General approaches to strategic goal setting are outlined in the works of well-known authors (Robert Kaplan, David Norton, their consulting business, as well as the development of the BSC methodology, are presented on this website: Palladium Group, Inc). Issues of applying general approaches to goal setting in management practice using BPM systems are covered to a lesser extent. This article proposes for discussion certain methodological issues of strategic goal setting and the consequences of their solution using BPM systems. The construction of company strategic maps in a more complete version, with the solution of practical problems and cases, is considered.

It happens that unresolved or incorrectly resolved methodological issues of goal setting and reporting are expressed in cumbersome procedures for developing goals, labor-intensive processes of collecting and processing information, in huge expenditures of time for highly paid top managers (“endless” meetings), for whom methodological issues themselves do not are needed, but everyone feels with their “skin” that something in “this process” is not right. Since the corporate procedure is approved by the highest official, both the top manager and the middle manager work within its framework, unless, however, there is some way to bypass it or improve it. It happens that there is no procedure.

Let’s assume that the goal-setting process for the annual business planning cycle looks like in the figure, Figure 1. For simplicity, let’s present the process enlarged, without detail and without connections to strategies. At the 4th step of the process, there is a need, due to the methodology adopted in the corporation based on the concept of a balanced scorecard (BSS), to form a strategic map of goals at the company level (subsidiary company, hereinafter referred to as DC). For brevity of presentation and emphasis, we will not consider all stages within the framework of this article.

It is proposed to discuss the issue of creating strategic maps (SC) using BPM systems and evaluate possible options for forming a SC from the point of view of ease of use, visibility, and time consumption.

Figure 1. An example of a goal-setting process as part of a company’s annual business planning.

Why do you need a strategy map in general? Ideally, the CS allows you to briefly convey the strategic priorities of business development for the planning period in a concise form, with one diagram. A strategic map is a visualization of strategy on 1 sheet, and is a key component of the BSC approach. At the same time, the priorities of the goals in the strategic map are defined holistically, clarified by the weights of the goals, and are interconnected by business logic “if, then” (process logic, calculation formula, accumulated statistics), and are not listed by separate functional groups (if the perspective is finance, then financial the director formulated his goals, etc.).

If weights, current actual values, % of achievement are displayed on the CS, then, under certain conditions, the CS can be a good tool for “orientation from above” as to how things generally stand on the main issues, and this will make it possible to generate visual management reporting based on SK, and dash-boards (panels of indicators) for its key indicators.

Within the BSC community, differences emerge when it comes to specific steps. The terms “goal” and “indicator” can be identified, separated, etc. It is proposed to consider how you can build a company’s QS - in the first approach we use both goals and indicators, in the second - only indicators, and analyze the pros and cons of each approach .

First approach: “strategic goals = indicators + decomposition + projects/plans”

In the figure (Figure 2) various elements in the BSC methodology are highlighted with pictograms: perspective, strategic goal, indicator (goal meter), action plan/project. In this approach, the strategic goal is an element of the BPM system, while the concept of “goal” denotes the semantic vector of priority areas of development, the formulation of the goal does not meet SMART criteria, SMART requirements are met, indicators measuring the achievement of the goal.

Achievement of a strategic goal is ensured by the implementation of its three components: indicators (goal indicators), goals of middle managers (decomposition of company goals), action plans/projects.

Figure 2. An example of a strategic goal at the company level, TC – shopping complex.

In the SK we display only the strategic goals of the company level and in this case, the strategic map will look, for example, like in the figure - Figure 3.

Figure 3. Strategic map of the company within the first approach. The cause-and-effect relationships between strategic goals are not always obvious.

Within the first approach, the composition of indicators measuring the “constellation” of strategic goals in the insurance company can vary significantly from year to year, especially if the goal is not clearly formulated, and its meaning becomes clear only by the end of the reporting period, when the first measurements of indicators measuring this goal.

Second approach: “indicators + projects/plans”

In the second option, goals are not an element of the BPM system, the concept of “goal” is retained, denotes global quality priorities, is present descriptively in planning documents - to become leaders, to be in the top three, to satisfy the client best, etc. The main work is done with indicators and meters. And we can say that in this case the indicator acts as an instrumental goal that meets all SMART requirements. The “gap” between the planned value of the indicator and its actual value for the previous period is the goal for the person responsible, the “gap” sets the direction of effort (example, Figure 4, Figure 5). Integrated company level indicators are the responsibility of top managers. The decomposition of company-level indicators can go “down” through the levels of the organizational hierarchy, if desired, to each ordinary employee.

