisions made at various times. If these decisions are made in the
absence of a recognised framework, the various activities of the
business will be apt to pull in different directions according to your own
personal concerns and preferences. When this happens, the
messages received by staff, customers and suppliers will be different
and often conflicting.
gaining a better insight into how your business works and where it is
going (thus avoiding - often nasty - surprises)
being able to set clear targets for you staff, and evaluate progress
understanding more clearly your own concerns and goals and the
likelihood of their attainment
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The questionnaire is split into seven sections, which taken together
provide a framework for self-analysis in the business. The questions
themselves are 'triggers' that allow you to consider the relevant
underlying business issues.
Some questions require input from other key members of staff. This
approach helps to ensure that all of the key decision-makers, whether
yourself, or other managers or key members of staff, contribute their
views. Gathering information in this way will take effort and initiative
and you may find it helpful to share the task among members of the
Strategy Group. You may also find it useful to employ a small business
counsellor to assist you in the process of working through the
questionnaire. It can often be helpful to have a more 'neutral' view of
the business in undertaking this process.
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Section A: The Business and its Stakeholders
Question A1
Question A2
Who are the key managers, that is those making a fundamental contribution to
business?
Question A3
to create capital value within the business for future realisation (“wealth”)
Question A4
Review the response to Question A3. What are the implications for the business
and its future direction? (This question does, of course, require sensitive
handling, but don’t let that steer you away from completing this valuable part of
the overall exercise).
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Section B: The Business in Context
Question B1
How did the business arrive at its present form? Briefly document the main steps
in its evolution.
Question B2
Question B3
Which are the businesses core activities and which are peripheral ones? Use a
rough diagram, to show relationships between the various parts of the business.
Question B4
Question B5
Again, considering the diagram, what distinct customer groups are at present
being served by the business?
Question B6
From the perspective of each different group of customers, what is the business
really supplying in each of its activities?
It will be useful to debate this question within the Strategy Group, remembering
that “end-uses” can be intangible, and that many businesses, particularly those
in services, are often really selling such things as peace-of-mind, confidence,
and reassurance.
Question B7
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What is the “image” of the business? How do key managers believe the business
is perceived by:
existing customers?
potential customers?
suppliers?
competitors?
staff?
Question B8
Ask each key manager in turn, and debate the responses within the Strategy
Group.
Question B9
Who are the main suppliers, and what is the relationship of the business with
each one of them?
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Section C: The Business and its Resources
Question C1
The most important resource in any business is its people. What skills exist
among key managers within the business? Compile a “skills inventory”, using the
following headings as a guide, and adding other skills appropriate to your
particular business:
Question C2
How is the business organised? Who reports to whom about what? Do written
job descriptions exist? Are responsibilities both clearly defined and understood?
Use the following questions to help you draw up an organisational chart.
Question C3
Consider the responses to Questions C1 and C2. What overlaps and/or gaps
have become visible in the skills and responsibilities of managers? Debate the
effects of these in the Strategy Group. Do they result in a poor service to
customers or poor internal communications?
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Question C4
Does the business face constraints due to a lack of appropriately skilled staff? If
so, what skills are lacking?
Question C5
Who are the key members of non-managerial staff? Ask each one what single
change would make the business:
more efficient?
more competitive?
more successful?
more rewarding?
Question C6
Question C7
Do key managers feel confident about their understanding of the state of the
finances of the business?
Question C8
Question C9
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What are the resource constraints that confront the business? Summarise the
situation under the following headings:
Question C10
What procedures does the company need to introduce to encourage the most
efficient use of the resources of the business? (Examples in the human resource
field may include rewarding individual initiative and linking pay to performance).
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Section D: The Business and its Clients/Customers
Question D1
How can the market for the business products and services be described? Draw
a diagram using lines and boxes to show the relationship between the business
and its main customers, suppliers and competitors. You may find it useful to vary
the size of the boxes to indicate relative size and strength.
Question D2
What is the total size of the market for the business? What is your share of this
market? (You can define market size in terms of numbers of customers or
financial value or in any other way you find applicable).
Question D3
Does this market divide into distinct ‘market segments’? For example, can
customers be grouped easily according to:
age?
geography?
type?
background?
Question D4
For each market segment you have identified, what are the social and economic
factors that have led to its growth or decline over the past few years? Has a
particular group or individual been responsible for the growth experienced in the
business? What factors influence demand in each market segment at present?
Question D5
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Question D6
Identify any cyclical patterns in the workload of the business. What are the
causes of these cycles, for example:
seasonality of work?
fashion trends?
business/trade cycles?
dependence upon the performance of other sectors?
Question D7
During the past 12 months, which major new customers has the business won
and which existing customers has the business lost? List each new customer
and identify the source of the introduction. Then list any customers who departed
and seek out the reasons for this.
Question D8
How does the business go about marketing its services to potential customers?
List all existing market activities/efforts and note who is responsible for them.
What else could be done? Canvas opinion among key managers and consider
the responses within the Strategy Group.
