BUSINESS STRATEGY REPORT – FITBIT
THE BRIEF
The business should be listed on the London (FTSE) or New York stock exchanges.
Where the target company has multiple listings, please state the details of this at the top of your
Main report and include with these details the ISIN number for your company’s listing.
The chosen business should be facing competitive disadvantages and/or serious strategic
issues. If you choose a company which is not facing serious strategic issues (i.e. one which
dominates its sector without other strategic problems, or is otherwise doing well), you will not be
able to generate insightful strategic recommendations.
The company needs to have a clear like-for-like competitor set offering as far as possible like for
like comparable products: If this clear competitor set is absent, then a competitive analysis in this
context is impossible.
If your target company is in a global marketplace then you must do your analysis with reference to
this global marketplace. The reason for this is because it is highly likely that the global economies
of scope and scale will affect the competitive position of your target company in any national
market.
Research current strategies using online or hard copy sources. Please see the video guides to all
business information sources on the site. Your report should include information on the sector, the
competitors, the consumer and the company.
SOME NOTES ON REPORT WRITING (from teacher)
1.0 EXECUTIVE SUMMARY
1.1 Introduction
I suggest you use an Executive Summary. In business life you will find that people do not have the
time to read extensive reports. They will read a short summary and then scan the main report &
any appendices for points of interest.
This means you have to ‘sell’ your report on the Executive Summary.
1.2 Content
The Executive Summary should include a summary of the ‘brief’, that is the objective(s) of the
report and any special issues that you have been asked to investigate.
If the Report involves research, you should identify your methodology briefly. Don’t discuss it, just
state it. If it involved telephone interviews or on-line research, say so. If it involves research on
online and physical published sources, say so.
Give it an appropriate heading such as Research Method.
Identify your main research findings. List them using numbering or bullet points. Keep your
findings brief and totally relevant to the brief. Again, give this section a heading.
Identify main recommendations. List them briefly & succinctly.
If there are any other points that need action, list them as say, Key Actions Needed.
2.0 STRUCTURE
2.1 Style
Your report should be:
Easy to read
Lucid, well written, with no typographical errors
Visibly appealing
Crisply worded
Well structured with numbered sections
Use white space and avoid visually intense & long paragraphs. Separate paragraphs with a space.
Use bullet points as above to identify a number of issues or topics and then address them one at
a time. This enables the reader to see your structure at a glance. No more than 5 bullet points in a
group.
Keep your paragraphs short and crisp. Don’t drift away from your key argument. Don’t use ten
words where five will do.
2.2 Numbering
You can use mathematical numbers in your text as this is a Business Report. It is not an essay.
Structure your report sensibly. For example, 1.2 is acceptable but 1.2.1 is unnecessary. Make sure
your numbering is consistent throughout the Report.
2.3 Excessive detail
Give numbers in the main body of the report if they are necessary to follow the argument you are
making. If they are merely supporting data, put them in the appendices (so “have to have” in the
report, “nice to have” in the appendices).
Don’t give more detailed information than is necessary. In giving numerical data you may be
advised to round large numbers to make them easier to absorb.
For example:
2006 Sales £3,768,789.45 is too complex.
2006 Sales £3,769k. or £3.8m. may be much clearer, where:
£k. = Thousand
£m. = Million
Make sure that you report the sector, market or demand statistics appropriately. For instance, if
you are discussing the mobile phone market, if you report it in financial terms, that will not
represent realistically the split by usage between smartphones and dumbphones. It would be
better to report this market, for instance, in terms of units, and also in terms of revenue.
2.4 Using tables
It is clearer to use tables or charts to give information. Don’t add more information (numerical
data) than is necessary to illustrate your point. You can provide the full table as an Appendix.
3.0 COMMENTS RELATING TO THE BUSINESS STRATEGY REPORT
3.1 General points
Don’t lose sight of the purpose of this coursework. It is to show your understanding and real life
application of strategy analysis and strategy formulation.
Introduce the frameworks, tools, concepts etc as you use them. We need to see that you
understand them but we don’t need to see a description of, for example, the meaning of Porter’s
5 forces or Ansoff’s matrix. We do need to see you apply them (if you feel they are appropriate).
There is nothing to be gained by including analysis tools just for the sake of including them. This
will lose marks.
You should not need to describe any strategy jargon or methodologies.
