宝洁公司的战略实施与控制系统

IMPLEMENTINGSTRATEGY&CONTROLSYSTEMSATP&GGerryKingham FinanceMgr.P&GNordic Agenda Re-capofpreviouslecture Fromglobaltolocalstrategy-making Strategyexample:Yeshand-dish ManagementControlSystemsChoiceCascadetoDefinetheChoicesWhatareourgoalsandAspirations?WherewillwePlay?WhatCapabilitiesmustbeinplacetowin?HowwillweWininchosenmarket?WhatManagementSystemsarerequired?ChoiceCascadetoDefinetheChoicesWhatareourgoalsandAspirations?WherewillwePlay?WhatCapabilitiesmustbeinplacetowin?HowwillweWininchosenmarket?WhatManagementSystemsarerequired?Re-caponlecture1 Wherewillweplay? TotalShareholderReturncalculationsbyGlobalBusinessUnit Howwillwewin?CommercialStrategy Focusoncorebrands ConsumerIsBoss WinwithwinningcustomersCompetitiveretailmarginsstrongTailorInvestmentsByCustomerBeStrongWithGlobalCustomers Getthevalueequationright Knowthecompetitors Whatcapabilitiesmustbeinplace? Globalmatrixstructure:GlobalBusinessUnits(GBUs)andMarketDevelopmentOrganizations(MDOs) Individualaccountability,Work&DevelopmentPlansHOMEWORK WhatshareofshelfdoesYEShave? Whatdoyouthinkithasinmarketshare? Whatdoyoulearnfromthepricingandsizingyousee? Whymightitbeso? Whatinfluencestheshelfpositioning? WhatwouldyourYESstrategybe?HOMEWORK WhatshareofshelfdoesYEShave? Ca.60% Whatdoyouthinkithasinmarketshare? Sameasshelfshare(60-70%) Whatdoyoulearnfromthepricingandsizingyousee? Whymightitbeso? Smallersizesoffer“extrabenefits,butaremore expensivepr.ml Whatinfluencestheshelfpositioning? Lookslikethebigbottlesareatthebottom WhatwouldyourYESstrategybe?ChoiceCascadetoDefinetheChoicesWhatareourgoalsandAspirations?WherewillwePlay?WhatCapabilitiesmustbeinplacetowin?HowwillweWininchosenmarket?WhatManagementSystemsarerequired?ImplementingstrategyFirst:UnderstandingthecustomerHOWWILLWEWIN?RetailisstillfragmentedShareoftop50publiccompanies,1998EnergyAutomotivePharmaceuticals;diagnosticsElectronicsTelecomPackagedgoodsFinancialindustriesChemicalsRetail Source: GlobalVantage;McKinseySheet:RetailingisstilllocalEnergyFinancialinstitutionsAutomotiveRetailPackagedgoodsElectronicsAveragenumberofcountriesofoperationforlargestcompanies(1998) Note: Largestcompaniesdefinedbytotalrevenue Source: Hoovers;McKinseyHOWWILLWEWIN?Sheet:GrowingEuropeanM&AactivitiesinRetailUSDb,dealvolume* * OnlydiscloseddealconsiderationsinexcessofUSD25million Source: Amdata;ThomsonFinancialSecurities;McKinseyanalysisNon-Europeancross-borderEuropeancross-borderDomestic2.99.312.00.71994199519961997199812.41999toSeptember16.0Inrecentyears,bothtotaldealvolumeandpropositionofn…….…….dealsincreasingstronglyThereisawaroutthereDemand Flat/fallingshareofwallet Flat/fallingprices Moredemandingandcomplexconsumers ShiftinglifestyleandworkpatternsSupply Overcapacity Newentrants(e-tailersandretailers) Supplierconsolidation Lowavailability/risingcostoffrontlinelabour IncreasingrealestatecostsPowershiftingtoconsumersInternetisacceleratingtrends Source: McKinseyHOWWILLWEWIN?Sweden Mostconsolidatedretailmarketintheworld–theBIGarealreadyBIG ICAowned50%byAhold Aholdhighlyfinanciallydrivencompany–EVA MorepressureonICA……morepressureonsuppliers Wantshigherprofits,higherturnover,happierconsumers(differentiatethemselvesvs.Competition)HOWWILLWEWIN?Nowweknowthecustomer…canwefindasweetspot? Howwillwewin? ConsumeristheBOSS