Performance Institute Profit Maximization Strategy
•Transferir como PPTX, PDF•
0 gostou•607 visualizações
Recomendados
Recomendados
Mais conteúdo relacionado
Semelhante a Performance Institute Profit Maximization Strategy
Semelhante a Performance Institute Profit Maximization Strategy (20)
Mais de Try L. Muller, CPM, CUA
Último
Último (20)
Performance Institute Profit Maximization Strategy
- 1. Strategies for Profit Maximization and Improved Performance TRY MULLER MBA CAPTSTONE December 28, 2010 Try L. Muller Capstone Performance Institute
- 2. Objective & Content Objective:The purpose of this project report is to identify strategies for maximizing profits and formulate an action plan for executing them Content: Problem Statement & Storyboard Questions, Statements, Data Frames Conclusion I & Findings Supporting Data Conclusion II & Findings Supporting Data Solution & Deductive Argument Project Scope & Action Plan Project scope, Work Break Down, Work Plan , Force Field Analysis, Best Practices 12/28/2010 2
- 3. 12/28/2010 3 A. Problem Statement & Storyboard
- 4. Problem Statement & Storyboard Problem Statement:The Performance Institute (PI) has been suffering financially over the past four years. The inability to drive revenues and minimize costs has resulted in diminished financial performance an d has the organization on the brink of bankruptcy. 12/28/2010 4 Hypothesis and Supporting Questions An overextended program offering has diluted conference attendance and resulted in the company's inability to manage costs and maximize profits How have revenues changed over the past 12 quarters? How has conference attendance changed over the past 12 quarters? What is the increase in program offerings over the past 4 years? What percentages of quarterly revenues have been allocated to conference costs over the last 12 quarters? How does our pricing compare with competition in similar program centers?
- 5. Problem Statement & Storyboard 12/28/2010 5 Hypothesis and Supporting Statements An overextended program offering has diluted conference attendance and resulted in the company's inability to manage costs and maximize profits We have experienced a heavy decline in revenues over 8 quarters. Conference attendance has decreased at an increasing rate for 12 quarters. We have significantly increased our product offering over the past 4 years. Profits have declined and costs have simultaneously increased over 12 quarters. We overprice our competitors by at least $150 for similar program centers.
- 6. FRAME IStatement I: We have experienced a heavy decline in revenues over 8 quartersStatement Support: Revenues have declined 35% 12/28/2010 6 Data Source: Company financial records Approach: Quarterly revenue analysis Skills: Calculating percentages Accuracy: CRM database verified
- 7. 12/28/2010 7 FRAME IIStatement II: Conference attendance has decreased at an increasing rate over 12 quartersStatement Support: Avg. attendance per conference has declined by 42% Data Source: CRM database attendance records Approach: Quarterly attendance review Skills: Calculating percentages Accuracy: CRM database verified
- 8. 12/28/2010 8 FRAME IIIStatement III: We have significantly increased our product offering over the past 4 yearsStatement Support: We have nearly doubled our program offering since 2007 Data Source: Historical Records Approach: Counting increase in programs Skills: Calculating differences Accuracy: Difference between 2010 – 2007
- 9. 12/28/2010 9 FRAME IVStatement IV: We gave experienced a heavy decline in revenues over 8 quartersStatement Support: Profit margins have decreased between 25 -28% Data Source: Company Financial Records Approach: Profitability analysis Skills: Cost structure Accuracy: Team calculation
- 10. 12/28/2010 10 FRAME VStatement V: On avg. competitor prices beat ours by at least $150Statement Support: Competitor prices beat ours by an average of about $175 for similar program centers Data Source: Company Financial Records Approach: Competitive Intelligence Skills: Research Accuracy: Top 3 geographic competitors
- 11. 12/28/2010 11 B. Conclusion I & Findings
- 12. Conclusion I 12/28/2010 12 Attendance and revenue will improve with a consolidated product offering and margins will improve with better cost management. FINDINGS Revenue has an indirectly proportional relationship with the product offering. Attendance also has an indirectly proportional relationship with the product offering. Minimizing venue and travel costs will play a large role in maximizing profits.
