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Strategy: A way of defining paths of what-if-scenario’s to defeat your competitors by using a combination of a rational determined Unique Selling Point (“USP”) and a Healthy Dose of Luck. Your end-goal is your Vision. Without a clear planning & process overview (Strategy) to aim for your Vision, your actions & execution will just be like hail relying on Luck: going everywhere and nowhere, hoping to hit a target. This presentation discusses several Strategy Analysis Methods to define your current position and your way forward. See also Audio & 42-page Notes supporting this presentation. VIP members get Discount!! Author: Eva Hukshorn, EFactor
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Strategy A vision for the future, a strategy for ge2ng there Author: Eva Hukshorn
1
EFactor: An introduc9on
• Founders Adrie Reinders, Marion Freijsen, Roeland Reinders • Started OHM Inc. in 2004: Business Development for Fortune 2000 • Serving (mainly) technology companies around the globe • Goal: assist emerging technology companies in selling their product to Corporates • In 2007 they wrote a book: The N-‐Factor
- How efficient networking can change the dynamics of your business - Huge success: no theory, but hands-‐on 9ps & tricks
• Result: EFactor -‐ a social plaUorm for entrepreneurs - Strategic business networking impacts the future of your business - Goal: share knowledge, increase sales, decrease costs, find capital - Mission: increase success of entrepreneurs to start-‐up or accelerate their organiza9on
- In 2012 the new book was launched: The E-‐Factor: Entrepreneurship in the Social Media Age
2
EFACTOR, THE WORLD’S LARGEST ONLINE NETWORK FOR ENTREPRENEURS ON EARTH
An online community offering you a network, knowledge, events, and every business resources you need to
succeed
Eva Hukshorn: An introduc9on
• Work Experience - Current: Partner EFactor
Board of Advisory: TreFoil Energy / CleanDrinks / Global Thinkers / ShowLinq
Coach Startup: Bootcamp Amsterdam / New Venture McKinsey - 2009 – 2010: Dutch Bou9que – Marktlink Mergers & Acquisi9ons, Amsterdam - 2007 – 2009: Royal Bank of Scotland – Corporate Finance, Amsterdam - 2004 – 2009: ABN AMRO – Corporate Finance New York, Amsterdam - 2003 – 2004: Accenture – Consul9ng London, Amsterdam
• EducaHon - 1997 – 2002: MSc Economics, Finance – University of Groningen, the Netherlands - 2003: Interna9onal & Asian Studies – Na9onal Sun Yat-‐Sen University, Taiwan - 2009 – 2011: Cer9fied Management Accoun9ng (CMA) – Ins9tute of Management Accountants
(IMA), United States - 2009 – 2001: Colloquium General & Modern Art – Academy for History of Art, the Netherlands - 2012: Interna9onal Financial Report Standards (DipIFRS) – Associa9on of Chartered Cer9fied
Accountants (ACCA), United States
3
FUNDING TUESDAY, EVERY TUESDAY
So what can you expect from us each Funding Tuesday?
1. Webinars on EFactor on Finance & Funding related topics in the EVENT Sec9on
2. Blogs & interviews with informal investors and funded entrepreneurs with 9ps & tricks in the BLOGS sec9on under NOW
4
3. Finance & Funding related ar9cles on NOW feed
4. In the Finance & Funding GROUP on our website you will find Q&As of the webinars under NETWORK
5. In the KNOWLEDGE base you will find more and more presenta9ons on Finance & Funding related topics, including the webinar presenta9ons
6. And if you become a VIP MEMBER you will personally be supported on your Finance & Funding related ques9ons
Webinar Program Overview 2012
June 19: Business Plan Wri9ng -‐ A Roadmap to Success July 3: Pitching & Presenta9on -‐ 3 Minutes, 1 Impression July 17: Strategy -‐ A Vision for the Future, A Strategy for GeWng There July 31: Budge9ng & Forecas9ng -‐ Predic9ng the Outcome Aug 14: Working Capital -‐ An Unknown Key to Success Aug. 28: Capital Management -‐ Playing with Risk Sept 11.: Funding & Investments -‐ Some Sources are More Equal then Others Sept. 25: Valua9on -‐ Art or Science Oct 9: Exit Strategy -‐ Nice to Have or Need to Have? Oct. 23: Bootstrapping -‐ An Alterna9ve Answer to Funding Nov 6: Crowdfunding -‐ The Power of Friends, Family and Fools Nov. 20: Networking -‐ Nice You have 3000 Friends, I have 30 Relevant Connec9ons Dec. 4: Marke9ng & (Social) Media -‐ Noise or Value? Dec. 11: No Sales, No Glory Dec. 18: Most Common Mistakes of Entrepreneurs 5
Some basic ingredients to start a successful company
6 3 key elements of life: Ideas, People and Money
