strategy mapping ppt
TRANSCRIPT
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STRATEGY MAPPING
-By
Dileep M (31)Disha Kashyap (32)Divya Susan (33)Kenric D’Souza (34)Renita Ferreira (35)Firdaus Iqbal (36)
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People can’t manage what they can’t measure, and they can’t measure what they can’t describe.
The strategy map solves this problem by providing a framework for a simple, one-page representation of the cause-and-effect linkages among the objectives for both the outcomes and the drivers of the strategy.
Robert Kaplan and David Norton
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Strategy maps and Balance Scorecard
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A strategy map provides a visual framework for an organization’s strategy – how it intends to create value. Specifically, a good strategy map will link together:
1. The desired productivity and growth outcomes.2. The customer value proposition which will be needed.3. Outstanding performance in internal processes.4. The capabilities required from intangible assets.In effect, a strategy map captures the organization’s
strategy in visual form so that managers can better execute their desired strategy.
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• Conceptually, a strategy map links the high-level goals of the organization – its mission, values and vision – with meaningful and actionable steps each employee can take.
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Strategy Maps Strategic Maps are the foundation of the Balanced Scorecard. You will need 1 strategic map for each strategic theme. Maps are constructed over 4 perspectives. Strategic objectives are mapped over the four perspectives, linked together.
• Linking Strategic objectives need to be placed in the Strategic Map according to which
perspective fits with the objective. Objectives may cross over more than one perspective. We usually start at the top with outcomes and work our way down, looking at
what enables (drives) the outcome.• Approval
From executive management. Does this map accurately tell the “story” of our strategy?
If disagrees, go back and redo the maps. We need to get this step right since it represents the foundation for the entire scorecard.
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• Measurements For each strategic objective, you need one measurement. Provides us with feedback on meeting the strategic objective. Most organizations will use many of their existing measurements. Organizations requiring major change should include driver type measurements
• Targets Set a target for each measurement. Push the organization to a required level of performance. Put focus on the strategy, expressing the specifics of the strategy. When targets are hit, then has successfully implemented its strategy.
• Initiatives In order for things to happen in an organization, you must initiate major projects
or programs. For example, improving customer service may require a new customer management system.
Once you launch appropriate initiatives, you should be able to meet your strategic objectives. This closes the loop, everything is now linked and away we go!
Linking Strategy Maps with Balance Scorecard
Step 1: Establish and define what the current value gap is for shareholders
Step 2: Reconcile your current value propositionStep 3: Establish your projected time lineStep 4: Identify your key strategic themesStep 5: Identify and align your intangible assetsStep 6: Specify and fund the strategic initiatives
required to execute the strategy
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Principles behind Strategy Maps
MAIN PRINCIPLES
1. Strategy balances contradictory forces
2. Strategy is based on a differentiated customer value proposition
3. Value is created through internal business processes
4. Strategy consists of simultaneous, complementary themes
5. Strategic alignment determines the value of intangible assets
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Strategy Map Creation
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• It is still the ultimate objective for profit maximizing companies
• Shareholders value can be increased by 2 ways– Selling more– Spending less
Financial Perspective
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Revenue growth strategies
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ProductivityImprovements
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Customer Perspective
Customer Satisfaction
Customer Retention
Customer as sales person
Acquisition of new customers
Increase In Business
Increase in market share
Increase in Shareholder
value
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Value proposition for customers (1/4)
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Value proposition for customers (2/4)
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Value proposition for customers (3/4)
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Value proposition for customers (4/4)
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Internal Perspective
Operations Management
Processes ◆Acquire raw materials from
suppliers, ◆Convert raw materials to
finished goods, ◆Distribute finished goods to
customers, and ◆Manage risk.
Operating processes for service companies produceand deliver the services customers use.
Customer Management Processes
Customer management processes expand and deepenrelationships with targeted customers.
◆ Select targeted customers, ◆ Acquire the targeted customers, ◆ Retain customers, and ◆ Grow business with customers.
Innovation Processes ◆ Identify opportunities for new products and
services, ◆ Manage the research and development
portfolio, ◆ Design and develop the new products and
services, Regulatory and Social Process
◆Environment, ◆Health and safety, ◆Employment practices,
and ◆Community
investment.
Internal Perspective
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Learning and Growth
• The fourth perspective, learning and growth, describes the organization’s intangible assets and their role in strategy.
• Divided into 3 categories– Human capital: The availability of skills, talent, and know-
how required to support the strategy.– Information capital: The availability of information systems,
networks, and infrastructure required to support the strategy.– Organization capital: The ability of the organization to
mobilize and sustain the process of change required to execute the strategy.
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Examples
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Increase ROCE to 12%
Revenue Growth Strategy Productivity Strategy
New Sources of Non-Gasoline Revenue
Increase Customer Profitability Through
Premium Brands
Become Industry Cost Leader
Maximize Use of Existing Assets
ROCENet Margin (vs. industry)
Non-Gasoline Revenue & Margin
Volume vs. Industry Premium Ratio
Cash Expense (cpg) vs. Industry
Cash Flow
Speedy Purchase
Clean Safe Quality Product Trusted Brand
Friendly Helpful Employees
Financial Perspective
Customer Perspective
Help Develop Business
Skills
More Consumer Products
Recognize Loyalty
Share of Targeted Segment
Mystery Shopper Score
Dealer Profit Growth
Dealer Satisfaction
Differentiators
“Delight the Consumer” “Win-Win Dealer Relations”
Basic
Create Non-Gasoline
Products & Services
“Build the Franchise” “Increase Customer Value” “Achieve Operational Excellence” “Be a Good Neighbor”
Improve Environmental,
Health and Safety
Understand Consumer
Segments
Best-In-Class Franchise
Teams
Improve Hardware
Performance
Improve Inventory
Management
On-SpecOn-Time
Industry Cost Leader
New Product Acceptance Rate Environment
Incidents Safety Incidents Dealer Quality
Rating
Yield Gap Unplanned
Downtime
Inventory Levels
Run-Out Rate
Activity Cost vs. Competition
Internal Perspective
A Motivated and Prepared Workforce
• Aligned• Personal Growth
Climate for Action
• Functional Excellence• Leadership Skills• Integrated View
Competencies
• Process Improvement
Technology
Personal BSC Employee Feedback
Strategic Skill Coverage Ratio
Systems Milestones
Learning & Growth Perspective
Mobil NAM&R Strategy Map
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The Datex-Ohmeda Strategy Map
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