Balance Score Card

Balance Score Card

The balanced scorecard is a strategic planning and management system that is used extensively in business and industry, government, and nonprofit organizations worldwide to align business activities to the vision and strategy of the organization, improve internal and external communications, and monitor organization performance against strategic goals.

A common use of balanced scorecard is to support the payments of incentives to individuals, even though it was not designed for this purpose nor is particularly suited to it.

The four perspectives

The 1st generation design method proposed by Kaplan and Norton was based on the use of three non-financial topic areas as prompts to aid the identification of non-financial measures in addition to one looking at financial. Four "perspectives" were proposed

·         Financial: encourages the identification of a few relevant high-level financial measures. In particular, designers were encouraged to choose measures that helped inform the answer to the question "How do we look to shareholders?"

·         Customer: encourages the identification of measures that answer the question "How do customers see us?"

·         Internal business processes: encourages the identification of measures that answer the question "What must we excel at?"

·         Learning and growth: encourages the identification of measures that answer the question "How can we continue to improve and create value?".

Strategy Mapping

Strategy maps are communication tools used to tell a story of how value is created for the organization.  They show a logical, step-by-step connection between strategic objectives (shown as ovals on the map) in the form of a cause-and-effect chain.  Generally speaking, improving performance in the objectives found in the Learning & Growth perspective (the bottom row) enables the organization to improve its Internal Process perspective Objectives (the next row up), which in turn enables the organization to create desirable results in the Customer and Financial perspectives (the top two rows).

Reference

http://www.balancedscorecard.org/bscresources/aboutthebalancedscorecard/tabid/55/default.aspx

Supportive

What is Strategic Planning?

Strategic planning is an organizational management activity that is used to set priorities, focus energy and resources, strengthen operations, ensure that employees and other stakeholders are working toward common goals, establish agreement around intended outcomes/results, and assess and adjust the organization's direction in response to a changing environment. It is a disciplined effort that produces fundamental decisions and actions that shape and guide what an organization is, who it serves, what it does, and why it does it, with a focus on the future. Effective strategic planning articulates not only where an organization is going and the actions needed to make progress, but also how it will know if it is successful.

What is a Strategic Plan?

A strategic plan is a document used to communicate with the organization the organizations goals, the actions needed to achieve those goals and all of the other critical elements developed during the planning exercise. 

What is Strategic Management?

Strategic management is the comprehensive collection of ongoing activities and processes that organizations use to systematically coordinate and align resources and actions with mission, vision and strategy throughout an organization. Strategic management activities transform the static plan into a system that provides strategic performance feedback to decision making and enables the plan to evolve and grow as requirements and other circumstances change.

What Are the Steps in Strategic Planning & Management?

There are many different frameworks and methodologies for strategic planning and management. While there is no absolute rules regarding the right framework, most follow a similar pattern and have common attributes. Many frameworks cycle through some variation on some very basic phases:

1) analysis or assessment, where an understanding of the current internal and external environments is developed,

2) strategy formulation, where high level strategy is developed and a basic organization level strategic plan is documented 

3) strategy execution, where the high level plan is translated into more operational planning and action items, and

4) evaluation or sustainment / management phase, where ongoing refinement and evaluation of performance, culture, communications, data reporting, and other strategic management issues occurs. 

What Are the Attributes of a Good Planning Framework?

The Association for Strategic Planning (ASP), a U.S.-based, non-profit professional association dedicated to advancing thought and practice in strategy development and deployment, has developed a Lead-Think-Plan-Actrubric and accompanying Body of Knowledge to capture and disseminate best practice in the field of strategic planning and management. ASP has also developed criteria for assessing strategic planning and management frameworks against the Body of Knowledge.