For example, at the company level, the commercial director is responsible for revenue for all sales channels, and his deputies are responsible for revenue for individual sales channels, Figure 4.

Figure 4. Company level targets with decomposition.

Figure 5. Gap between planned and actual values ​​of the “service quality coefficient” indicator.

Within the second approach, the composition of indicators remains largely stable from year to year; only the portfolio of development projects, the implementation of which is aimed at achieving new planned indicator values, varies to a significant extent.

Each indicator presented in the BPM system is provided with a methodology for its calculation and evaluation criteria - in which cases its actual values ​​will be recognized as “unsatisfactory, satisfactory, good or excellent”.

Planned values ​​of indicators are achieved through the implementation of plans, development projects (initiatives), as well as through optimally structured business processes of the company: management processes, main and auxiliary business processes.

In the second option, the strategic map will look, for example, like in the figure, Figure 6.

Figure 6. Strategic map within the second approach. The cause-and-effect relationships are more obvious than in the first approach (according to the author).

How to develop useful key indicators that measure strategy and reflect company development priorities? Where can I borrow them from? Where can I see examples of KPIs? You can work with these questions by reading the article.

To summarize, we can formulate options for the company’s strategic maps, which include:

1. Only strategic goals
2. Metrics only
3. Both – strategic goals and indicators

Of course, each option has its pros and cons.

	pros	Minuses
Strategic Goals(1 approach)	A strategic goal reveals the meaning of changes, shows the vector of development in a greater semantic context than an indicator (measurer).	. There is a risk that the goal is the right beautiful slogan and “hangs in the air”, and may not be measured correctly.
	The desires and attitudes of shareholders are easier to transform into a “constellation” of goals of the company’s insurance policy than into a list of indicators.	The relationships between the strategic goals are not obvious, and there is a wide range of opinions in determining the relationships between the goals. The time spent by top managers on approving the insurance system may not justify the effect of developing the insurance system.
	You can realize your desire - to see how the top-level goal is decomposed into a “chain” of goals/indicators of all lower levels, which gives a sense of management transparency.	In the model of the company's goals, many levels of nesting are formed, which leads to an increase in the complexity of working with the BPM system.
Indicators(2 approach)	Simplicity and clarity: connections between indicators are obvious (connections are built on the basis of a calculation formula, business process logic, experience, statistics), there are fewer elements in the BPM system.	The indicator is “dry” in its formulation; it is not always clear why it is a priority. To understand the context, you need to refer to the narrative of the strategy.
Strategic goals and indicators	The disadvantages of the first two approaches are removed.	There is a risk that the result will be a cumbersome and unreadable strategy map that only the strategic management office can understand. The practical usefulness of this tool is reduced, there is no ease.

Table 1. Pros and cons of strategic map options.

Building a strategy map is, of course, only a small part of the journey. When indicators are assigned weights and included in the incentive system, the “conversation” on the topic of SC and BSC becomes more substantive. In order for the ICS to become a convenient and practical tool for “orientation from above” on how things are generally going on the main business issues, the ICS needs to display the current actual values ​​of indicators, “display” color indicators (good, bad, acceptable) - to form a visual management reporting. The actual value can appear in the BPM system in one of three ways:

1. Enter manually (the most time-consuming method, from the point of view of business users).
2. “Pump up” data through integration mechanisms from accounting systems (the load is shifted to the company’s IT department).
3. The fact is calculated using a formula by calculation, based on previously entered data for other indicators.

If a company has decided to implement a BPM system, then, of course, the next step would be logical - integration of existing accounting and planning systems with the BPM system. Manually entering a fact into a BPM system is, of course, possible, but extremely ineffective.

The differences in approaches may seem far-fetched and insignificant to some, but if we consider the issue from the point of view of using this management tool on a regular basis, the picture will be different, with different labor intensity:

• plans and reports are formed,
• distribute the weights of goals/indicators,
• % of achievement of goals/indicators is calculated.

In test mode, it is possible to implement all options in the BPM system, and each company can experimentally test the convenience of each option. This is not as labor intensive as Excel, Visio or PowerPoint, but requires the willingness of the management team to develop management practices using modern IT solutions.

Both the first and second approaches to the formation of the SC are quite workable. Each company is free in its decision to adapt well-known management concepts to its corporate culture, management style and other features called “specifics”. The choice is up to the top officials of the company and the management team.

You can work out options for constructing strategic maps, discuss issues, and consider examples from practice.

