Confidential

Strategic Business Plan New Business Areas

Process Guidelines and Formats

Company X Limited

SBP Contents (I)

TOPICS I. BUSINESS CASE DESCRIPTION II. MARKET ASSESSMENT III. STRATEGY DEVELOPMENT IV. OPERATIONALIZING PLAN V. TARGET SETTING VI. STRATEGY DEPLOYMENT

I. BUSINESS CASE DESCRIPTION

Business Case Description

Short description which describes your business opportunity How and why has the opportunity been identified and is it a strategic fit? What will the opportunity size be in 5 years time and what are the expected returns? Which countries will we be targeting?

II. MARKET ASSESSMENT

Market Shape and Size Players/ Competition Customers Vendors Technology/ Regulations

Market Shape

Describe the opportunity and how is it segmented e.g. Oil & Gas Upstream, Midstream, Downstream What are the sub-segments in these and our current capability to tap these? What is the plan to increase addressability please provide a stepped chart to show what additional capabilities we are adding each year to increase the width of our offering in the market. What will be our market addressability in percentage terms as per the plan? What are the entry barriers in the market?

Market Size

Market Size Segment wise/ country wise (provide 5 year trend) How are you calculating these estimates? State your approach/ assumptions/ sources, explicitly. Addressable market for Company X (provide 5 year trend to show how it is increasing inline with the stepped chart detailing increased width of offering) Which additional end-use segments/ geographies can this opportunity be expanded to in future. State approximate size of additional opportunity, if possible What are the critical success factors in the market and how different are these from our existing markets?

Players/ Competition

Who are the existing players in the markets? Are they the same as our existing competitors? What is the market share of existing players give a 5 year trend with expected share for next 3 years What is the profitability of existing players in the target segments? Do they have any partnerships or tie-ups? Who are the likely entrants in the market in near future and how will they impact? How do you think competitors will respond to our entry? Evidences as to why players have been successful or unsuccessful in the market.

Customers

Who are the main customers in the markets? Are they the same as our existing customers? What is the share of these customers in the overall market market concentration? How is the financial health of main customers? Do they have any partnerships? Are there any influencers in the buying decision? If yes, name the key influencers and our relationship with them. How do you think customers will respond to our entry? Are there any unfulfilled customer expectations? How have we identified them?

Vendors/ Suppliers

Are there any vendors/ suppliers who are key to success in the market? Are vendors/ suppliers available in the market? Are there any products for which we would need partnership with a vendor/ supplier?

Technology/Regulations

Are there any regulatory requirements like company incorporation, visa restrictions, environmental restriction, labour laws etc which we need to be factored in?

III. STRATEGY DEVELOPMENT

Leveraging existing Core Competencies Segmentation, Target & Positioning (where to compete) Value Proposition & Go-to-Market (why buy me) Additional Information Strategy Map

Leveraging existing Core Competencies

Are we leveraging our existing core competencies to target this opportunity? If yes, how?

Which additional core competencies we would need to develop to succeed in this new business?

Market Segmentation, Target and Positioning (where to play ?)

Business Boundaries In which market sub-segment, geography, order size, customer group will we compete and why? In which part of the value chain will we play and why? How different is it from our existing operations? What products and services will we offer and how are these different from our existing offerings? Which channels will we use and how different are these from our existing channels?

Customer Value Proposition (How to win?)

OPERATIONAL EFFICIENCY Industry Hygiene Proposed Val. Proposition

Industry expected Hygiene level

PRODUCT SUPERIORITY

CUSTOMER INTIMACY

What is our proposed customer value proposition and how different is this from our existing value proposition? How have we gathered this input?

Additional Information

What marketing challenges do you envisage for making the market for this offering? Any brand strategy requirements?

What will be our pricing policy and how would it compare with the competition? What information do we have about the pricing policy of competitors?

Do you expect cannibalization of any existing product/ service lines with this new product/ service?

PERSPECTIVE

LEARNING & GROWTH

INTERNAL PROCESS

CUSTOMER

FINANCIAL

Strategy Map

IV. OPERATIONALIZING PLAN

Organization Structure & Leadership Offsetting Entry Barriers Resource Requirements

Organization / Business Structure & Leadership

Describe the intended position of the new business in the divisions organization structure part of existing Lines of Businesses (LOB), new LOB, JV, separate company Describe the organizational structure of the new business i.e. how will the new business be structured to execute its strategy and what resources would it draw from existing businesses, if any? Are the key people (nucleus) needed to launch and stabilize the opportunity on board/ identified?