CoreBrands WinwithwinningcustomersCompetitiveretailmarginsstrongTailorInvestmentsByCustomerBeStrongWithGlobalCustomers Howwillwewin–SweetSpot? Launchaproduct,withuniqueconsumerbenefits,withhighercustomermargins,thatdrivetotalTSRforP&GHavingtherightcapabilities P&Gtriestomirrorhowthecustomerworks Weworkinmultifunctionalteams,toaddresscomplexbusinessissues InamatrixorganisationindividualaccountabilityisKEYGlobalAholdCustomerTeamOverviewP&GAholdGlobalTeamTeamleader(VP)&MultifunctionalBasedinRotterdamRegionalTeamsUSA,Europe,LatinAmerica,andAsiaRegionalCustomerHQAholdManagementinZaandamLocalTeams-ICA/Hakon(AholdNordic)-Teamleader&multifunctionalteamLocalCustomersICA/HakonDepartmentLocalNordicTeam Sales:Teamleader,Keyaccountmanagers Finance Marketing Logistics Customermarketing Ordergroup,backofficesupportEveryoneontheteamknowstheirroleintheGOAL&whattheyareMEASUREDontoSUCCEEDLocalNordicTeam-accountability Sales:Teamleader,Keyaccountmanagers Volume,Share,Costtoserve Finance Customerprofit,effecientspending Marketing Share,basketsize,traffic,categoryshare Logistics Shelfavailability,perfectorders,inventories Ordergroup,backofficesupport PerfectOrders,leadtimes,nooverduesControlSystemsFinancialSalesFundamentalsIndividualPerformanceActionstepsReminder:OGSMWhat?How? Objective Goals Strategies Measures Whatdoweneedtoachieve? QuantitativeTargetofProgresstowardtheObjective,withinaspecificallydefinedtimeframe Howwewillachieveourgoals.Itmustmakeaspecificdecisionoritisnotastrategy.Areallygoodstrategyisasetofoneormorestatements,eachofwhichonlymakesonespecificdecision. Mechanismtoprovidethenumericalanswerwhichestablishesourpositionversusgoal(s) Words Numbers Words NumbersP&GMeasures:e.g.YesAromaLaunch Objective:Securemarketleadershipwithinhand-dishbyofferingconsumersthebestvalueandbybeingthepreferredsupplierofhand-dishtoleadingcustomers Goals(note:notactualnumbers): Growvolumeby5% Deliver$1,433Mofvaluecontributiontothecompany Reach90%distributionin3monthsonAroma Reach80%shareofshelfP&GMeasures:e.g.YesAromaLaunch Strategies launchflankerswhich: Matchunmetconsumerpreferences GrowtotaltradeprofitabilityonYesbrand increaseconsumerandcustomermarketingspendyear1tosecuretrial usedisplaystogetfastdistributionearlyinyear donotincreasecurrentlevelanddepthofpromotions Measurements Volume:dailyshipmentreportsbycustomer Sharesbyproductandcustomer:Weekly/MonthlyNielsendata Marketpricesbyproductandcustomer:Weekly/MonthlyNielsendata Budgets:actualsversuscommitments;$/unit Valuecontribution(Brand/Product/Country):monthlyBrandProfitEstimates(BPEs)FINANCIALFIRM3.59-(10.0%)NORDICCONTRIBUTION150315.0340.3%143313.6538.0%AnnualGrowthrate90-10%95-5%YesAromaLaunch Measurements Volume:dailyshipmentreportsbycustomer Sharesbyproductandcustomer:Weekly/MonthlyNielsendata SalesFundamentalsbyproductandcustomer:Weekly/MonthlyNielsendata Budgets:actualsversuscommitments Valuecontribution(Brand/Product/Country):monthlyBrandProfitEstimates(BPEs)VolumeTracking dailyreportbycustomer/brandonintranet lookintodatabaseforshipmentsbyproductTotalShipmentdays23Actshipmentsdaysgone11Acttimegone(ofmonth)48%BRANDvs.ESTTodaysOrderAvgBalShiptoFIRMESTORDEREDArielxx%xxBoldxx%xxTotalFabricCarexx%xxFebrezexx%xxSwifferxx%xxMrProperxx%xxYes/FairyHD7.913.03.930%0.3Yes/FairyADWxx%xxTotalHomeCarexx%xxF&HCTotalxx%xxNORDICVolumeTracking00.0000.0e.g.Aromadisplaysarenotsellingasforecasted–why?YesAromaLaunch