Foundation of business management

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ZEN TRAVEL GUIDE LINE – COURSE PROJECT 360º ANALYSIS, STRATEGIC PLANNING & BP

MSTCO101 – BUSINESS MANAGEMENT

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INTRODUCTION

SYNOPSIS This document provides the tools, steps and processes to achieve an in depth 360º analysis and all the variables affecting the strategic plan & business plan making for your COURSE PROJECT: TRAVEL ZEN . It is also a tool to define implementation and follow up.

Analytical methods and tools are key to ensure consistency and the appropriate level of rigour is applied to the analysis.

The tools must help to answer the question that the organisation has asked. The aim of the analytical tool is to sharpen the focus of the analysis and to ensure a methodical, balanced approach.

One of the key skills of a strategic analysis is understanding which analytical tools or techniques are most appropriate to the objectives of the analysis. We are providing an overview of some of the more commonly used strategic analysis tools:

• Swot Analysis • Boston Consulting Group (BCG) • Pest Analysis • Porter´s Analysis • The 4 corner´s Analysis • Value chain • War Gaming

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1.INTRODUCTION

This work is bespoke in order to support in providing an understanding on the local market and to enable us to determine which are the core targets, our

positioning and products definition and therefore provide with conclusions for a business model proposal & strategic plan..

2 PHASES

MARKET AND

ENVIRONMENT ANALYSIS

COMPANY

SITUATION AND FUTURE PLANS

WISHED

STRATEGIC POSITIONING

 Business Plan

 Action Plan  Strategic

Map  Objectives  Road Map  Timings

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2.PHASES

ANALYSE LOCAL MARKET

Detailed 360º Local Market Research is conducted.

Marketing Mix and local Business Model document is drafted considering strategic positioning.

DEFINITION OF VALUE PROPOSITION

Definition of product benefits benefits

for the customers.

PLANNING LAUNCH

Plans, forecast and calendars are made for undertaking all the activities necessary to adapt the product to the local reality.

CONDUCT LAUNCH

The planned activities are undertaken Develop Product Training. Adapting tools & processes in

implementation. Monitoring and follow up support is

provided.

Benchmarking of marketing mix and competitor analysis is key success factor to the whole process and what follows is a complete 360º overview of all the elements considered to run a successfull process and business set up before carrying out the subsequent phases.

ANALYSIS

& BENCHMARK

CONDUCT LAUNCH

PLANNING LAUNCH

DEFINITION OF VALUE

PROPOSITION

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3.LOCAL MARKET OVERVIEW

For instance:

 Map of the country

 Macro Country Data like: - Total Population - GDP - Currency - Country Indicators (Historic evolution) - Pest Analysis (see 3.1)

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3.1. PEST ANALYSIS

PEST analysis is a scan of the external

macro-environment in which an

organisation exists. It is a useful tool for

understanding the political, economic,

socio-cultural and technological

environment that an organisation

operates in. It can be used for

evaluating market growth or decline,

and as such the position, potential and

direction for a business.

Political factors. These include

government regulations such as

employment laws, environmental

regulations and tax policy. Other

political factors are trade restrictions

and political stability.

Economic factors. These affect the cost

of capital and purchasing power of an

organisation. Economic factors include

economic growth, interest rates,

inflation and currency exchange rates.

Social factors. These impact on the

consumer’s need and the potential

market size for an organisation’s goods

and services. Social factors include

population growth, age demographics

and attitudes towards health.

Technological factors. These influence

barriers to entry, make or buy decisions

and investment in innovation, such as

automation, investment incentives and

the rate of technological change.

PEST factors can be classified as

opportunities or threats in a SWOT

analysis. It is often useful to complete a

PEST analysis before completing a

SWOT analysis.

It is also worth noting that the four

paradigms of PEST vary in significance

depending on the type of business. For

example, social factors are more

obviously relevant to consumer

businesses or a B2B business near the

consumer end of the supply chain.

Conversely, political factors are more

obviously relevant to a defence

contractor or aerospace manufacturer.