These criteria are used for three primary purposes:

• Ensure that the ASP Body of Knowledge is continuously updated to include frameworks that meet these criteria.
• Maintain a list of qualifying commercial and academic frameworks recommended for study and training, to prepare participants to sit for the three ASP certification examinations.
• Provide a resource and "check list" for practitioners as they refine and improve their organization's systems and for consultants as they improve their product and service offerings.

The criteria developed by the ASP are:

1. Uses a Systems Approach that starts with the end in mind.
2. Incorporate Change Management and Leadership Development to effectively transform an organization to high performance.
3. Provide Actionable Performance Information to better inform decision making.
4. Incorporate Assessment-Based Inputs of the external and internal environment, and an understanding of customers and stakeholder needs and expectations.
5. Include Strategic Initiatives to focus attention on the most important performance improvement projects.
6. Offer a Supporting Toolkit, including terminology, concepts, steps, tools, and techniques that are flexible and scalable.
7. Align Strategy and Culture, with a focus on results and the drivers of results.
8. Integrate Existing Organization Systems and Align the Organization Around Strategy.
9. Be Simple to Administer, Clear to Understand and Direct, and Deliver Practical Benefits Over the Long-Term.
10. Incorporate Learning and Feedback, to Promote Continuous Long-term Improvement.

There are numerous strategic planning and management frameworks that meet these criteria,

Wiseman -The Strategic Options Generator

The strategic options generator consists of answering 5 questions, each of which has several possible answers:

1. What is the strategic target?
2. What strategic thrust can be used against the target?
3. What strategic mode can be used?
4. What direction of thrust can be used?
5. What information skills can be used?
   
   

   Reference
   
   http://www.jdca.com.au/Services/Services/Strategic-Option-Generator.asp
   
   

Online Auction Vs Traditional Auction

Online marketing and e commerce are two new divisions being set up by every organization in a big to get into the bandwagon of Internet based selling. B to B and B to C models have developed significantly over the last few years and are fast replacing traditional modes of business transactions. Online-auction too is one of the important channels that the e commerce has spawned.

You may have been into traditional auction and buying things in the past. Now if you were planning to enter into online e auctions, you would need to understand how this works. Online-auctions are different from traditional auctions. Unless you know these differences you would not be able to decide what is suitable for you.

In an online-auction, one is not able to see or view the merchandise unlike in the traditional auction. If you are purchasing high priced collectibles then this fact does make a difference.

It is quite difficult for anyone to communicate with the sellers in an online auction. Few sites do offer online chat, but still it is inconvenient.

Online auctions do have their benefits. Primary advantage being that the seller does not have to secure or rent a premise to hold the auction and invite buyers to attend.

In case of online-auction the seller stands to save on a lot of expenses besides paying for the hall or the venue. He does not have to pay for looking after the people who attend the auction and can save expenses towards lunch etc.

Online auction is an advantage to the seller in the sense that he need not restrict the participation to any particular location and can invite prospective buyers from anywhere in the world. This gives him access to a wider market.

People who know online auction procedures and technicalities thoroughly are in a position to decide and participate in either of the auctions depending upon case to case.

Reference  

http://ezinearticles.com/?Online-Auction-Vs-Traditional-Auction&id=4979522

Porter five forces analysis

      i.        Threat of new potential entrants

·         The existence of barriers to entry (patents, rights, etc.) The most attractive segment is one in which entry barriers are high and exit barriers are low. Few new firms can enter and non-performing firms can exit easily.

·         Economies of product differences

·         Brand equity

·         Switching costs or sunk costs

·         Capital requirements

·         Access to distribution

·         Customer loyalty to established brands

·         Absolute cost

·         Industry profitability; the more profitable the industry the more attractive it will be to new competitors.

     ii.        Threat of substitute product/services

·         Buyer propensity to substitute

·         Relative price performance of substitute

·         Buyer switching costs

·         Perceived level of product differentiation

·         Number of substitute products available in the market

·         Ease of substitution. Information-based products are more prone to substitution, as online product can easily replace material product.