Offsetting Entry Barriers

Do we have key technologies/ pre-qualifications required to exploit the opportunity? If not, how do we bridge the gap? Do we need any manufacturing? If yes, size, layout, capacity, location, scalability. If partnership is being proposed, probable role of partner Project Execution, After-Sales Service, Sales/ Marketing, Brand, Product Technology & Manufacturing, Research & development Ownership & decision making matrix Each partners role on - management structure, capital allocation, etc. If partnership is being proposed, names and details of the proposed partners Background details : Age of company, Number of employees, Annual sales figures, Product Range, Location of facilities, key personnel (owners, senior managers) Form of ownership SWOT of the proposed partner Scope of Alliance (Regions/ verticals/ customers groups/ sectors) If multiple partners are under evaluation, please provide details for all the alternatives and your ranking of these alternatives Availability of skilled manpower in case of visa restrictions, how do we offset the human-resource requirement?

Resources Required : Manpower plan 2010-11 (I)

Junior Management

Middle Management

Senior Management

Comments*

Existing Nos. Additional Requirements Q1

Q2

Q3

Q4 This capacity plan should be backed up with a detailed capability plan which can be included in the Back-up
21

Resources Required : Manpower plan for the balance period 11-12 to 14-15 (II)

Junior Management

Middle Management

Senior Management

Comments*

Existing Nos. Additional Requirements 2011-12

2012-13 2013-14

2014-15

This capacity plan should be backed up with a detailed capability plan which can be included in the Back-up
22

Resources Required : Infrastructure plan (III)

1. IT 2. Sales and distribution 3. Manufacturing (If applicable) 4. R&D/Technology (If applicable) 5. Post sales/ customer support 6. Space

23

Resources Required : Investments including Capital Expenditure (IV)

1. Any specific investment required in the plan period

24

Resources Required : Areas of Corporate Intervention/ Support (V)

1. Meeting customers under Key Account Management 2. Relationship with Group Companies 3. Mergers & Acquisitions (inorganic growth) 4. Recruitment of Talent at senior positions 5. Best practice sharing with Groups / Business Units / Clusters/projects

25

V. TARGET SETTING
Expected Financials Return On Investment Company X vs Major Competitors Assumptions and Triggers Balance Scorecard for the new business

Expected Financials and the Break Up

Year Order booking (wherever applicable) TO GM DC Investment Fixed Working Capital

2010-11

2011-12

2012-13

2013-14

2014-15

Financials to be reported separately in case coming from different geographies

Return On Investment

What is ROI of the opportunity IRR, Payback Period? How does it compare with the IRR of industry and IRR of other businesses in the division? Sensitivity Analysis

Company X vs major Competitors

Make projections for Division as well as its major competitors for the next five years.

Key Assumptions, Triggers

1. Make business and external assumptions* explicit and track them to sense when the market may be veering away from expectations, requiring a re-prioritisation of strategic initiatives
i.

Explicitly list down the business and external environment assumptions taken into consideration while formulating the Strategy Plan Also mention the risks to these assumptions and the triggers (factors) which would indicate that the underlying assumption were /have gone wrong. (the triggers would help in having a issue based Strategic plan review instead of only time based) Mitigation plan for the same

ii.

iii.

* These could pertain to investments, sectoral growth, people resources, competition, macro-economic change etc.

30

BSC 2010-11 (Projected till 2014-15)

1. BSC of the new business with Strategic Objectives (both ST and LT), Performance Measures, Targets for these measures (with quarterly/monthly phasing) and Strategic Initiatives 2. Include initiatives/objectives related to matters such as climate change, safety, innovation, customer culture/engagement under process/learning/customer perspective of the BSC. There should be adequate weightage in the BSC on these matters 3. BSC needs to be projected till 2014-15, so that the visibility of initiatives leading to objectives is there. Financial projections will be backed up by initiatives for Internal Processes, Customer and Learning & Growth.

VI. STRATEGY DEPLOYMENT

Action Plan Review Mechanism

Action Plan

Action plan for launching & stabilizing the opportunity with milestones. Map the detailed operationalizing plan. List down key trackable milestones.

Action Code

What

Why Start Date

When End Date

Whom Lead Responsibility Team Members

Review Mechanism

Mention the divisions review mechanism to track performance on the milestones.

VII. BACK-UP SLIDES

THANK YOU