Strategy describes how the organization intends to create sustainable (long-term) value for its shareholders 1 . In Chapter 1, we documented how organizations today use intangible assets as a powerful lever to create value. The processes of creating value from intangible assets, on the one hand, and from tangible and financial ones, on the other, are seriously different from each other.

1. Creating valuehas an indirect nature. Intangible assets, such as knowledge and technology, rarely have a direct impact on financial results such as revenue growth, cost reduction and profit improvement. Improving intangible assets affects financial results through a chain of cause and effect. For example, training for employees in Total Quality Management (TQM) and Six Sigma directly affects quality improvement, which, in turn, contributes to customer satisfaction and, consequently, strengthening their loyalty. Ultimately, customer loyalty is a condition for increasing sales and profits, that is, the result of long-term customer relationships.
2. Cost is contextual. The value of intangible assets depends on their alignment with the company's strategy. Thus, training in Total Quality Management and Six Sigma is of greater value to organizations focused on a cost reduction strategy than to those pursuing a product leadership and innovation strategy.
3. The cost is potential. Based on the costs of investing in intangible assets, it is very difficult to assess their value for the company. The point is that investing in intangible assets, such as training in statistical quality control or root cause analysis, has potential value to the organization, but not market value. Internal processes such as design, manufacturing, delivery and customer service are necessary to transform the potential value of intangible assets into tangible value. If internal processes are not focused on offering customer value or financial improvements, then the potential value of employee capabilities and intangible assets will not be realized.
4. Interconnectedness of assets. Intangible assets by themselves rarely create value. In isolation from the organization and its strategy, they have no value. The value of intangible assets arises when they are effectively combined with other intangible and tangible assets. For example, the value of quality management training becomes immeasurably higher if employees have timely access to databases of information systems that serve business processes. Maximum value is created when all intangible assets are in strict accordance with each other, with tangible assets and with the company's strategy.

The balanced scorecard strategy map (see Figure 2.1) is a model that shows how strategy integrates intangible assets and value creation processes. The financial component describes the material results of implementing a strategy using traditional financial concepts. Metrics such as ROI, shareholder value, profitability, revenue growth and unit costs are lagged indicators that indicate the success or failure of a company's strategy. The customer dimension defines the customer value proposition to target customers. Consumer supply in this case is the condition under which intangible assets create value. If customers value consistently high quality and on-time delivery, then the competencies and skills of employees, systems and processes that produce and deliver quality products and services are of high value to the organization. If the customer prioritizes innovation and high performance, then the skills, systems and processes that create new market-leading products and services become more valuable. Consistently aligning actions and capabilities with delivering value to customers is critical to bringing strategy to life.

The financial and customer components describe the desired results of the strategy. Both have many delayed indicators. How does the organization achieve its planned results? The internal processes component, or internal component, defines several critical processes that are critical in implementing strategy. For example, one organization may increase investment in the development and marketing of new products and manufacturing technology so that customers receive a high-tech new product as a result. Another, in an attempt to provide customers with a similar value proposition, decides to develop new products through joint ventures and partnerships.

The training and development component reflects those intangible assets that are most important to the strategy. The objectives of this component establish the activities (human capital), systems (information capital) and moral climate (organizational capital) necessary to support value creation processes. All of them must be interconnected and consistent with the main internal processes.

The goals of the four components are related to each other through cause-and-effect relationships. It all starts with the hypothesis that financial results can only be achieved if the target customer group is satisfied. The customer value proposition describes how to increase sales and win the loyalty of target customers. Internal processes create and provide this offer to the client. Finally, intangible assets that support the execution of internal processes provide the basis for strategy. The goals of all components brought into strategic alignment are the main tool for creating value, and therefore, a focused and consistent strategy.

This architecture of cause and effect, linking the four components of the BSC, is the structure around which the strategy map is built. This process forces the organization to clearly define what the logic of value creation is and for whom it is created. In this chapter we will talk about the principles of constructing a strategic map.

Figure 2.1. Balanced Scorecard Model

STRATEGY AS A STEP IN THE CONTINUUM

Strategy is not an isolated management process; this is just a step in a logical sequence of steps that determines the organization’s path from the top - the mission - to the specific strategic tasks assigned to the performers. Figure 2.2 presents a diagram that, in our opinion, is very useful in practice.