Measurements Volume:dailyshipmentreportsbycustomer Sharesbyproductandcustomer:Weekly/MonthlyNielsendata SalesFundamentalsbyproductandcustomer:Weekly/MonthlyNielsendata Budgets:actualsversuscommitments Valuecontribution(Brand/Product/Country):monthlyBrandProfitEstimates(BPEs)SharesTracking3.12.8NOPA.3.33.73.33.03.33.23.02.9Le.g.Aromaiscannibalizingasexpected.YesAromaLaunch Measurements Volume:dailyshipmentreportsbycustomer Sharesbyproductandcustomer:Weekly/MonthlyNielsendata SalesFundamentalsbyproductandcustomer:Weekly/MonthlyNielsendata Budgets:actualsversuscommitments Valuecontribution(Brand/Product/Country):monthlyBrandProfitEstimates(BPEs)SalesFundamentalsTracking…andalsodisplayWD,featureshare,shelfshare,etc.YESAROMA-APPLEPricePerUnitWithoutPromo(SFT)P12MP6MnovdecjanvsÄNGLAMARKTOTALSWEDEN35.134.934.534.734.9102%AXFOODTOTAL35.634.434.333.533.998%AXFOODFRANCHISE37.637.537.636.336.299%D&DDISCOUNT31.830.930.530.830.799%VIVOSTOCKHOLM40.740.141.036.241.297%BERGENDAHLDETALJIST32.732.732.331.233.4105%YESAROMA-APPLEWeighteddistribution(SFT)P12MP6MnovdecjanvsÄNGLAMARKTOTALSWEDEN95.998.297.098.098.0AXFOODTOTAL87.797.898.098.0100.0100%AXFOODFRANCHISE72.095.793.090.099.097%D&DDISCOUNT81.797.2100.0100.0100.099%VIVOSTOCKHOLM75.0100.0100.0100.0100.0102%BERGENDAHLDETALJIST100.0100.0100.0100.0100.0102%e.g.AromahashighshareswheredisplayedAnoteoncompetition CompetitiveResponseModeling Expectedcompetitiveresponse Sequenceofactions+theirNPVsdetermineoptimalstrategy Whichgameswillweplay? E.g.alwaysmatchcompetition’spromotiondepth E.g.neverdoin-storecouponsPossibleExplanations Consumervalueequation? Ispricepremiumtoohigh?DidweoverestimatedemandforAromaproducts?–mostlikelyOK;off-takehighwheredistributed+repurchaseratehigh Organizationalcapability Dowehaveenoughsalesrepcoverage?DoesYeshavepriorityinsalescycle? yes,butmanystoreownersarerejecting Commercialstrategy istrademarginrecommendedtoolow?Isvalueforcustomernotclearlydefined?Possibleexplanation:storeownersnotclearonaddedvalue–donotwishtoreplaceproducts,donothavemorespaceinstoreformoreproducts,anddonotwantcomplexityofmorecodesinsystemYesAromaLaunch Measurements Volume:dailyshipmentreportsbycustomer Sharesbyproductandcustomer:Weekly/MonthlyNielsendata SalesFundamentalsbyproductandcustomer:Weekly/MonthlyNielsendata Budgets:actualsversuscommitments Valuecontribution(Brand/Product/Country):monthlyBrandProfitEstimates(BPEs) howdowereflectnewforecastandwhatdowedo?BudgetTrackingPROCTER&GAMBLENORDICBudgetControlTotalMDA*SPENTBUDACTCOMSPENTvsBUD(MUSD)(MUSD)(MUSD)(MUSD)(%)Yes/FairyHD10018183535%Yes/FairyADW10028285555%Febreze10046469393%Swiffer1006464128128%TotalHOME40015615631145%Pringles10023234646% Criticalpartindecisionwhethertocontinuestrategy Launchbasedontighteconomics($/ml)–dowecutbudgetsorincreasethemifvolumesarenotcomingin?howsensitiveistheNPV? Expectfrontspendingduringlaunch,butpossibilitiesofcuttingQ4supportFINANCIALTRACKINGBrandProfitEstimates&Reconciliations explaindifferencevs.estimatebyvolume,mixeffect,budgets,exchangerates,andtradeterms availablebyproductandcountry