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SCOPE CRITERIA

IMPACT LEVEL

(Low / Medium / High)

PRIORITIZATION (1 ~~ 4)* Important + urgent = 1

Important + non urgent = 2 Non important + urgent = 3

Non important + non urgent = 4

CRITERIA

IMPACT LEVEL (Low /

Medium / High)

PRIORITIZATION (1 ~~ 4)*

POLITICAL

• Regulatory bodies and policies • Grants and initiatives

• Government policies • Home market pressure groups

• Government stability and change

ECONOMIC

• Home economy trends • Exchange rates

• Overseas economy trends • Monetary issues

• Seasonality issues • Inflation rate

• Specific industry factors • Interest rates

• Distribution trends • Labor costs

SOCIAL

• Lifestyle trends • Emphasis on safety

• Population growth rate • Media views

• Age distribution • Role models

• Education level • Ethnic/religious factors

• Consumer attitudes • Advertising

• Health consciousness

TECHNOLOGICAL

• Basic technological infrastructures • Innovation potential

• Technologies replacement • Spending on research & development

• Maturity of technology • Technology access

• Rate of technologic change

ENVIRONMENT • Climate • Weather

• Climate change • Attitudes towards ecological products

LEGAL

• Current legislation • Consumer law

• Future legislation • Employment law

• International legislation • Competition regulation • Licensing, patents and intellectual property issues

• Safety law

• Data protection • Law changes affecting social factors

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3.2.SIZE 3.3. EVOLUTION

3.4.TRENDS AND FORECAST

Please, include charts/Graphs which provide quantitative data information

3.5.FEATURES

SAMPLE CHART Forecast

2019 2020 2021 2022

10%

14%

18%

9% 4%

Sample A B

For instance: quantitative data of Markets / Industry

For instance: characteristics & data

For instance: market size, regulations, evolution, trends, features, etc

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BASIC ATTRIBUTES to be inside the category

VALUED ATTRIBUTES

Attributes that helps brands to be different from the

competitors

DIFFERENT ATTRIBUTES Attributes that are unique and

builds

3.6.PRODUCTS

3.7. BUSINESS MODEL

3.8 DRIVERS OF DEMAND

3.9. DISTRIBUTION CHANNEL OVERVIEW

Please, include charts/Graphs which provide quantitative data information

For instance: market products variable analysis

For instance: 360º different channel distribution analysis

For instance: existing business models typology in markets

For instance: drivers of demand analysis and classification

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10%

14% 6%

18%

9% 4%

Channel Distribution A

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3.11.THE COMPETITORS

Understanding the competition is essential to corporate strategy planning How competitive is your market? What are your competitors doing, likely to be doing? Evaluate the following:

Who are your competitors?

Who are your major competitors, how big are they, what is their market share?

What reputation do they have?

How do they distribute their

products?

What is their marketing like - do they diversify?

What are their key strengths and

weaknesses?

Which is their key benefit?

Competitors´s Marketing Mix Analysis (product, place, Price, promotion)

Profile competitor strategies, sales, operational set-up, and distribution?

What are our competitive threats?

What are our competitors’ strengths and weaknesses?

How can we measure our

performance against our competitors?

What can we learn from

competitors’ success?

Can you build a shortlist of potential partners best suited to our needs?

Four Corner´s Analysis

Competitors SWOT 360º

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A. COMPETITORS OVERVIEW SAMPLE

code meaning

√ YES

≈ SAME COVERAGE LEVEL

X NO

Competitor

A Competitor

B Competitor

C Competitor

COVERAGE X

COVER √ √ √ √

COVER ≈ X √ √

COVER X √ √ √

COVER √ X √ X

COVER √ √ √ √

COVERAGE X

COVER √ √ √ √

COVER X X √ √

COVER X X √ X

COVERAGE X

COVER √ √ √ √

COVER √ √ X √

PRICE

COVER X ≈ X √

COVER X X √ X

COVER √ √ √ √

COVER X X √ X

COVER √ √ √ √

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B. COMPETITORS´POSITIONING SAMPLE

C. THE 4 CORNER´S ANALYSIS

Developed by Michael Porter, the four

corner’s analysis is a useful tool for

analysing competitors. It emphasises that

the objective of competitive analysis

should always be on generating insights

into the future.

The model can be used to:

• develop a profile of the likely

strategy changes a competitor might

make and how successful they may be

• determine each competitor’s

probable response to the range of

feasible strategic moves other

competitors might make

• determine each competitor’s

probable reaction to the range of

industry shifts and environmental

changes that may occur.

The ‘four corners’ refers to four

diagnostic components that are essential

competitor analysis: future goals; current

strategy; assumptions; and capabilities.

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MOTIVATION ACTIONS

D. WAR GAMING

War games are a useful technique for

identifying competitive vulnerabilities

and misguided internal assumptions

about competitors’ strategies.

Simulations of competitive scenarios

are used to explore the implications of

changes in strategy in a ‘no risk’

environment. They also encourage new

ways of thinking about the competitive

context. War games are often

particularly useful for organisations

facing critical strategic decisions.

