Quarter 5: Making Plans

for the Future

Copyrighted in its entirety, Innovative Learning

Solutions, 2016
27 September

What is New in Q5?

5,000,000 in additional funding

Ability to invest in R&D for new brand features

Corporate Headquarters is
Willing to Invest Another $5,000,000
Demand is up for the entire industry.
Your firm has established itself as a viable competitor.

New sales offices would greatly expand distribution, drive

up unit volume, and thereby reduce unit costs.
New brand features could be brought on the market if you
invest in R&D. These brand features will increase
customer satisfaction, and thereby demand.

Executive Board Wants a Plan

A Strategy is a Plan of Action

A strategy is a series of
interconnected tactics
purposely organized to be
executed in a particular
order in time and space for
the purpose of achieving
specific strategic goals.

The Best-planned Strategies Will

Not Survive the Test of Battle
- Gen. George Patton

Plans Are Worthless,

But Planning is Everything
- Gen. Dwight D. Eisenhower

The Devil is in the Details

- Adm. Rickover

It is Better to Have a Class A Team

with a Class B Plan than to have a
Class B Team with a Class A Plan
- Almost any senior executive

Headquarters Wants a Plan

History of firm // Market assessment // Performance to date
Marketing strategy // Financial strategy
Pro forma income statements
What is in it for the company?

Market Assessment

Nature of business opportunity

Market potential
Competition

Firms Performance After 1 Year

Market position

Segments
Geography
Competition
Market performance
Demand and market share
Customer satisfaction (brands,
prices)
Financial performance

Cash
Profitability

Marketing Strategy
Target markets
Distribution
Geographic market
expansion
Timing and order of new
markets

Sales force staffing

Number by quarter
Percent allocation by segment and service

Advertising (timed to match new offices, brands)

Themes/messages
Frequency (volume) by region
Emphasis on regional versus local

Marketing Strategy
Brand strategy
(portfolio management)
- selection of R&D features
target segment
cost and timing of
availability
- introduction of new brands
target segment
timing
- price strategy
margins by brand by target market
new versus established brands

Financial Strategy
Cash flow requirements
Amount to be invested
by quarter in R&D
Amount to be invested by
quarter in new sales offices

Profitability
Projections of profits by quarter
Return on investment by end of second year

Sources of money
Corporate Headquarters
Profits

Oops Factor in Strategic Planning

Develop a
tactical plan

Check cash
flow

Oops!
Revise
tactical plan

Check cash
flow

What is in it for Corporate HQ?

How will its money be spent?

How much will it earn and when will it earn it?

Procedure for Presentation to

Headquarters Executive Board
Each team is given 15 minutes to present its marketing
plan to the Executive Board.
Executive Board will take 15 minutes to ask questions
about the divisions performance to date, assessment
of the current situation, and strategy for the future.
The executive team can not proceed until the plan has
been approved by the Executive Board.

Learning Points for Quarters 6-8

Strategic and tactical planning
Time phase tactics into the future
Work investment money to support tactical plans

Understanding cash flows

Cash is king
How is profit different from cash?

Learning Points for Quarters 6-8

Management of Strategy
Discover the causes of performance shortfalls
Adapt to new opportunities and problems
Work on the margin to improve performance
where should money be spent next?
how can we get more out of our current investments?

Manage the future (taking the initiative now by

expending resources that will shape the events and
opportunities of the future)

Learning Points for Quarters 6-8

Management of Strategy (contd)
Discover and exploit the
markets many response
functions.
Learn from smart competitors
decisions.

You can not go to Hawaii on

market share (at the end of
the day, wealth creation is the
goal)