·         Substandard product

·         Quality depreciation

    iii.        Bargaining power of suppliers

·         Supplier switching costs relative to firm switching costs

·         Degree of differentiation of inputs

·         Impact of inputs on cost or differentiation

·         Presence of substitute inputs

·         Strength of distribution channel

·         Supplier concentration to firm concentration ratio

·         Employee solidarity (e.g. labor unions)

·         Supplier competition - ability to forward vertically integrate and cut out the BUYER

    iv.        Bargaining power of buyers

·         Buyer concentration to firm concentration ratio

·         Degree of dependency upon existing channels of distribution

·         Bargaining leverage, particularly in industries with high fixed costs

·         Buyer switching costs relative to firm switching costs

·         Buyer information availability

·         Availability of existing substitute products

·         Buyer price sensitivity

·         Differential advantage (uniqueness) of industry products

·         RFM Analysis

     v.        Rivalry among current competitors

·         Sustainable competitive advantage through innovation

·         Competition between online and offline companies

·         Level of advertising expense

·         Powerful competitive strategy

·         Flexibility through customization, volume and variety

Reference

http://en.wikipedia.org/wiki/Porter_five_forces_analysis#Threat_of_new_competition

Cost–benefit analysis

CBA has two purposes:

1. To determine if it is a sound investment/decision (justification/feasibility),
2. To provide a basis for comparing projects. It involves comparing the total expected cost of each option against the total expected benefits, to see whether the benefits outweigh the costs, and by how much.

Theory

Cost–benefit analysis is often used by governments and other organizations, such as private sector businesses, to evaluate the desirability of a given policy. It is an analysis of the expected balance of benefits and costs, including an account of foregone alternatives and the status quo. CBA helps predict whether the benefits of a policy outweigh its costs, and by how much relative to other alternatives (i.e. one can rank alternate policies in terms of the cost-benefit ratio). Generally, accurate cost-benefit analysis identifies choices that increase welfare from a utilitarianperspective. Assuming an accurate CBA, changing the status quo by implementing the alternative with the lowest cost-benefit ratio can improve Pareto efficiency. An analyst using CBA should recognize that perfect evaluation of all present and future costs and benefits is difficult, and while CBA can offer a well-educated estimate of the best alternative, perfection in terms of economic efficiency and social welfare are not guaranteed.


Process

1. List alternative projects/programs.
2. List stakeholders.
3. Select measurement(s) and measure all cost/benefit elements.
4. Predict outcome of cost and benefits over relevant time period.
5. Convert all costs and benefits into a common currency.
6. Apply discount rate.
7. Calculate net present value of project options.
8. Perform sensitivity analysis.
9. Adopt recommended choice.

Valuation

1. Effects on users or participants
2. Effects on non-users or non-participants
3. Externality effects
4. Option value or other social benefits.

Reference

http://en.wikipedia.org/wiki/Cost%E2%80%93benefit_analysis

 

McFarlan’s Strategic Grid

McFarlan's Strategic Grid

Strategic
These applications are those with currently high business value and are also critical for the future success of the company.

Support
The support is that application in the organization which is not having very critical impact for the organization in running their business process and in future also it does not supposed to have such impact on the future business.

Turnaround
In any organization there are some projects that usually do not have enough attention. This might be because of not having enough budgets allocated for them. However, these might be important factors in their future business success. It has high potential opportunity, need more planning, and creative thinking.

Reference

http://spotlight123.wikispaces.com/McFarlan's+Strategic+Grid

http://100percent.wikispaces.com/McFarlan+Strategic+Grid

Eight stages of technological innovation

1.Basic research (for general nature laws)
2.Applied research (for specific problems)
3.Development (design for prototyping)
4.Engineering (design for assembly)
5.Manufacturing (design for efficiency & quality)
6.Marketing (design for acceptance & affordability)
7.Promotion (design for diffusion)
8.Improvement & enhancement (design for sustainability)