A typical business war game has the

following characteristics:

•an off-site venue

•senior managers representing a cross-

functional mix of participants

•two to three full days’ duration

•four or more teams of between four

to eight people each. Each team

represents either the sponsoring

company or one of its competitors

•preparation time in which each team

receives a dossier describing the

company they are representing, and its

strengths and weaknesses

It also has the following characteristics:

• Financial goals • Corporate culture • Organisational structure • Leadership team backgrounds • External constraints • Business philosophy

• How the business creates value • Where the business is choosing to invest •Relationships and networks the business has developed

Management assumptions • Company’s perceptions of its strengths and weaknesses • Cultural traits • Organisational value • Perceived industry forces • Belief about competitor’s goals

Capabilities • Marketing skills • Ability to service channels • Skills and training to work force • Patents and copyrights • Financial strength • Leadership qualities of CEO

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•A structure where games comprise

several ‘moves’ or decision rounds.

Each move consists of a fixed,

predetermined amount of time ranging

from a couple of months to several

years. During each move, teams make

and carry out strategic decisions. After

each move, teams assess their positions

relative to other teams.

•A ‘control team’ of facilitators who

serve as the board of directors. They

ensure that strategic plans are

acceptable and legal. They also

facilitate the debrief, in which

participants review the merit of each

strategy

3.12. INDUSTRY PRACTICES AND ANALYSIS

3.13. SUBSTITUTIVE PRODUCTS

3.14. PORTERS´S FIVE FORCES ANALYSIS

Porter's five forces of competitive

position analysis was developed in 1979

by Michael E. Porter of Harvard Business

School as a simple

Framework for assessing and evaluating

the competitive strength and position of

a business organisation.

This theory is based on the concept that

there are five forces which determine the

competitive intensity and attractiveness

of a market. Porter’s five forces helps to

identify where power lies in a business

situation. This is useful both in

understanding the strength of an

organisation’s current competitive

position, and the strength of a position

that an organisation may look to move

into.

Strategic analysts often use Porter’s five

forces to understand whether new

products or services are potentially

For instance: industry best practices & features analysis

Analysis

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profitable. By understanding where

power lies, the theory can also be used to

identify areas of strength, to improve

weaknesses and to avoid mistakes.

The five forces are:

1. Supplier power. An assessment of

how easy it is for suppliers to drive up

prices. This is driven by:

• the number of suppliers of each

essential input

• the uniqueness of their product or

service

• the relative size and strength of the

supplier

• the cost of switching from one

supplier to another.

2. Buyer power. An assessment of how

easy it is for buyers to drive prices

down. This is driven by:

• the number of buyers in the market

• the importance of each individual

buyer to the organisation

• the cost to the buyer of switching

from one supplier to another.

If a business has just a few powerful

buyers, they are often able to dictate

terms.

3. Competitive rivalry. The key driver is

the number and capability of

competitors in the market. Many

competitors, offering undifferentiated

products and services, will reduce market

attractiveness.

4. Threat of substitution. Where close

substitute products exist in a market, it

increases the likelihood of customers

switching to alternatives in response to

price increases. This reduces both the

power of suppliers and the attractiveness

of the market.

5. Threat of new entry. Profitable

markets attract new entrants, which

erodes

profitability. Unless incumbents have

strong and durable barriers to entry, for

example, patents, economies of scale,

capital requirements or government

policies, then profitability will decline to a

competitive rate.

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3.15. SWOT Analysis

What are the barriers, risks and competitive threats?

A SWOT analysis is a simple but widely

used tool that helps in understanding

the strengths, weaknesses,

opportunities and threats involved in a

project or business activity.

It starts by defining the objective of the

project or business activity and

identifies the internal and external

factors that are important to achieving

that objective. strengths and

weaknesses are usually internal to the

organisation, while opportunities and

threats are usually external. Often

these are plotted on a simple 2x2

matrix.

• Supplier concentration • Importance of volume to supplier • Cost relative to selling price

• Buyer switching cost • Buyer propensity to substitute • Product differentiation

• Number of competitors • Size of competitors • Industry growth rate • Differentiation • Exit barriers

• Buyer information • Buyer volume • Buyer price sensitivity • Buyer switching costs • Bargaining leverage

e.g. • Switching costs • Economies of scale • Learning curve • Capital requirements • Patents

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When using SWOT analysis, it should be ensured that:

• Only specific, verifiable statements are used. An example might be ‘price is £1.50 per unit lower than competition’ rather than ‘good value for money’.

