strategy - a vision for the future, a strategy for getting there

Strategy A vision for the future, a strategy for ge2ng there Author: Eva Hukshorn

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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

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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

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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

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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

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•  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-‐Vision Product


A summary of your vision and strategy: Your milestone overview

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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

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•  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

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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

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RIVALRY EXISTING

COMPETITORS

Five Forces Analysis: New entrants

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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

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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

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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

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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

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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

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Market Growth

HIGH

LO

W

HIGH LOW

RelaHve Market Share

Invest

Priori9ze Divest

Delete

0x 10x 1x

10%

25%

0%

Conclusion & final remarks

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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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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