5. (Ex 7) CEOs Strategic Plan Flashcards
When was CEO strategic plan made?
Oct 21 by CEO Felicity Darchon
When was the strategic plan announced?
2017
What did the strategic plan set out?
Company aspirations for KPI’s
- Annual growth in revenue by 4%
- Annual gross profit increase of at least £250k/yr
- Generating +ve net cash flow after all operating, investing and financing activities
How did WWL aim to achieve their strategic plan’?
- To innovate the products, processes and service offering
- Whilst maintaining our financial health, and addressing risks in the competitive environment
How has the economy impacted their strategic plan
In principle nothing has changed in terms of what WWL aim to achieve
But dramatic events of last 2 years have severely impacted the business
Has meant LT plans can sometimes be rendered meaningless
WWL has emerged from recent challenges more capable than ever, thanks to resilience of its people
What were the expectations for revenue 4 years ago?
Expectations were that the market demand would remain flat from 2017 - 2022
But due to emphasis on high-quality wool-tased carpets and mix of client type, WWL expected better-than-average growth of 4%
How has revenue growth compared to expectations?
4% revenue growth annually was more challenging than anticipated
Significantly below revenue growth aims in 2020 and 2021
What are the current indications about the market growth from 2022 to 2027?
2% growth per annum
Based on buoyant property market and favourable economic conditions (both of which are v difficult to predict)
How is WWL going to achieve their 2022 revenue goal?
Need best-case improvement in business env, with gains in business confidence and consumer confidence
This would translate into resurgent property market
But all relies on wider economic and political stability
Whilst a faster recovery scenario is plausible, also need to be prepared for a slower recovery scenario
What does WWL need to do going forwards to achieve LT objectives for revenue growth?
Need to ensure the business continues to be agile in a dynamic and competitive env
Need to create profitable, cash generating business
Need to recognise the importance of key stakeholders: employees, clients and suppliers
What is WWL’s strategy to achieve their 2022 revenue goal?
Continue to seek opportunities for growth
Ensure that processes are efficient and profitable
Must manage risks and put mitigation plans in place
What are their 4 innovation focuses?
Product innovation
Process innovation
Service innovation
Innovation in people
Describe how the company carries out product innovation
Continue to demonstrate innovative skills through ongoing new design work
Evidenced by award winning products and installations
PP carpets venture = further evidence of product innovation. Taken into new market segment
Continuing to explore innovative product development to stay ahead of rivals
What is WWL’s focus for process innovation?
Critical aspect of their competitive advantage and reputation = ability to fulfil orders on time
E.g. often purchasers have booked a fitter and may need to vacate their homes. So any delays are v frustrating
WWL have invested in sophisticated cutting and logistics process (carpet is manufactured, cut to size and stored in anticipation of set delivery date)
Offer high speed delivery, helps retain existing clients without having to compete aggressively on price and win new clients
Carpet manufacturing technology is evolving all the time, so needs constant investment to stay ahead of rivals
How was service innovation improved?
In 2019-2020, attempted to enhance loyalty of customers by solving their problems, so invested in warehousing and logistics infrastructure
Good move, as in 2021 expanded warehousing capacity and enabled WWL to store products for clients until they needed it
Clients benefit as holding less inventory, reduces with WC needs & frees up cash
By enhancing cutting technology, clients have less waste, improving their margins and so enhances client retention
How has investment in cutting technology aided WWL?
Has improved their client relations as means less wastage , so improves client margins, and enhances client retention
How does WWL seek to be different in terms of innovation in people?
Generally, anyone can lease a factory, hire equip & start manufacturing carpets
WWL uses people as diff
Built team of dedicated staff, highly motivated management
Focuses on developing and nurturing staff, who in term focus on strategic imperatives
Turns average business into fantastic one
CPT scheme and bonus scheme are critical in achieving this
Why are the key risks facing WWL heightened at the moment?
Due to the extremely difficult to predict external circumstances
What are the key risks facing WWL?
- Cyclical business
- Economic uncertainty
- Client concentration
- Competitors
- Suppliers
- Seasonality
- Sustainability
Why is the following a key risk?
Cyclical business
It services from the high correlation between the fortunes of WWL’s sector and underlying economic cycles
Why is the following a key risk?
Economic uncertainty
buyers seeking mid-priced carpets have looked to trade down to more affordable floor coverings because of economic uncertainty
Why is the following a key risk?
Client concentration
WWL is increasingly becoming reliant on bespoke design work
Why is the following a key risk?
Competitors
All the following are competing for business:
Powerful UK rivals
low priced overseas imports
Well-resourced innovative new entrants
Why is the following a key risk?
Suppliers
WWL is reliant on a single wool-based yarn supplier and single distributor
Why is the following a key risk?
Seasonality
Seasonal business, combined with manufacturing capacity constraints require the company to build up inventory in anticipation of demand
Why is the following a key risk?
Sustainability
Traditional carpet manufacture creates a fundamental challenge to env sustainability
In turn, impacts the businesses sustainability
How does WWL mitigate the following risk?
Cyclical business
- Sound financial planning
- Diversity of clients
- Innovation in product design and development
- Low operating gearing
How does WWL mitigate the following risk?
Economic uncertainty
- Aims to have diversity of clients
- Innovation in product design and development
How does WWL mitigate the following risk?
Client concentration
- Aims to improve diversity of clients
How does WWL mitigate the following risk?
Competitors
- Innovate in product design and development
- Diversity of clients
How does WWL mitigate the following risk?
Suppliers
- Active supplier management
How does WWL mitigate the following risk?
Seasonality
- Sound financial planning
- Diversity of clients
- Low operating gearing
How does WWL mitigate the following risk?
Sustainability
- Innovation in product design and development
- Sound financial planning
- Communication strategy
- Clear environmental policies
- Sustainable business model
What risks does increasing the diversity of clients help to mitigate?
- Cyclical nature of the business
- Economic uncertainty
- Client concentration
- High competition
- Seasonality of the business
How does aiming to have a low operating gearing reduce the risks of the company?
- Reduces the impact of the cyclical nature of the business
- Aids with seasonality
What risks are mitigated by the innovation in product design and development?
- Cyclical nature of the business
- Economic uncertainty
- Competitors
- Sustainability
What risks are mitigated through sound financial planning?
- Cyclicality of the business
- Seasonality of the business