The importance of defining your strategy & vision
7
• Accomplish your dream: • Intellect • Luck
• Communicate your dream: • Understanding • Mo9va9on • Deal-‐making
• Define & quanHfy: • 5 year goal = vision • 3-‐5 milestones • 18 month-‐by-‐month detailed to-‐do
A vision for the future
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• IdenHfy & understand: • Developments of your organiza9on • Developments of your environment • Industry developments • Interac9on on these developments
• Your vision includes: 1. Compe99ve edge 2. Environment & industry 3. Customers & partners 4. Targets 5. Core values 6. Image 7. Milestones
A strategy for ge2ng there
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STRATEGY = HOW • Measurable & reachable • Forecasts vs. actual steps • Sub-‐visions • Milestones & sub-‐milestones • Timelines
Vision is your DREAM, strategy is HOW to dream
Vision Corporate
Corporate strategy & milestones
Sub-‐Vision Marke9ng
Sub strategy & milestones
Sub-‐Vision Financials
Sub strategy & milestones
Sub-‐Vision Product
Sub strategy & milestones
A summary of your vision and strategy: Your milestone overview
10
2012 2013 2014 2015 2016
Business Plan
Product development
Prod. A
Beta test
Product development
Going to market US
Alpha Customers
Get work space
Product development
Prod. B
Beta test
Going to market
Expand in EU + India
Break-even
Promotion campaign
Employees 3 5 8 10 12 15 20 25
Promotion campaign
Capital need: USD 150k 2nd round: USD 1mio 3rd round: USD 3mio
M M V
Revenue / margin 200k / 10% 1mio / 17.3% 4mio / 21% 12mio / 28%
SWOT analysis: Know thyself
11
• Poli9cal • Legal • Economic condi9on market • Expecta9ons of stake & shareholders • Technology • Public expecta9ons • Compe99ve environment • Barriers to entry • Commodity prices • Amount of customers • Structure of suppliers
INTERNAL: Strength & Weaknesses
• Resources: financial, intellectual • Customer service • Efficiency • Compe99ve advantages • Infrastructure • Quality & price • Delivery 9me • Costs • Capacity • Personnel / management • Organiza9onal structure
EXTERNAL: OpportuniHes & Threats
Value Chain Analysis
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INBOUND LOGISTICS
OPERATIONS OUTBOUND LOGISTICS
MARKETING & SALES
SERVICE & MAINTANCE
Technology: Product development, process design, engineering, R&D
Procurement: Funding, contrac9ng, supplier management, working capital
Human Resources: Recruitment, training, personnel, planning
AdministraHve: Accoun9ng, legal, finance, tax
Value Added plus Cost ReducHon = Increased Profit Margin
• Supply schedules
• Controls • Receiving & storage
• Manufacture • Assemblage • Packaging • Produc9on control
• Finished goods
• Order handling
• Delivery • Invoicing
• Product • Price • Promo9on • Place
• Maintenance • Warranty • Educa9on & training
• Upgrades
Source: Wikipedia
Generic Compe99ve Strategy Analysis
13
TARGET GROUP COMPETITIVE ADVANTAGE
LOW COST COMPETITIVE EDGE
BROAD COST LEADERSHIP DIFFERENTIATION
NARROW FOCUS – LOW COST
FOCUS – DIFFERENTIATION
STUCK IN THE MIDDLE
Five Forces shaping industry compe99on
14
RIVALRY EXISTING
COMPETITORS
Five Forces Analysis: New entrants
15
RIVALRY EXISTING
COMPETITORS
Threat new entrants = low: • Barriers to entry high & barriers to exit low • Time needed to setup
• Capital needed to setup • Strong brand name exis9ng compe9tors
• Protec9on of technologies • Economies of scale
• High switching & sunk costs • Access to distribu9on is difficult
• Brand loyal customers
• High absolute cost and low margins
• Specialist knowledge needed
Five Forces Analysis: Customers
16
RIVALRY EXISTING
COMPETITORS
Bargaining power customers = low: • Many customers, few suppliers
• Compe99on between customers is high
• Size of each order is small
• Differences between compe9tors
• Price sensi9vity low • Ability to subs9tute is low • Cost of changing is high • Dependence on exis9ng distribu9on channels • Informa9on availability is low
• Availability of customers to backward integrate
is low
Five Forces Analysis: Subs9tute products
17
RIVALRY EXISTING
COMPETITORS
Threat subsHtute products = low • Price subs9tutes are higher • Price / quality performance of subs9tute poor
• Switching costs involved • Strong differen9a9on between compe9tors
• Few subs9tutes available • Products are easy to understand
Five Forces Analysis: Suppliers
18
RIVALRY EXISTING
COMPETITORS
Bargaining power suppliers = low: • Many suppliers