3.2 The Word Count
Tables, charts, contents page & appendices are not part of the 3500 word count.
Markers have been asked by the university to take off marks if the word count is exceeded. This is
also useful discipline for your business /professional life.
3.3 Relevance
Be ruthless in looking at your work to see if every paragraph is relevant. Does it add value or is it
irrelevant ‘padding’. Are you using strategy theories, concepts, methods etc that do not have
much to add to your analysis? If so, cut them out.
Report – Fitbit
• Structure it clearly
• Short paragraphs
• White space
• Number each section
• Use bullets sparingly, maybe to introduce a number of points briefly before going on to describe
them
• Don’t use 20 words if you can say it in 10
• Make sure your points are clear
• Please present the significance of the data, with the data as a secondary issue
• After each diagram or chart, please make sure you follow this with an interpretation
• Data only if relevant
• Put tables and charts in the main body of the report if they are crucial for the reader to follow the
argument. Otherwise, they belong in the appendices
STRATEGIC ANALYSIS
Your analysis should provide the answers to the following questions:
• What competitive and strategic issues have led to the current market structure?
• What comparative: strengths, capabilities, access to resources and/or experience (to include
economies of scale or scope) will enable the company to mitigate these effects?
• Given this market structure, how do the next 3-5 years look for the company?
• Industry analysis, analysis of sector, competitors, market shares (size and growth over time),
consumers
• What are the implications of this competitive structure in the market?
• Profile of the company
• Compare what the company does with their stated organisational Purpose (or if not publicly
stated, then give your understanding of its purpose), ie compare what they say with what they
do
• The company competences and access to resources that give it competitive advantage
ANALYSIS OF EXISTING STRATEGIES
Existing strategies should be identified, as published (using newspaper reports (Nexis) and other
reports (Orbis, Fame, ThompsonOneBanker, Mintel), company websites, Chairman’s Report,
Financial results, statements to the press, your observations…)
PROPOSE STRATEGIES FOR NEXT 5 YEARS at corporate, strategic business stream &
functional levels:
•Use strategy ‘toolbox’ widely
•Identify strategic options at the business stream (SBU) level, (preferably using the Strategic
Direction Matrix)
•If you are looking at a business stream, you will need to take the wider company into account
when making your recommendations (ie what will be the impact on the rest of the company
activities of your recommendations
•You will need to make recommendations for 3 time periods:
– Short term
– Medium term
– Longer term
Within each of the those time periods, you need to give a full discussion of each strategy, and in
relation to the other strategies that you are proposing, and within each time period, you need to
rank proposed strategies in terms of importance
•Where relevant, use one or more of the portfolio methodologies (notably BCG &/or ADL) to
evaluate & rank SBU level strategies; then develop Corporate Strategies (the ‘bigger’ picture’) &
revise SBU strategies given ‘real world’ constraints…for instance, how much money does the
company have to make changes?
•Propose some important functional level strategies critical to successful implementation
Comment critically on how your proposed strategies differ from those being implemented by the
company and on the implications of these differences
STRATEGY IMPLEMENTATION
-Develop outline plans for implementing your strategies.
-Include the main actions that are needed, and the timings
-The point of developing strategy implementation is because implementation is the “acid test” of
the robustness of your strategic ideas for the company
-This was the weakest section of last year’s reports. We want you to give this significant
emphasis!
COMPETITIVE ADVANTAGE: IDENTIFYING KEY SUCCESS FACTORS
•What are the things that drive profitability in an industry? For instance the supermarket sector
must have very sophisticated supply chains to keep up with competition, and this is why the link
up between Morrison and Ocado is such a breakthrough for Morrison: because Morrison now
have national coverage, and because Ocado is very good at supply chain operations
•What is the basis of competition? (BoC)
On what basis does the consumer decide to buy your product? Or your competitor’s?
Key Success factors (KSFs):
Given the BoC, what do you (and competitors have to do to be competitively successful?