consolidatedacrossGBUsandMDOsinSAPR/3tomakeourquarterlyreporttoWallStreet$M$/mlDelta%400040.00Mixeffect100.3%0.100.3%Volumeeffect1002.5%ExchangeRateeffect-10-0.3%-0.10-0.2%41002.5%40.000.0%$M$/mlDelta%372537.25MixEffect100.3%0.100.3%Volumeeffect1002.7%ExchangeRateeffect-10-0.3%-0.10-0.3%Customerbudgeteffect-50-1.3%-0.050.1%Consumerbudgeteffect-5-0.1%-0.010.0%37701.2%37.310.2%NetRealReconciliationNOSReconciliationACTIONSTEPS:E.g.SeptemberBPE Wearebelowvolumetarget. Salesfundamentalsshowthatwearelowondistribution(priceandsharewhereinstoreontarget). Repurchaserateishighamongconsumer–theproductworks. Only175ofestimated300displaysofAromahavebeensold–storeownersreluctanttotakeinnewproduct. BrandteammeetswithSalesteamstodiscusspossibleactions.ACTIONSTEPS:E.g.SeptemberBPE Wetakebackbudgetcommitmentswhollybasedonvolume,thismoneycanbemadeavailableforre-investment. Decision:distributionandyear-1volumeisvital.Weneedtore-deployfundsforadisplay-drive. Tryone-timeirresistibleofferwithnewtradeleafletspecifyingrationalebehindYesAroma. Effectoncontribution:highercustomermarketingbudgets%NOS,butreachcriticalvolumeandtrialinyear1. NewfinancialsarecommunicatedtoGBUviaBrandProfitEstimate.FullreconciliationsaresentbyFinance.PERFORMANCETRACKINGAccountabilityAccountabilityexamples: countryGM–valuecontributionandflow; externalrelations,organization GBUGM–P/L(incl.Production+logisticscosts, alloverheads),inventory marketplanner–forecastaccuracy,%availability brandteamleader–contribution,volume,shares, organization customerteamleader–volume,sales fundamentals,organizationPERFORMANCETRACKINGWork&DevelopmentPlans onceperyear–feedbackfrommanagers,directreports,colleagues Howhasworkplanbeendelivered?Howhaspersondevelopedorganization? Strengths+weaknesses–setdevelopmentplanwithmanager Basisforpromotiontimings+salarylevelPERFORMANCETRACKINGFIRMFY99/00FY00/01FY01/02FY02/03ConsumerSatisfaction&ReachSEK:US$ExchangeRate0.11720.10250.09540.0943NetSales@P&L($MM)XXXXXXXX(Indexvs.YearAgo@P/L)xxxxxxxx(Indexvs.YearAgo@ConstantRate)xxxxxxxxVolume(MMSU)XXXXXXXX(Indexvs.YearAgo)xxxxxxxxMDOValueFlow@P&LRate%%%MDOValueFlow@ConstantRate%%%%VolumeinTier1Customers%%Top4CategoriesValueShare(%)Diapers%%%Laundry%%%Haircare%%%Fempro%%%Top4CategoriesBusinessGainingShareL12M(%)%%%LocalS&A(%ofNOS)%1)%%%Productivity(NOS$MM/head)%%%%MDA(%ofNOS)%2)%%%MSA(%ofNOS)%%%%1-monthSalesPlanPerformance(meanabsolute%error)%%%%6-monthsSalesPlanCommitment(meanabsolute%error)%%%%MissedCases%%%%Receivables(daysoutstanding)xxxxxxxxDiditwork?YESCASE Doyouthinkyoucanrecognizeourstrategyinthestore? Havewesucceededinyouropinion? Whatcanbedonebetter? ResultsSUMMARY:STRATEGY&CONTROLSYSTEMSATP&GLecture1:MakingWinningStrategiesinaLargeCompanybothGloballyandLocallyProcessToMakeRightChoices(ChoiceCascade)FinancialFrameworkForValuation(PortfolioAnalysis,TSR)OrganisationWorkingtogethereffectively:MatrixStructureASystemofindividualaccountabilitySUMMARY:STRATEGY&CONTROLSYSTEMSATP&GLecture2:Applyingglobalstrategiessuccesfullyatlocallevelrequirescustomizationtoconsumer(preferences,shoppingbehavior,etc.)andcustomer(tradeconsolidation,profitability,collaborrativemode,etc.).Managementcontrolsystemsmusttrackallaspectsofadeployedstrategy,andoutputofsystemsmustbeactionable.QUESTIONS?Thankyou&goodluckInrecentyears,bothtotaldealvolumeandpropositionofn…….…….dealsincreasingstrongly