• Low switching costs • Low differen9a9on of inputs • Presence of subs9tute products • Low reliance on suppliers’ distribu9on channel • Hard to ver9cally integrate and cut out buyer • Employees are flexible
Five Forces Analysis: Industry rivalry
19
RIVALRY EXISTING
COMPETITORS
Rivalry exisHng compeHtors = low: • Your unique • Diversity among compe9tors
• You deliver beqer quality • You deliver beqer price • High switching costs • Loyal customers
• Low barriers to exit • No access capacity in the market
• Low adver9sing & innova9on costs • Low compe99on between on-‐ and offline
compe9tors
Combine Porter’s analysis
20 Source: h7p://finntrack.co.uk
FIVE FORCES GENERIC COMPETITIVE STRATEGIES
Cost Leadership DifferenHaHon Focus
New Entrants Ability to cut price in retalia9on deters poten9al entrants
Customer loyalty can discourage poten9al entrants
Focusing develops core competencies that can act as an entry barrier
Bargaining Power Customers
Ability to offer lower price to powerful customers
Large customers have less power to nego9ate because of few close alterna9ves
Large customers have less power to nego9ate because of few alterna9ves
SubsHtute Products Beqer insulated from powerful suppliers
Beqer able to pass on supplier price increases to customers
Suppliers have power because of low volumes, but a differen9a9on-‐focused firm is beqer able to pass on supplier price increases
Bargaining Power Suppliers
Can use low price to defend against subs9tutes
Customer’s become aqached to differen9a9ng aqributes, reducing threat of subs9tutes
Specialized products and core competency protect against subs9tutes
Rivalry ExisHng CompeHtors
Beqer able to compete on price Brand loyalty to keep customers from rivals
Rivals cannot meet differen9a9on-‐focused customer needs
Boston Consul9ng Group – BCG Matrix
21
Market Growth
HIGH
LO
W
HIGH LOW
RelaHve Market Share
Invest
Priori9ze Divest
Delete
0x 10x 1x
10%
25%
0%
Conclusion & final remarks
22
Next webinar = July 31:
BudgeHng & ForecasHng – PredicHng the Outcome
Vision is your Dream, strategy is HOW to dream 1. SWOT Analysis
• Analyzes pros & cons of your internal and external environment 2. Value Chain Analysis
• Maps acCviCes within your organizaCon and value creaCon per acCvity 3. Generic Compe99ve Strategy Analysis
• Analyzes your posiCon by idenCfying compeCCve advantage versus target group 4. Five Forces Analysis
• Analyzes influence of relevant groups on your compeCCve posiCon 5. BCG Matrix
• Analyzes the state of your product porHolio or company at a whole
Experience, Common Sense and Awareness of your Current PosiHon are the best tools to determine a solid Strategy to realize your Dream
Webinar Program Overview 2012
June 19: Business Plan Wri9ng -‐ A Roadmap to Success July 3: Pitching & Presenta9on -‐ 3 Minutes, 1 Impression July 17: Strategy -‐ A Vision for the Future, A Strategy for Ge2ng There July 31: BudgeHng & ForecasHng -‐ PredicHng the Outcome Aug 14: Working Capital -‐ An Unknown Key to Success Aug. 28: Capital Management -‐ Playing with Risk Sept 11.: Funding & Investments -‐ Some Sources are More Equal then Others Sept. 25: Valua9on -‐ Art or Science Oct 9: Exit Strategy -‐ Nice to Have or Need to Have? Oct. 23: Bootstrapping -‐ An Alterna9ve Answer to Funding Nov 6: Crowdfunding -‐ The Power of Friends, Family and Fools Nov. 20: Networking -‐ Nice You have 3000 Friends, I have 30 Relevant Connec9ons Dec. 4: Marke9ng & (Social) Media -‐ Noise or Value? Dec. 11: No Sales, No Glory Dec. 18: Most Common Mistakes of Entrepreneurs
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BECOME A VIP MEMBER WITHIN 1 WEEK AND GET YOUR PLAN CHECKED!
1. Increased Business Exposure and Social Media IntegraHon 2. Jay Abraham's Business Maximizer Manual 3. Access To Exclusive Expert Events Twice A Month 4. "Special SoluHon" AcHon-‐Based Reports, at least twice a month 5. VIP Only Discounts 6. VIP Weekly Newslejer 7. VIP Inner Circle 8. eProducts from the world's largest library
9. IN ADDITION: If you ajended this workshop AND become a VIP Member of EFactor within ONE WEEK, you can send me you quesHons on working capital and I will provide you with assistance: www.efactor.com/hukshorn
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HTTP://WWW.EFACTOR.COM/VIP
Thank you!
This document was prepared by Eva Hukshorn. Several people and organizaHons have inspired
her to write this presentaHon, amongst which are, but not limited to the Founders of EFactor,
ABN AMRO/RBS, University of Groningen, InsHtute for Management Accountants