• Internal and external factors are prioritised so that time is spent concentrating on the most significant factors. This should include a risk assessment to ensure that high risk or high impact threats and opportunities are

clearly identified and are dealt with in priority order.

• Issues identified are retained for later in the strategy formation process.

• The analysis is pitched at the project or business activity level rather than

at a total company level, which may be less actionable.

• It is not used in exclusivity. No one tool is likely to be completely comprehensive, so a mixture of option- generating tools should be used.

4.MARKETING MIX: Product, Price, Channel and Promotion (Branding)

• What does your organisation do better than others?

• What are your unique selling points?

• What do you competitors and customers

in your market perceive as your strengths?

• What is your organisations competitive

edge?

• What political, economic, social-cultural, or technology (PEST) changes are taking place that could be favourable to you?

• Where are there currently gaps in

the market or unfulfilled demand?

• What new innovation could your

organisation bring to the market?

Weakness

• What do other organisations do better than you?

• What elements of your business add

little or no value?

• What do competitors and customers

your market perceive as your

weakness?

Threats

• What political, economic, social-cultural, or technology (PEST) changes are taking place that could be unfavourable to you?

• What restraints to you face?

• What is your competition doing

that could negatively impact you?

For instance: analysis of 4 P´s variables: product, price, place, promotion

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4.1 PRODUCT DEFINITION PRODUCT LIFE CYCLE POSITIONING IN THE LOCAL MARKET

xxxxx

Life

Time e

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PRODUCT DEFINITION CHART

Object of the insurance/service

Type of insurance/service

Insurance (individual or group)

Description and coverage

Brief description of the insurance/service

Coverage, guarantees, benefits: compulsory, optional/possible complementary ones, limits and examples of exclusions,etc

Needs to be covered Why it is important to create this insurance/service

Source of the demand

Commercial network, new market needs, market competition, departments,…

Similar trends in the market

describe

Segments it targets General description of the potential customer's profile, mentioning any differentiating characteristics that might exist:

 Target Audience.

 Territorial Scope.  Any other aspect which sets the target segment apart.

General characteristics

This section offers an initial description of the product's configuration, in terms of the general and specific characteristics desired for said product:

 Whether there is a fee and, if so, who will receive it

 Method of paying premiums and fees or charges per service -Periodicity

 Who is paid

 Term.

 Metrics for SLA (Service Level Agreement)

 Working timetable

Distribution channels B2B, B2B2C, B2C

Distribution method: Channels definition

Legal Verification:

 If the product is to be sold as insurance: Information related to the class is compiled: identification of the class and whether we have an applicable license for the class.

 If the product is to be sold as a service: It will be verified whether it can be sold as a service.

Technical report on the risk and need to reinsure:

Identification of the risk: The risk is precisely defined and specified. It is decided whether or not it is a new risk. A risk is considered new if it has never been insured before or, if it has been insured before, its conditions have since changed.

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4.2. PRICE

PREMIUM DEFINITION AND BREAKDOWN

PREMIUM BREAKDOWN PRICE /

TOTAL

NET INSURANCE PREMIUM

ADMIN. COSTS

ADQUISITION COSTS

CLAIMS HANDLING COSTS

FRONTING FEE

COMMISSION 1

COMMISSION 2

COMMISSION 3

INCENTIVES

TAXES

TOTAL

xxxxx

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COMMISSIONS AND INCENTIVES STRUCTURE

Product Agency/Dealer commission

Sales Agent Commision

Other Commisions

TOTAL

A X% X% X%

B X% X% X%

C x% x% x%

4.3. CHANNEL DEFINITION OF SALES CHANNELS AND SELLING RATE For instance:

Which retail and channels will

maximise sales?

What is the threat from private

label or own products?

What are the barriers to entry?

What are the risks to our business

plan?

Can you identify key producers,

production output and capacity?

Are we missing any alternative

distribution channel opportunities?

What are the costs and margins at

each stage of the supply chain

Etc ….

4.4. CURRENT PORTFOLIO BUSINESS/ BOSTON CONSULTING GROUP (BCG)

Strategy can be developed on many

levels—for example, national, regional,

industry, or multibusiness

corporation—but perhaps is most

commonly developed at the business

unit level.Business unit strategy entails

knowing what business you are (or

should be) in, understanding the

current and future sources of

competitive advantage in that business,

and then defining a plan to capture and

sustain an unassailable relative

advantage over competitors.Several

questions are central to the

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development of a business unit

strategy:

• How well are we positioned in

relation to competitors?