USING PROFITABILITY
•ROC = Return on Capital Employed = PBIT % CE
•ROCE measures how effectively the firm manages the all money coming into the firm
•CE = Fixed Assets + Working capital
•WC = Cash + Inventory (stocks) +(debtors) – (creditors)
Analysis of ROCE shows how much return has changed, and how much capital employed has
changed
So a drop in ROCE CAN mean numbers of different things, which is why you need to look at what
has happened to both parts of ROCE. It CAN mean that the return has dropped. Or it CAN mean
that the capital base has increased. Or it CAN mean that the capital base has dropped, but that
the return has dropped even more
ROCE yields insight when viewed over time, or in comparison against competitors
BUSINESS AND FINANCIAL OBJECTIVES (some examples of possible objective types)
the portfolio of activities
•Position in sectors
•Sustainable competitive advantage
•Technology stance
•Human resources
•Ownership /dividend policy
Can you find out the company’s objectives by researching their public statements? Or look at
what they do?
FINANCIAL OBJECTIVES (SOME EXAMPLES)
•Sales Rapid growth at 25% pa to £80m
•Earnings Maintain high margins in 8-12% PBIT range
throughout; at best, 14% in year 5
•Assets Grow asset base but more slowly than sales; halve
working capital as % sales by year 5; hold fixed
assets at current % of sales
•ROC Growth of 15% by year 3, 25% by year 5
•Cash Reduce borrowings by 50% to £xxm by focusing on
cash generation
THE BASICS OF STRATEGIC ANALYSIS
EXTERNAL ENVIRONMENT
•Macro-environment facing all firms
-Political trends
-Economic trends
-Socio-cultural & demographic trends
-Technological trends
-(Environmental)
-(Legal)
PLEASE DO NOT “TICK THESE OFF”, PLEASE ONLY USE THOSE CRITERIA THAT ARE
RELEVANT
Please make sure you draw conclusions. What does it imply for Company x? Which are
important? Which are less? How do they work in the mix with one another? What is the overall
picture?
Competitive environment
-How have market shares moved over time for company x and its competitors?
-How has competitive power moved over recent years?
-Have there been any changes in the way consumers behave? Demand?
-Has the basis of competition changed in the sector?
-Has access to distribution changed for the sector?
-Have there been any major technological developments that have changed the shape of the
sector?
Make sure you draw conclusions? What does it imply for Company x? Which are important?
Which are less? How do they work in the mix with one another? What is the overall picture?
STRATEGIC OPTIONS (A FRAMEWORK)
Two important groups:
•Environment-based (EXTERNAL)
•Generic strategies
•Market options
•Expansion strategies
•Resource-based (INTERNAL)
•Value chain
•Resources /competences
•Cost reduction strategies
This is a very useful toolbox for identifying strategies!
STRATEGIC BUSINESS UNITS: Business Streams (SBUs)
Business stream definition: a product/market segment (for instance Marks and Spencer clothing)
-These have common customer groups, competitors & geography
-This will have competitors in that business stream ‘market’
-It is a discrete ‘unit’ or business, often managed separately
-It theoretically could be sold without the whole business being sold
A business stream is a part of the larger business… about which strategic decisions can be
made independently …of other parts of the business
STRATEGY DIRECTION FOR EACH BUSINESS STREAM (SBU)
•These broad (outline) strategies are sketched out for each BUSINESS STREAM (SBU) assuming
that resources are sufficient to implement all strategies for all business streams (SBU’s)
•Only later do we prioritise between Business streams (SBUs) using portfolio approaches (if this is
relevant to your analysis)
So…
The idea of a portfolio of SBUs/Business streams is what comprises Corporate Strategy
•Corporate Strategy is the ‘big’ decisions made by the CEO & Board and which may involve
issues like the following:
-Choosing SBUs/business streams to enter or exit
-Often this is about diversification, withdrawals or moving along the value chain (vertical
integration)
-Deciding the level of resources to be allocated to each SBU
EVALUATION OF STRATEGIC OPTIONS & CHOICE of STRATEGY (Portfolio approaches)
1. Determining strategic position, (using a portfolio matrix), depending on whether this is relevant
to your analysis
2. The choice of strategy
3. Real world: resource constraints
4.So we have to prioritise between SBUs
5.Where are we going to invest? Maintain? Reduce funding? Divest?
These are corporate decisions on resources
PORTFOLIO ANALYSIS EXAMPLE
THE CHOICE OF STRATEGY: PULLING IT ALL TOGETHER
So far we have:
-Analysis at the business stream level
•identified strategic options (based on no constraints)
•selected strategies in outline showing the reasons (eg Strategic Direction Matrix)
-Used one or more portfolio matrices as ‘aids to decision-making’, if this is relevant
Corporate Strategy
•Now if we are looking at multiple business streams, we need to:
-Look at the likely outcomes of our proposals in terms of financial and strategic performance
–
We need to review outcomes against corporate financial objectives or aspirations
•any gaps?
