ABC Manufacturing Company

Strategic Plan 2011 – 2015

Facilitated by Richard Wolf, CPA August 8, 2011

ABC Manufacturing Company Strategic Plan – 2011-2015

Introduction ABC Manufacturing Company (“ABC” or the “Company”) was interested in preparing a strategic plan to explore and analyze the opportunities and threats facing ABC, both internal and external, that contribute to or impede the development of a vision and strategy for the future. This strategic plan is intended to serve as a guiding framework to grow and enhance the Company and provide a five year roadmap that focuses the management team’s time and energy for achieving the Company’s goals. The strategic plan was developed with broad involvement and guidance from various members of the management team. The strategic planning session consisted of approximately 15 participants who met for one eight-hour planning session. The goal of this session was to develop the “Top 6 Strategies” and to begin prioritization. The action planning was to be done by the Company’s management team in the weeks following the strategic planning session. The strategic planning process was tailored upon discussion with the senior management team and was designed to build on the accomplishments of the past seventy years and on the continuing strength of the Company. Richard Wolf facilitated the strategic planning process using the Insights to Action (i2a) Strategic Thinking System. The i2a system is based on the five qualities of extraordinary leaders: Sight, Insight, Create, Communicate and Inspire. Steps in the i2a process included:

Developing a shared history of ABC Manufacturing Company

Exploring the Company’s future direction based on our strength, challenge, opportunity, threat (SCOT) analysis

Identifying key strategic initiatives and drafting a vision statement that reflects these strategies

Creating priorities for the management team as they develop the strategic action plan This report summarizes the strategic planning process and organizational priorities for ABC Manufacturing Company. This report is a living document that will help guide the future work of the Company. This report will be referred to and adjusted as strategies are undertaken, as well as when changes occur that impact those strategies.

Executive Summary The Company’s management team identified the following strategic focus areas as part of the strategic planning process:

Co-Pack Growth

Corporate Branding

Enhanced Communication

Chain Account Growth

Standardized Business Processes

Professional Development

ABC Manufacturing Company Strategic Plan – 2011-2015

Each strategic initiative will be discussed in greater detail within this strategic planning report, as well as the process utilized to reach these initiatives.

i2a Strategic Planning Process For the strategic planning process, we utilized selected modules from the i2a process. The modules included: Our History, SCOT Analysis, 360° World View, Bold Future and Creating Priorities.

Our History The purpose of the “Our History” module is to create a base starting point for the strategic planning discussion. Since some of the members of ABC’s management team are relatively new to the company, it was important to discuss what could be learned from past mistakes and past successes. This shared history was also critical for ensuring that we preserved what is most important about where the Company came from. Shared History

[REMOVED FROM DOCUMENT] Our History – Takeaways Some important takeaways from this exercise were:

The Company has a long history dating back to 1940

Proud to be a third generation company

Retail expansion in the 1940s as the Company went National

In the 1950s the Company moved to food service

West Coast site was added in 1997

In 2008 moved into a state of the art facility which expands ability to co-pack

ABC Manufacturing Company Strategic Plan – 2011-2015

Our History chart

SCOT Analysis The next module in the i2a process was the SCOT Analysis. A SCOT Analysis (also referred to as a SWOT analysis) examines an organization’s Strengths, Challenges, Opportunities, and Threats and is a mainstay of business analysis. It focuses on the issues of today from both an internal (as in “we the organization”) and an external (as in “the larger environment”) perspective. The identified strengths included:

Quality

Brand recognition

Bi-Coastal

State of the art facility

Customer service

Distribution channels

Strong financials

Dedicated employees

The identified challenges included:

Need to change image

Lack of mature processes

Pricing and Margins

Retail distribution

High turnover

Produce expertise The identified opportunities included:

Sales growth through co-pack opportunities

Chain accounts

Cash & carry business

Ability to capitalize on changing image

Value line

IQF Customers

Safety certifications

RDC

NPD

Increase retail sales

SAMPLE

ABC Manufacturing Company Strategic Plan – 2011-2015

Finally, the identified threats included:

Economy

Brand erosion

Competition

Shrinking margins

Customer retention

Distributor consolidation SCOT Analysis – Takeaways The final step in the SCOT Analysis is to select the “high-leverage” opportunities via a vote of the management team. Of the original list of opportunities, the following “high-leverage” opportunities were identified:

Co-pack opportunities

Chain accounts

Cash & Carry

NPD

Ability to capitalize on changing image

SCOT Analysis chart

360° World View The purpose of the 360° World View module is to look, as best we can, to the future. From this view of the future, we seek to create solutions that will be relevant and meaningful. We look to things in our environment that are outside of our immediate context. We tried to focus on what is worth “watching” and how it might impact the Company in the future.

ABC Manufacturing Company Strategic Plan – 2011-2015

As part of this module, we examined the following six categories to help frame our discussion:

Globalization (Anything happening at a more “macro” level)

Economics (Economic conditions impacting the Company)

Workforce (What’s likely to change about the people the Company hires?)