• What can we do to enhance our

relative advantage?

• What can we learn from

customers today to better compete

tomorrow?

• What specific moves will

position us for greater success?

• Can our current business model

take us into the future?

• Developing a strategic response

to moves by traditional or emerging

competitors

• Understanding future risks and

their implications for strategy

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4.5. PRODUCT POSITIONING

A. MATRIX SAMPLE

B. CONCLUSIONS:

For instance: on our positioning decisions (Key Success Factors)

ZENTRAVEL

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4.6. DEFINITION AND POSITIONING

The key concepts to be compared as an example could be: price, innovation, coverage, distribution.XXX XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX PRODUCTS´ATTRIBUTE VALUE DIAGRAM SAMPLE:

4.7. VALUE CHAIN ANALYSIS

Value chain analysis is a comprehensive

technique for analysing an organisation’s

source of competitive advantage.

Before making a strategic decision, it is

important to understand how activities

within the organisation create value for

customers. One way to do this is to

conduct a value chain analysis.

Value chain analysis is based on the

principle that organisations exist to create

value for their customers. In the analysis,

the organisation’s activities are divided

into separate sets of activities that add

value. The organisation can more

effectively evaluate its internal

capabilities by identifying and examining

each of these activities. Each value adding

activity is considered to be a source of

competitive advantage.

The three steps for conducting a value

chain analysis are:

1. Separate the organisation’s

operations into primary and support

activities.

Primary activities are those that physically

create a product, as well as market the

product, deliver the product to the

customer and provide after-sales

support. Support activities are those that

facilitate the primary activities.

2. Allocate cost to each activity.

Activity cost information provides

managers with valuable insight into the

internal capabilities of an organisation.

3. Identify the activities that are

critical to customer’s satisfaction and

market success.

There are three important considerations

Better

Worst

Price Cover Innovation Distribution Branding

COMPETITORS

ZEN TRAVEL

PERCEPTION

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in evaluating the role of each activity in

the value chain.

• Company mission. This influences the

choice of activities an organisation

undertakes.

• Industry type. The nature of the

industry influences the relative

importance of activities.

• Value system. This includes the value

chains of an organisation’s upstream and

downstream partners in providing

products to end customers.

4.8. CUSTOMER RESEARCH

A. PROFILE

B. FEATURES

C. MARKET NEEDS

D. CURRENT OFFER

E. TRENDS

F. ON-LINE CUSTOMER BEHAVIOUR

4.9. MISTERY SHOPPING

A. TYPE OF CLIENT VISITED

B. CONCLUSIONS

Define

Identify & Define

Define

Identify

Target

KSF highlight

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5. PROCESSES

5.1. DEFINITION OF ISSUING NEEDS

5.2. DEFINITION OF FINANCE/ACCOUNTING NEEDS

5.3. DEFINITION OF COMMERCIAL & MARKETING NEEDS

5.4. DEFINITION OF LEGAL NEEDS

5.5. DEFINITION OF OPERATIVE NEEDS

5.6. DEFINITION OF IT NEEDS

5.7. DEFINITION OF REPORTING AND FOLLOW UP TOOLS

6. 360º BUSINESS UNIT CURRENT VIEW VERSUS PROJECT

A. CHECKLIST OF THE PENDING TOPICS TO BE DONE

For instance: Define tools, support, functionalities, etc……

For instance,: tools, flows, collection, commission payment, etc

For instance: structure, trends, campaigns, incentives, etc

For instance: compliance, contracts, business models validation,etc

For instance: flows, tools, processes, network,training,etc

For instance: tools, functionalities, capabilities

For instance: reporting system, periodicity, key people, etc.

Take the picture: what we are  what we want to be

Miscellaneous

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7. BUSINESS PLAN STRUCTURE & STRATEGIC PLAN

A) EXECUTIVE SUMMARY

B) CURRENT SITUATION (Market, product, competitors, distribution channels and macro environment)

C) SWOT ANALYSIS

D) STRATEGIC PLAN DEFINITION (target market, positioning, product´s lines, pricing, distribution sales structure, communication and marketing, promotion, etc…)

E) ACTION PLAN

F) MONITORING AND FOLLOW UP TOOLS AND REPORTING

G) P&L

2019 2020 2021

INCOMES

TOTAL EXPENSES

FINANCIAL RESULTS

RESULT BEFORE TAXES

8. CONCLUSIONS, KSF AND NEXT STEPS

Who, what, how & when

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