•if so, can it be filled by other means?
(eg. M&A, alliances, licencing, diversification?)
THE CHOICE OF STRATEGY: Reconciling SBU and Corporate Strategy (where relevant to
you)
•So… with finite (limited) resources:
-must decide between SBUs & level of resource allocated to each one
Corporate Strategies:
-Decisions /direction at broadest, most strategic level
-identifies priorities between SBUs
-confirms objectives/goals, both ‘financial’ & ‘strategic’
-identifies main programmes /steps /moves together with dates & responsibilities (‘action plans’)
•Iterative process (SBU /Corporate /SBU)
•Then… Functional strategies
•can apply at Corporate & /or SBU levels…What will be the Marketing
plan that will support this proposal activity? Operations? HR? Etcetera
THE CHOICE OF STRATEGY: Where you are looking at a single business stream within a
wider organisation
•You will generate business stream strategies, and also functional strategies
•You will then need to look at the wider business and
interpret what the implications are of your proposal to this
•So for instance, if you are making proposals for M&S clothing, and if you propose that they
reduce the space for retailing clothes, then you must say what M&S should do with the spare
space, and what the implications
would be for the other business streams of doing this. If you suggest major
investment, you must talk about which business streams this need to come
from, and what the implications would be as a result of this
IMPLEMENTING STRATEGY: INTRODUCTION
6 major areas to consider:
1.Programming the work: what can happen simultaneously, what needs to happen sequentially
2.Organisational design and culture: this will be a block to your recommendations
3.Identify key personnel
4.Resource allocations (time, money, human resources, other resources such as technology)
5.Need to change behaviour in order to implement
INTERPRETING MARKS FOR THE MAIN REPORT
Mar
k
Classifi
cation
Description
90-1
00
Exception
al 1st
Very strong evidence of critical thinking. Excellent and clearly presented
discussion of strategic and competitive issues affecting the company.
Excellent evidence of critical thinking relating to the link between
strategic analysis and recommendations. Excellent understanding of the
hierarchy of risks and weaknesses relating to these proposed strategies.
Excellent evidence of critical thinking demonstrated by an understanding
of the potential problems in implementation and measures developed to
mitigate these.
Excellent and wide research, clearly presented through appropriate
diagrams and charts and discussion. Thorough interpretation of
diagrams and charts. Excellent use of analytical techniques. Absence of
irrelevant techniques or data analysis being used. Very clear writing, well
“signposted”. No or minimal editing or mistakes in clarity. Very clear
implementation plan, detailed and well presented GANTT chart.
Evidence of wide and independent thought.
80-8
9
Outstandin
g 1st
Strong evidence of critical thinking. Excellent and clearly presented
discussion of strategic and competitive issues affecting the company.
Strong evidence of critical thinking relating to the link between strategic
analysis and recommendations. Excellent understanding of the hierarchy
of risks and weaknesses relating to these proposed strategies. Strong
evidence of critical thinking demonstrated by an understanding of the
potential problems in implementation and measures developed to
mitigate these.
Excellent and wide research, clearly presented through appropriate
diagrams and charts and discussion. Thorough interpretation of diagrams
and charts. Excellent use of analytical techniques. Absence of irrelevant
techniques or data analysis being used. Very clear writing, well
“signposted”. No or minimal editing or mistakes in clarity. Very clear
implementation plan and GANTT chart.
Evidence of wide and independent thought.
70-7
9
Clear 1st Good evidence of critical thinking. Clearly presented and well argued
discussion of strategic and competitive issues affecting the company.
Good evidence of critical thinking relating to the link between strategic
analysis and recommendations. Strong understanding of the hierarchy of
risks and weaknesses relating to these proposed strategies. Strong
evidence of critical thinking demonstrated by an understanding of the
potential problems in implementation and measures developed to
mitigate these.
Excellent and wide research, clearly presented through appropriate
diagrams and charts and discussion. Thorough interpretation of diagrams
and charts. Excellent use of analytical techniques. Absence of irrelevant
techniques or data analysis being used. Very clear writing, well
“signposted”. No or minimal editing or mistakes in clarity. Clear
implementation plan and GANTT chart.