- 13. FINDINGS: TrendsRevenue and conference attendance have an indirectly proportional relationship with the increased 12 quarter product offering 12/28/2010 13 Data Source: Company Financial Records Approach: Trend identification Skills: Trend Analysis Accuracy: CRM database
- 14. FINDINGS: Heavy venue and travel costs We will achieve greater profit margins if venue and travel costs are managed better(Cost in 000’s) 12/28/2010 14 Data Source: Company Financial Records Approach: Cost structure Skills: Cost analysis Accuracy: Team calculation
- 15. 12/28/2010 15 C. Conclusion II & Findings
- 16. Conclusion II 12/28/2010 16 Sales & Marketing will drive attendance with more competitive pricing, cold calling, and market visibility. FINDINGS Lack of brand awareness and pricing are leading reasons for potential customers not to attend a conference. This also implies that we should enter the market as a price competitor. Cold calling should be leverage more effectively to generate sales/revenue.
- 17. FINDINGS: Uncompetitive pricing and lack of brand awarenessCustomers are reluctant to attend our conferences due to a better pricing alternative and the lack of familiarity with our brand 12/28/2010 17 Data Source: Survey data Approach: Market survey Skills: Survey analysis Accuracy: Random sample (n > = 150)
- 18. FINDINGS: Cold calling closes a higher rate of sales An impressive 25% of cold calls are converted to sales 12/28/2010 18 Data Source: Sales & Marketing Approach: Interview Skills: Information gathering Accuracy: Review with sales & marketing
- 19. 12/28/2010 19 D. Solution & Deductive Argument
- 20. Solution 12/28/2010 20 Eliminate unprofitable programs and devise a cost management strategy that accounts for key cost drivers. Subsequently, price more competitively and make cold calling responsible for 50% of the sales process. Deductive Argument We will achieve greater profits and become more competitive with a leaner product and cost structure, as well as better brand awareness. We cannot compete if we commoditize our own product— it devalues our offering The overextended product offering exceeds our cost capacity, diminishes profits and results in poor financial performance This inhibits sales’ ability to price competitively for fear of losing profits even though customers want a lower price
- 21. 12/28/2010 21 E. Project Scope & Action Plan
- 22. Project Scope 12/28/2010 22 OBJECTIVE Improve profits by 5% over the next 6 quarters Business Planning Sales & Marketing Cost Management Market/ Competitive Intelligence Product Offering/ Planning Sales & Marketing Strategy Program Pricing Location/ Venue Travel costs Conference attendance
- 23. Work Break Down 12/28/2010 23 OBJECTIVE Improve profits by 5% over the next six quarters Analyze current cost structure Redefine sales & marketing approaches Strategic Planning Strategy Implementation and execution Group collaboration Identify key cost drivers Price point analysis Decide which programs to consolidate Project Participant/ task delegation Identify measures and monitor with BSC Identify unprofitable programs Create sales process for more cold calling Define cost management strategy Draft timeline and execution plan Identify areas where we can cut back spending Develop layout and content for PI newsletter Refine sales approach Brief executive team Refine newsletter content
- 24. Work Plan 12/28/2010 24
- 25. Measures and Owners 12/28/2010 25
- 26. Force Field Analysis 12/28/2010 26
Notas do Editor
- As everyone is aware, we have filed bankruptcy and there is a strategic imperative for us to find a way to drive financial performance—hence, the title. This presentation will provide an alternative, and hopefully a road map for how we can move forward as a company and become a high performing entity once again.
- This is just a quick overview of what you should expect to get out of the presentation. As I mentioned, the objective of this report is to help us commence a new strategic project for maximizing profits and eliminating costs. I will begin with my hypothesis as to why we are performing at a poor level and will support my speculation with some data. Then I will walk you through what I have deduce from analyzing this data. You will then have a chance to look at my solution and how the logic behind it. Lastly, you will see a project scope and action plan for how this project will commence. All of you are mentioned within that latter part of the presentation as means for us to establish a culture of accountability as we move through the process.
- The problem statement and storyboard is simply a way for you to see the orientation of my train of thought and validation for why I am approaching the problem in this way
- We have pretty much gone over the problem statement, but I will read so that we can officially be on the same page READ PROBLEM STATEMENTSubsequently, my hypothesis is as follows Read hypothesisThe following five questions have provided me with direction as to what kind of information I intended to gather when assessing the validity of my hypothesis Read supporting questions
- We are now looking at the supporting statements I am using to validate my developing argument Read supporting statementsWe will now review some validating data to graphically depict the dynamics of the problem
- This graph is directly linked to my first supporting statement Read supporting statementThe graph shows that revenues have declined 35% in just 8 quarters— once again, this is just data in isolation. In a little bit, we will see the real impact and implications of this data.
- This graph is directly linked to my second supporting statement Read supporting statementThis graph shows that avg. attendance per conference has declined by 42% over 12 quarters. This is pretty powerful in itself— hence, the power seeing how we have performed instead of simply looking at numbers
- The third supporting statement is Read supporting statementNow, this may or may not seem significant to you right now—if it does not, then it will very shortly.Just think, the product offering has doubled, but our financial performance has continued to dwindle.