The pinnacle - the mission of the organization - is a certain starting point that determines the purpose of the company's existence or the place of the business unit in the overall corporate architecture. The mission and the core values ​​that accompany it remain fairly stable throughout. An organization's vision, or vision, paints a picture of the future, clearly defines the direction of the organization and helps employees understand why and how they should participate in the implementation of the strategy. In addition, the concept starts the movement of the organization - from the stability of the mission and core values ​​to the dynamics of strategy - the next step of the continuum. Strategy is developed and developed over time to respond to changing external environmental conditions and internal capabilities.

Most organizations have already formulated their mission and corresponding vision. Of course, they all differ depending on the type of activity and goals, but there are some general provisions that characterize these concepts:

Mission. A short, clearly formulated internal document that explains the purpose of the organization, its objectives and the core values ​​that guide the direction of the company and each of its employees. The mission should also define how the customer value proposition is created and delivered to customers. The mission is internally oriented. Below we present the missions of two completely different organizations.

Ben & Jerry's Mission

Ben & Jerry's vision is to develop and implement a new corporate vision for prosperity. Our mission has three interdependent parts.

Product. The company produces, distributes and markets a wide range of natural, high-quality ice cream using Vermont dairy ingredients.

Economy. The Company operates on a strong financial foundation of growing profitability, enhancing shareholder value, creating career opportunities and financial rewards for employees.

Community. The company recognizes the central role business plays in the fabric of society, pioneering new ways to improve the quality of life of communities - locally, nationally and internationally.

Charlotte City Mission

The City of Charlotte's mission is to provide quality public services that improve the safety, health and quality of life of its residents. The city identifies the needs of the community and tries to meet them:

• creating and maintaining effective partnerships;
• attracting and retaining professional, motivated employees;
• using strategic business planning.

Vision. A short, clearly formulated internal document that defines the medium and long-term (three to ten years) goals of the organization. The vision is externally oriented and must be market focused. It figuratively and “intelligibly” answers the question: how does the organization want to see itself through the eyes of the surrounding world.

Vision for the City of Charlotte

The City of Charlotte will be a model of excellence that places the people of the city at the center of its interests. Highly qualified and motivated professionals provide all kinds of services and value. We will be the foundation of vital economic activity that will give the city a competitive advantage in the marketplace. We will work with citizens and businesses to make Charlotte an exemplary city to live, work and play.

Vision for a financial services company

We will become a respected leader in financial services, focused on excellence in customer relationships, customer satisfaction and financial results that place us among the top four companies in the industry.

Mission and vision establish the overall goals and direction of the organization. This helps shareholders, customers and employees understand what their company is about and what it intends to achieve. However, these statements are not clear and definite enough to guide them in everyday activities and make operational decisions about the allocation of resources. The mission and concept become a guide to action only when the company develops a strategy for achieving the goals and solving the problems set in them.

Strategy. The literature on this topic is very diverse. Theorists and practitioners not only offer their own model of strategy development, but have still not come to a consensus on its definition 2 . Because strategy maps and the balanced scorecard are universal to any strategy approach, we build on the approach proposed by Michael Porter, the founder and distinguished pioneer of the field of strategy. Porter argues that strategy is the selection of those activities in which the organization will achieve excellence, creating a sustainable competitive advantage in the market. This could be providing customers with a customer offering that is more valuable than the competition, or comparable in value but at a lower cost. He says: “Differentiation arises from both the choice of activity and the results obtained” 3. We will provide specific examples of such strategies when we discuss customer offerings as a company's choice to provide to customers.

So, having a brief description of the highest level directions - mission, vision and strategy - we can begin to develop a strategic map that will make strategic goals and objectives, as well as ways to achieve and solve them, clear and relatable to every employee of the organization. Let's start with the financial component of the strategic map, and then step by step consider the client, internal and training and development components.

Figure 2.2. The Balanced Scorecard is a step on a continuum that describes what value is and how it is created.

Financial component: strategy balances opposing forces - long-term or short-term results

The Balanced Scorecard presents the financial component as the ultimate goal for companies that seek to achieve the highest possible profits 4 . Financial performance measures provide evidence of how a company's strategy contributes to improving its bottom line. Financial goals usually refer to increasing profitability, as measured by, for example, operating income and ROI. Essentially, financial strategies are simple: a company can make money by first selling more and second by spending less. Everything else is “musical background”. Any program—customer trust, Six Sigma quality, knowledge management, advanced technology, on-time product delivery—creates value only if it leads to increased sales or reduced costs. Thus, the company's financial results improve through two main factors - income growth and productivity (see Figure 2.3).

