understand the organisation's position relative to the industry and market in which it operates. Eg. market share

Markets can be categorised into: customer markets and geographic markets—that is, geographic regions. It is important to consider geographic markets in both domestic and international regions, depending on to whom the organisation’s output is sold.

As customers are often responsible for the generation of profits obtained by an organisation, it is important to be able to collect and display data in order to show customer trends and profitability. Issues with customers can be identified, and target areas for growth can be pursued based on the findings.

makes it easier to identify any promising product areas that are either core to the organisation or the market or well positioned for growth.

i. Stars (large market share, high growth rate) ii. Cash cows (large market share, low growth rate) iii. Question markets (small market share, high growth rates) iv. Dogs (small market share low growth rate) v. No man's land insignificant market share and low growth rate)

The Boston Consulting Group (BCG) Matrix serves as a useful tool for assessing the organisation’s products in terms of market growth and its market share, making it easier to identify any promising product areas that are either core to the organisation or the market or well positioned for growth.

•Service channel: entities that provide necessary services to support the product as it moves through the sales channel and after purchase by the end user

The key question is: Who needs to sell to whom for your product to be sold to your end user?

Product channel: series of intermediaries who physically handle the product on its path from its producer to the end user e.g Australia Post

Compete on:
Product quality;
reliability;
Innovation
Product features/product range
Brand name
Service levels
Exclusive distribution channel

BIRDSFB

Value disciplines Treacy and Wiersema (1993) argue that there are three ways in which industry leaders can create greater value for their customers than their competitors:
• being operationally excellent, that is, providing superior and reliable products and services at competitive prices;
• achieving customer intimacy through knowledge about customers’ buying habits, to enable the organisation to target the customers individually; and
• having innovative product leadership, that is, products and services which are at the leading edge (Treacy & Wiersema 1993, pp. 84–93). OIL

Effective execution It is clear from observing practice that some organisations simply outperform, not because they have a superior product or service, but because they implement their strategy better than their competitors. This is consistent with Treacy and Wiersema’s (1994) argument for organisations having superior operational excellence in their generic strategy.

Low cost Be the least-cost producer (low cost leading in the market), and achieve high profit margins

OR Sell at low prices to obtain high market share Types of low cost strategies: • No frills products (Packaging kept very basic or where all extra feature of the product are not included) • simple product designs (Few feature of the product, but can meet basic customer needs) • process innovation to reduce cost, • economies of scale, • Low cost locations for operations ELSIN

Seek to be the lowest cost producer in the segment (cost focus) OR

Differentiate within the market segment (differentiation focus)

Narrow product line Narrow customer segment Narrow geographic segment

an organisation’s generic strategy may have to change over time.

drawbacks: Not all orgs have shareholders Not all companies have shares that can be measured stock values can fluctuate for no real reason

This approach involves much more complex measurement issues such as: CBA What measures are appropriate for each stakeholder group? How does the organisation balance performance between these measures? What does the organisation do when there is conflict between measures?

The choice of which sort of performance measure to use depends in the first instance on the performance that is desired.

The first improvement was based on the automation and digitisation of many areas of data collection. effective data collection

The second area of change has been the move from after-the-event reporting to real-time reporting and action

While we have the software and technology to provide this information rapidly, they are not enough to improve performance. When developing current or new systems, it is also essential to carefully plan and design effective data capture, analysis and storage. This takes a significant amount of time and effort, and poor implementation will hinder data collection and reporting. Common system design issues relating to suppliers, innovation and products/customers include: SIP suppliers—ensuring the ability to have multi-level coding of invoices; innovation—developing mechanisms for capturing hours spent on research and development; and products/customers—producing cross-referenced analyses (e.g. by segment, product, raw material inputs).

CARTLCVR
These measures need the following characteristics:

Validity (accuracy)
Reliability
Clarity
Low Cost
Timeliness
Accessibility
Controllability
Resistance to gaming and manipulation
Applicability or relevance

profit /reven and cost qualitative and quantitative trends

Performance measures need to be evaluated in context, and that context is typically the competitive business environment and industry within which the organisation competes.

An organisation can gather data to analyse through: Researching competitor information Talking to customers Talking to suppliers, agents, distributors, industry analysts Product enquiries e.g. mystery shoppers Purchasing & examining competitors products Talking to competitors employees Hiring people from competitors

SMART objectives should be used: Specific Measurable Achievable Realistic Timed/Timely

The BSC is organisation specific.

The balanced scorecard (BSC) approach to performance measurement and target setting (Kaplan and Norton, 1996) recognises that in order to achieve its strategic objectives, an organisation must achieve non-financial standards of performance in order to achieve its financial objectives over the longer term.

Kaplan and Norton argue that the BSC helps organizations to translate objectives into action. This happens because the BSC communicates the goals to the managers and help to improve their understanding and commitment. In order for this to happen:

• There must be an organizational strategy that can be expressed in an unambiguous way;
• It must be possible for measure of the vision and strategy to be clearly articulated and their necessary data be obtainable, measure should include both outcome measures (lagging indicators), and measures of action that create outcomes (leading indicator); and
• It must be possible to set targets for both leading and lagging indicators and assign responsibility for achieving those targets.

organized around four distinct perspectives which balance short-term and long-term performance, external and internal performance, financial and non-financial performance, and different stakeholder perspectives.

In order to use BSC for assessment of current performance, it is important to carefully identify the objectives that are important to each perspective. Kaplan and Norton identify the following four steps in designing and using the BSC:

1. Identify the organization’s mission and vision and break it down into objectives and goals;
2. Link the vision and objectives to individual performance;
   
   3. Create the plan or strategy based on the findings and set goals;
3. Obtain feedback and develop the strategy accordingly.

When creating goals it is important to keep the SMART checklist in mind:
• Specific – Goals should be both definable and easily recognized when success is realized;
• Measurable – An organization must be able to accurately and quantifiably measure the degree of accomplishment at any time throughout goal progression;
• Achievable – Goals should be achievable in terms of time, resources and skill-set;
• Relevant – The goals should be relevant to the organization and linked to what it is trying to achieve; and
• Timely – The length of time for goal completion should complement the organization’s strategy. The completion timeframe should be specific, and determined immediately in order for management to accurately monitor progress, and to make any change if goal progression is not as originally forecast.

For such innovation to occur, learning must take place at both the individual and the organisational level. How can the organisation learn in order to develop new ways of behaving? It was first proposed by Senge in 1990 that organisations should expand their capacity of thinking, communicating and leading, to allow all people within the organisation to learn together. Organisations need to be adaptive and flexible in order to not only manage and implement change, but to excel (Senge 1990). This was termed the learning organisation.

Identification of an organisation’s core values is imperative to attract the right people and manage the culture of the organisation so that its core values are exemplified through its behaviour. Often strategies of an organisation will alter; however, core values should remain at the forefront of the direction in order to keep alignment and consistency across the organisation.