Evidence of wide and independent thought.
60-6
9
2.1 Some critical thinking shown. Clearly presented discussion of strategic
and competitive issues affecting the company. Good evidence of critical
thinking relating to the link between strategic analysis and
recommendations. Good understanding of the hierarchy of risks and
weaknesses relating to these proposed strategies. Reasonable evidence
of the understanding of the potential problems in implementation and
measures developed to mitigate these.
Wide research, clearly presented through appropriate diagrams and charts
and discussion. Good interpretation of diagrams and charts. Good use of
analytical techniques. Absence of irrelevant techniques or data analysis
being used. Very clear writing, well “signposted”. Mostly good editing,
minimal or no mistakes in clarity. Clear implementation plan and GANTT
chart.
50-5
9
2.2 Patchy critical thinking shown. Clearly presented discussion of strategic
and competitive issues affecting the company. Reasonably clear
discussion relating to the link between strategic analysis and
recommendations. Patchy understanding of the hierarchy of risks and
weaknesses relating to these proposed strategies. Patchy evidence of
the understanding of the potential problems in implementation and
measures developed to mitigate these.
Moderately good research, presented through appropriate diagrams and
charts that are mostly well reproduced, titled and attributed properly .
Mostly complete and intelligent interpretation of diagrams and charts.
Reasonably good use of analytical techniques. Minimal presence of
irrelevant techniques or data analysis being used. Reasonably clear
writing, not strongly “signposted” or organised. Moderately good editing,
showing some mistakes in clarity. Patchy implementation plan, and
GANTT chart that is missing elements, and which has not been clearly
thought through and linked to the strategic analysis.
40-4
9
3rd Minimal critical thinking shown. Inconsistently presented discussion of
strategic and competitive issues affecting the company. Patchy
discussion relating to the link between strategic analysis and
recommendations. Patchy or absent understanding of the hierarchy of
risks and weaknesses relating to these proposed strategies. Patchy or
absent evidence of the understanding of the potential problems in
implementation and measures developed to mitigate these.
Inconsistent research, presented through mostly appropriate diagrams and
charts that are mostly not well reproduced, titled and attributed properly .
Patchy or absent interpretation of diagrams and charts. Uncritical use of
analytical techniques. Some presence of irrelevant techniques and data
analysis being used. Reasonably clear writing, not strongly “signposted” or
organised. Somewhat poor editing, showing some mistakes in clarity.
Patchy implementation plan, and GANTT chart that is missing elements,
and which has not been clearly thought through and linked to the strategic
analysis.
35-3
9
Marginal
Fail
No critical thinking shown. Poorly presented discussion of strategic and
competitive issues affecting the company. Poor or absent discussion
relating to the link between strategic analysis and recommendations.
Poor or absent understanding of the hierarchy of risks and weaknesses
relating to these proposed strategies. Poor or absent evidence of the
understanding of the potential problems in implementation and
measures developed to mitigate these.
Inadequate research, presented through inappropriate diagrams and
charts that are mostly not well reproduced, titled and attributed properly.
Poor or absent interpretation of diagrams and charts. Uncritical use of
analytical techniques. Presence of irrelevant techniques and data analysis
being used. Poor clarity of writing, poorly “signposted” and organised. Poor
editing. Poor implementation plan, and GANTT chart that is missing
elements, and which has not been clearly thought through and linked to
the strategic analysis.
0-34 Absolute
Fail
No critical thinking shown. Poorly presented discussion of strategic and
competitive issues affecting the company. Poor or absent discussion
relating to the link between strategic analysis and recommendations.
Poor or absent understanding of the hierarchy of risks and weaknesses
relating to these proposed strategies. Poor or absent evidence of the
understanding of the potential problems in implementation and
measures developed to mitigate these.
Inadequate or very inadequate research, presented through inappropriate
diagrams and charts that are poorly reproduced, titled or attributed. Poor
or absent interpretation of diagrams and charts. Uncritical and
inappropriate use of analytical techniques. Presence of irrelevant
techniques and data analysis being used. Poor implementation plan that
may have elements missing, a GANTT chart that is missing elements and
which has not been clearly thought through and linked to the strategic
analysis.
Incoherent writing and presentation, showing evidence of a lack of
thought relating to the layout of the work. Poor editing.