Industry Trends (What’s happening within the industry?)

Technology Trends (What’s happening technologically that’s likely to impact the Company?)

Consumer/Customer Trends (How are our customers changing?) 360° World View – Takeaways Some important takeaways from the 360° World View module were:

Fewer small distributors

Sales opportunities through the web

Pricing

Packaging

Move towards healthier foods

Slow growth and stronger competition due to acquisitions in the industry

Export potential

Ethnic markets and more diverse flavors

360° World View chart

ABC Manufacturing Company Strategic Plan – 2011-2015

Bold Future The next module in the i2a process is creating our Bold Future. This module focuses on three questions:

What do we want to create?

How do we want to create this future?

What are our next steps? The end result from this module is to name and define our strategic initiatives and to then identify our top strategies for our strategic plan. Vision Statement The initial step of the Bold Future module was for the group to imagine what the Company would look like five years in the future. From the discussions that followed, the management team came up with the following “story” of ABC Manufacturing Company in 2015:

ABC Manufacturing Company will be successful and a recognized co-pack retailer of choice. The Company will have experienced increased sales and introduced numerous new products. The Company will have better communication and are more cohesive process. ABC will have brought in new chain accounts and seen an increase in retail growth which resulted in continued expansion.

This “story” is frequently referred to as a Vision Statement. A vision statement describes a company in the somewhat distant future. While a vision statement and mission statement may seem similar in nature, there is a difference in the two statements. A mission statement is typically more concerned with the overall aim of the company, a statement on the company’s reason for being. A vision statement, by contrast, is not about what the company currently is, but what the company hopes to become. Our vision statement focused on a few key ideas that the management team saw popping up throughout the strategic planning session.

ABC Manufacturing Company Strategic Plan – 2011-2015

Bold Future chart – 5 Years Out

Once we determined our future goals, the next step in the Bold Future module was to brainstorm on how to achieve those goals. The Committee was asked to develop ideas for the next year that would allow us to accomplish the future we had created. Bold Future – The Upcoming Year – Takeaways The takeaways when developing our plan for the upcoming year were:

Become recognized copacker retailer of choice

Increased brand recognition

Regain market share

Focused marketing efforts

Training of sales force on various product lines

Interdepartmental education

Better communication

Increased synergy between East Coast and West Coast operations

Retail growth of approximately 10-15%

ABC Manufacturing Company Strategic Plan – 2011-2015

Greater diversity in product mix

Create new products that stimulate excitement

Land new chain accounts

Departmental accountability

Improve processes to create efficiency

Bold Future chart – One Year Out

ABC Manufacturing Company Strategic Plan – 2011-2015

The final step in the Bold Future module is to group these ideas into strategic focus areas. These strategic focus areas would become the Top Strategies in our strategic plan. The management team examined the various ideas and consolidated them into the following Top 6 Strategic Focus Areas:

Co-Pack Growth

Corporate Branding

Enhanced Communication

Chain Account Growth

Standardized Business Processes

Professional Development

Creating Priorities The final module in the i2a process is Creating Priorities. In this module, the management team began to brainstorm on some specific action items and then categorized them into three different groups based on their prioritization. The three different groups are:

Critical – High likelihood of impacting our future success and the timing to address is NOW

Essential – May impact our future success and the timing to address is FLEXIBLE

Significant – Not likely to DIRECTLY impact our future success but addressing may bolster Critical and Essential efforts

Creating Priorities – Key Takeaways The key takeaway from this module was the identification of some specific action plans and then the categorization as Critical, Essential or Significant. The critical items identified were:

Seek targeted opportunities for co-packing

More cross marketing

Better definition of roles & responsibilities

Dedicated staff with prospecting plan for national accounts

Ongoing product training and creation of training tools

The essential items identified were:

Update the website to enhance the co-pack area

Focus on current brands and give incentives to switch and grow

Information flow chart

Creation of an intranet to enhance communication

Create an internal ABC Manufacturing Company University to provide better training on product lines and also inform all employees on various jobs within the Company

ABC Manufacturing Company Strategic Plan – 2011-2015

Finally, the significant items identified were:

Alliance with current co-packers for referrals

Develop and document specific procedures for each job within the Company

Video conferencing between East Coast and West Coast operations

Hire co-pack focused salesperson

Develop one message that is easily understood and can be communicated to all customers

Increase incentives for chain accounts

Minimum of quarterly meeting for all employees to inform them of current events within ABC Manufacturing Company

Creating Priorities chart

ABC Manufacturing Company Strategic Plan – 2011-2015

Next Steps The next step for ABC Manufacturing Company was to assign a “champion” for each of the six strategic initiatives identified during the strategic planning session. Once a champion was identified, it was their responsibility to communicate the results of the strategic planning session to their task force and then to develop an action plan detailing specific action items for each of the strategic initiatives. It was also important that the Critical ideas from the Creating Priorities module get incorporated into the action plans. Finally, each task force would be responsible for communicating their action plan to the entire management team and then tracking the implementation and success of their strategic initiative.