- This is a powerful graphic in itself as you can see that our profit margins are a fraction of what they once were. Look at significant change over 8 quarters….
- This speaks directly to our competitiveness – we price higher than our competitors by an avg., roughly, of $175. So, let’s think about this, we are not a price competitor, but we have 181 programs that we offer— not really a formula for succes.
- I have come up with two conclusions that are explicitly supported by my findings via analysis of the data you just saw
- My first conclusion is as followsRead conclusionAnd why is this my conclusion? Because my findings are as follow Read findingsNow it’s time to see why I am thinking this way
- As I said before, the data from earlier becomes more powerful and has greater implications when analyzed beside one another.Disregard the revenue numbers on the left. Look at the lines and the trend they portray. As stated Read statement under “Findings” headingOur product offering seems to be diluting attendance and once we got past offering about 120 programs— I know this number because I put the graph together— we can see a sharp decline in revenuesThis graph has very direct implications for how we move forward from this state of performance
- Another powerful graph that is directly related to the cost structure of our programs…..Somewhere along the lines we must have forgotten that we have a decent conference center in which to run programs….Venue and travel costs are eating us alive— there is still one contingence and I am sure that some of you have thought about this: If we stop traveling programs will we also hurt conference attendance? That is something we will have to analyze moving forward.
- My first conclusion is as followsRead conclusionSubsequently, my findings are as follows Read findings
- This is part of the double bottom line – listening to your customers because they will tell you what you’re doing wrongWe don’t have any brand awareness and because we have competitors in our immediate geographic space, it is imperative that we price competitively. Right? We really can’t control budgets and program inaccuracy can be mitigate by better research— and we have A LOT of power of the two biggest issues: brand awareness and pricing
- We do not want to be an email marketing company— why? Because our marketing virals hit the same people over and over again and we haven’t had new lists in years. We do not want to be spammed out or blocked…. We must be more strategic with that type of messagingBut, as we see, there is some clear opportunity with cold calling— this is what sales is all about, getting on the phone…. Go get the customer, don’t wait for the customer to come to us. That cold calling conversion rate means that we need to redefine our sales process. That is an uncanny conversion rate for COLD CALLING. Imagine the opportunity we’re missing our on if our sales process is skewed towards sending out marketing messages.
- So, I have come up with a fairly complex, but achievable solution
- Read solutionHere is my argument for this solution— please keep in mind the data I just shared with you Read all boxes of deductive argumentDoes this make sense? This is a valid argument because I have provided you with the data and information that shows you the logic behind reaching such a solution.
- Now we are going to look more at the action plan side of things… we have a strategy, what action do we take now?
- Here is the project scope….It starts with the SMART objective— specific, measureable, agreed-to, realistic, time framedThen there is our 3 areas from which we derive our 6 issuesConference attendance is the last component because it is the foundation of everything we will do
- Here is a work break down of how we will proceed with carrying out the strategy. As you look over it, you will see where you fit into the strategic framework.
- This provides you some direct context of where your accountability is within this process. Most of you have performed these work elements to some extent— this is just formalizing the roles and letting everyone see what will be expected of them moving forward. Everyone is a contributed and an enabler of this strategy.
- It is important to measure the things that will keep us on the shortest path to success. Of course we will measure other things, but these are the core measures and KPI’s that will keep us aligned with the ultimate goal. There is not an individual owner of any of these measure. Once we start to understand the activities going into the execution of this plan we will then designate sub-level measures for which there will be individual owners.
- Lastly, we need to take a look at what could possibly inhibit us from moving forward with this strategy and what capabilities we can leverage to ensure successful deployment and execution. On the left side I have listed some things that we will have to consider moving forward Read the “worst scenarios” Most of you are familiar with the worst because we have obviously experienced the worst to get where we are today.On the right side I have listed the capabilities that will enable us to carry out this plan Read the “best scenarios”I think the biggest thing on this side will be minimizing the density of programs surrounding our marquee events to ensure that smaller events do not cannibalize those revenues – everything will have to be contingent on are greatest revenue generators. ConclusionLook, I know it has been rough over the past couple of years but we have a great opportunity to turn things around. It will take a concerted effort and lots of collaboration across divisions to make this happen. The key to success will be transparency, communication, and accountability. This is a very achievable project that will only increase in complexity because sustaining performance is much harder than improving performance. However, I am confident that everyone will buy-in to this plan and we can achieve our short-term and long-term goals.