QUESTION 1

We have a written strategy but struggle with finding a solution to defend our business against intense competition. We have a defined value proposition but lack innovation and the necessary investments to sustain our competitive advantages.

We have a general strategy but it has changed multiple times and does not really describe competitive advantages. Competition is intense, customers don't seem to have much loyalty, and we can't afford to make any strategic investments.

We have a well defined business strategy, which has focused us on sustainable competitive advantages that support our value proposition. We continue to invest in growth but our markets are not well defined and are unpredictable.

We have a clearly defined business strategy, sustainable competitive advantage(s), growing target markets, and a competitive value proposition. We proactively plan and execute prioritized projects to drive growth and profitability.

QUESTION 2

Our revenue has increased 3 to 5% per year for the past 3 years and our EBITDA is up 5 to 8% per year during the same time frame. We expect next year to be a strong growth year.

Our revenue is up 1 to 2% per year over the past 3 years and EBITDA is flat to up 5% in the same time period. We expect next year to be a little better than the last 3 years.

Our revenue has increased 6 to 8% every year for the past 3 years and EBITDA had increased 8 to 10% per year. We expect next year to be a great year.

Our revenue is down 3 to 5% each year for the past three years and our EBITDA is down 8 to 10% per year. The outlook for next year shows no improvement.

QUESTION 3

Our cost of goods has increased over the last 3 years but OPEX has remained flat as a percentage of revenue. Revenue is flat and we are constantly cutting strategic investments to stay profitable.

In the prior 3 years our cost of goods as well as our OPEX has decreased 1-5% per year as a percentage of revenue. We have been able to grow 2 to 3% per year and are able to invest enough to sustain our competitive position.

Our cost of goods and OPEX as a percentage of revenue has decreased by more than 5% over the past 3 years. This has provided us the resources to invest in growth opportunities. We are growing at a rate of 6% or more every year.

Our cost of goods and our OPEX has increased over the past 3 years as a percentage of revenue. Revenue is down over the same time period. We don't have resources to invest in strategic projects.

QUESTION 4

We have a 3 year business planning process driven by a clear strategy and defined execution methods and responsibilities for business development projects. Annual reviews and updates are made to the strategy and the plan.

Annual budgets are created and followed if business conditions permit. The business planning process is based on management making decisions driven by last years performance and adding some factor for growth. There is no plan for how to actually achieve these growth objectives.

We have no defined business planning process or annual budget. Management has goals that are passed down through the organization but we don't have any input to how they are established or who is responsible for execution.

We have a 3 year business planning process driven by a clear strategy. However, we do not have a structured method for planning and executing business development projects. Adjustments to the plan are made as needed.

QUESTION 5

The culture is focused on customer satisfaction and has a material impact on the performance of the business, creating a significant competitive advantage. Management is proactive with an open door policy, fostering strong employee engagement, commitment, and loyalty.

The existing culture is a significant challenge with distrust, resistance to change, and retention issues. There is a disconnect between management and employee expectations with general indifference toward change initiatives.

Our culture seems to vary by department with no clear company priorities defined by management. We don't have a lot of teamwork or collaboration and communications seem to be one way.

Management takes an active role in developing the culture, leading by example and communicating expectations clearly. Employees are independent, motivated, and openly collaborate.

QUESTION 6

We don’t have a good understanding of our competitors and we do not use any form of performance benchmarking. We make plans and budgets according to last years results.

We use competitive, product, and functional benchmarking to assess our performance. We don't currently use process/sub process benchmarking tools, but plan to in the future.

We use prior years sales and business metrics to benchmark our performance. We try to benchmark our closest competitors based on their published product information and what we can learn about their operations from third parties.

We utilize 4 types of performance benchmarking; functional, process/sub process, product, and competitive. This allows us to constantly adapt and improve our capabilities to optimize business performance.

QUESTION 7

We identify key talent/leaders, and have assessment processes company wide to define talent development needs. We have established training, coaching, and mentoring capabilities as tools to develop our talent based on the assessments. We have a succession plan for top management only.

We have identified key talent and potential leaders within the organization. We do have a process to assess their capabilities and plan to evaluate development tools for training, coaching, and continued education, but do not have formalized programs in place.

We identify, assess, and develop key talent through investments in coaching, training, and continued education. We utilize cross functional team assignments to plan and develop top performers, creating a strong pipeline based on our succession planning process.

We have no standardized process of identifying high potential employees. Currently we do not have a specific leadership development plan, but do reward our top performers.

QUESTION 8

We have sustained a 6-8% increase in revenue over the past 3 years and EBITDA has grown 8-10% per year. We estimate the value of the business will be up 25-30% over the next 3 years.

Our revenues are declining and our markets are more and more unpredictable. EBITDA has been down for the past 3 years. At this rate the business value is declining by 10% per year.

Our markets are stagnant and there are many new competitors. Revenue and EBITDA have been flat for the past 3 years. At this level of performance, we will be fortunate if the business is worth the same in 3 years as it is now.

The business has been performing well. Our revenue and EBITDA is increasing 2-5% per year. In 3 years we expect the value of the business to be up 10-15% compared to today's estimated valuation.

QUESTION 9

We have no pricing power and struggle with passing costs on to customers. Our customer retention rate is very low, and we have a hard time introducing new products to the market.

We can usually pass 50 to 75% of our cost increases on to customers. We have a strong retention rate with target customers and we have successfully expanded our product lines with positive customer acceptance. Over 10% of revenue is from new products introduced in the past 3 years.

We have limited pricing power and can generally only pass on 25-35% of cost increases to customers. Our target customers retention is low and only a small portion of our new product introductions are successful.

We have strong pricing power and can usually pass all of our cost increases on to customers. Our target customer retention rate is 95% or higher. Over the last 3 years we have reduced COGS as a percentage of revenue and 20% of our revenue is generated by new products.

QUESTION 10

Our strategy requires agility, but there is significant resistance to change and general indifference throughout the organization. Turnover is high. The culture prevents us from executing the strategies necessary for us to grow the business.

Our culture is loosely aligned with our strategy but many of our employees are opposed to change initiatives. There is little commitment or teamwork within the organization and management seems to constantly dictate new strategic priorities. Our culture is not an asset to the business at this point.

Our strategy is driven by constant technology innovations and fast moving competitors. Our employees are committed to the business strategy and adapt whenever necessary. The culture is considered an asset to the business but we could perform better if there were more new ideas generated within the organization.

Our employees are fully committed to the business strategy. They are quick to adapt and pivot, enabling us to execute competitive advantages quickly. Our teams are engaged and driven to support the strategic objectives of the business. Our culture is a true asset and has a significant impact on the business.

Strategy and Business Planning Assessment

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