Question D9
In what direction is the market likely to move over the next 5 years? Ask each
key manager to write down his/her view of possible future trends and how these
might effect the services currently offered by the business. What new services
will be needed? Summarise your findings and debate them within the Strategy
Group.
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Section E: The Business and its Competitors
Question E1
Who are the business’s main competitors in each of the market segments in
which it currently operates? In compiling your list, keep in mind the identified
end-uses of the services provided and what customers are really purchasing
(see Question B6).
Question E2
How do key managers perceive the competition? Ask each person to summarise
his/her impressions of two or three major competitors under the following
headings:
image
the size and geographical sphere of influence of the competitors, and the
implications of these factors in terms of their cost structures and flexibility
in meeting customer needs
range of services offered
apparent strengths, including any identifiable financial advantage
apparent weaknesses
likely future prospects
Summarise the responses to Question E1 and E2, and then discuss them within
the Strategy Group. In particular, try to identify your most successful current
competitors and the reasons for their success.
Questions E3
Which new competitors are likely to enter each market sector? Are there are any
significant barriers to entering a market sector (e.g. capital requirements,
availability of labour) that may discourage new competitors? Are businesses that
do not currently offer the services the company provides likely to become future
competitors through adopting a multidisciplinary approach?
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Question E4
Why do customers use your business’s products and services, rather than those
of its competitors? Ask each key manager to list their reasons taking the
following into account:
reputation
price
individuals in your firm
service levels
marketing efforts
location
role of personal recommendations
Question E5
Why is the business successful? Discuss the responses so far in this section
within the Strategy Group. What conclusions can you draw about your
competitive advantage? How can you build upon this advantage?
Question E6
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Section F: The Business and its Products
Question F1
What services does the business currently provide? List them (see Question B2).
Do these services differ from those offered by business competitors?
Question F2
Question F3
For services that could be further differentiated, would this allow the business to
charge a higher price than charged by your competitors?
Question F4
What is the present pricing policy? How are rates calculated? When were they
last reviewed? What features of the company’s services are customers
particularly happy to pay for? What do they particularly resent paying for?
Question F5
Question F6
Does the business have a good spread of services or are there ‘too many eggs
in one basket’?
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Questions F7
Bearing in mind any cyclical patterns identified in Question D6, does the overall
portfolio of services offered by the business allow for even workload patterns and
a steady cash flow?
Question F8
Question F9
How are potential opportunities for new services identified and thought through?
Question F10
Can you define your business’s ‘unique selling point’ (USP), that is those things
that makes it particularly attractive to the market place?
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Section G: The Business and its Employees
Question G1
Questions G2
What are the staff turnover figures for the business? How do these figures
compare with those of competitors? Is the situation in the business improving or
slipping? What are the costs of staff turnover to the business? Consider each
group of staff separately and try to identify some of the least obvious costs.
Question G3
What path for career advancement and personal development do staff see within
the business? Again look at each group of staff separately.
Question G4
What employee appraisal schemes does the business operate for different
groups of staff? How is above-average performance identified and rewarded?
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Question G5
different departments/disciplines
staff and line management
Question G6
Question G7
Question G8
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3.1 Reviewing the main objectives. You will now have a mass of
information about the current position of your business and where you
aim to be in the future. Before you begin to analyse the responses to
the Questionnaire, you will need to review the main objectives of the
business.
We suggest you set aside a full day away from the office for the
Strategy Group to begin the process of strategy formulation. During
this Strategy Day, you should aim at producing a set of agreed
business objectives, plus a single summarised set of responses to the
Questionnaire.
Internal
S W
O T
External
However, the following options open to you are likely to fall broadly into
one of the following categories:
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Expanding the business. For example, by taking existing services to
new customers or developing new services for existing customers.
3.5 Strategy into Action. When there is a clear view of what the business
strategy should be, it is essential that this is communicated to everyone
in the business. This is the first step in putting your strategy into action.
Much more is required. But, as we suggested earlier, that is another
chapter in the strategic management story.
However, to make immediate use of the strategy that you have devised,
it should be encapsulated in a formal business plan for the coming year.
This can be used to seek any outside finance you may need and also to
provide an internal yardstick for measuring progress towards achieving
objectives.
One suggestion for the contents of a suitable plan is set out below.
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3.6 Suggested Format for a Business Plan
3 Finance
3.1 Analysis of costs
3.2 Cash flow forecast
3.3 Projected profit and loss account for current/
next year’s trading
3.4 Break-even calculations
3.5 Summary of finance
If you see the plan as a route map for the immediate future, and as a working
document which provides a reminder of core objectives and actions, it will
become the stepping stone to the next stage of growth.
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" # $
1 Focus Stand back and take time out. Avoid the pitfalls of
addressing short-term administrative and operating
issues at the expense of ignoring the big questions in
your business
Strategic issues will remain hidden behind operational
problems, unless you and your key staff make a real
effort to air and debate them
6 Quality Start at the top with your own personal commitment and
that of your managers. Lead by example. Avoid
conflicting signals
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