A company can achieve revenue growth by strengthening relationships with existing customers. This allows you to increase sales of existing products and services or their additional range. For example, a bank may try to persuade its checkbook customers to also use bank-issued credit cards or to take out a loan to buy a house or car.

The same goal—increasing revenue—can be achieved by selling completely new products. For example, Amazon.com now sells compact discs and electronic equipment in addition to books, and Mobil offers related products to motorists at its gas stations in fast-food stores. Another way is to sell products in new market segments. Thus, Staples sells its products to small businesses along with retail consumers - or expanding the market - from domestic to international.

Productivity growth, the second factor of the financial component, is also achieved in two ways. First, this cost reduction through lower direct and indirect costs allows the company to produce the same amount of product at lower costs for labor, materials, electricity and supplies. Secondly, by using its financial and physical assets more efficiently, the enterprise reduces the working capital and fixed capital required to maintain a given level of business. For example, by using a just-in-time approach, a company can maintain the required level of sales without excess inventory of goods and materials, and by reducing unplanned downtime, it can increase productivity without increasing investment in equipment.

The connection between strategy and the financial component of the BSC arises if the organization establishes a certain balance between two often contradictory factors - growth and productivity. Typically, it takes significantly longer to achieve revenue growth, and therefore create value, than it does to improve productivity. Under daily pressure to demonstrate financial achievements to shareholders, there has been a clear tendency to favor short-term results over long-term results. When developing a strategic map, an organization inevitably faces such a conflict. The primary financial goal should be sustainable growth in shareholder value. That is why the financial component of the strategy must have both long-term (growth) and short-term (productivity) indicators. The instantaneous balancing of these opposing forces is the organizational model for the strategy map.

Figure 2.3. The financial component is the material definition of value

Customer component: the basis of the strategy is a differentiated offering of customer value

A revenue growth strategy requires a specific customer proposition. In the customer dimension, this refers to how the organization intends to create differentiated, sustainable value for target customer market segments. When formulating the customer component of the strategic map, managers identify the target consumer market segments in which a given business unit competes and the performance indicators of its performance from the point of view of customers. Typically, the client component includes certain general criteria for successful activity as a consequence of a correctly formulated and implemented strategy (see Fig. 2.4):

• customer satisfaction;
• maintaining the customer base;
• the expansion of the customer base;
• client profitability;
• share in the company's business 5.

Figure 2.4. Customer component: creating a sustainable differentiated value proposition is the basis of the strategy

These overall client outcome measures can themselves be interpreted in the context of cause-and-effect relationships. For example, customer satisfaction typically results in maintaining and expanding the customer base through the transfer of information from consumer to consumer. By retaining a customer, the company has the opportunity to increase his share in its business, as happens with a group of loyal customers. By combining the process of multiplying the customer base and increasing business with existing customers, the company should consistently increase its market share of target customers. As a result, maintaining a customer base will inevitably lead to increased customer profitability, since retaining is significantly cheaper than acquiring new customers or replacing old ones.

Essentially all organizations try to improve these overall customer performance, but simply trying to satisfy and retain customers is hardly a strategy. The strategy must identify specific segments of the consumer market that the company intends to expand and make more profitable. For example, Southwest Airlines offers low prices to satisfy and retain customers for whom price is very important. At the same time, the Neiman Marcus fashion chain stores are targeting customers with high disposable income who are willing to pay for excellent quality products and services. Satisfaction, customer retention, and share of the target consumer market should be assessed. Naturally, low-income shoppers are likely to be dissatisfied with shopping at a Neiman Marcus store, and business class travelers are unlikely to fly on Southwest Airlines, which has long routes and limited first-class seat availability.

Once a company begins to understand who its target customer is, it can formulate goals and metrics for its intended customer value proposition. This proposition defines the company's customer strategy by describing the unique product mix, price, service, relationships, and image that the company intends to deliver to its target customer group. It should convey clear information about what the company is going to do better or differently compared to its competitors. For example, companies as diverse as Southwest Airlines, Dell, Wall Mart, McDonald's, and Toyota have done extremely well by encouraging customers to make a “good buy” or “get the lowest price in a given product or service category.” The purpose of the “lowest price” consumer offer is to emphasize attractive price, consistent excellent quality, speed of delivery, ease of purchase and good selection (see the top line of Figure 2.5).

Another type of customer value proposition, such as those created by Sony, Mercedes and Intel, emphasizes innovation and product leadership. Most of the products produced by these companies command high prices because they are highly functional. The purpose of such an offer is to highlight the special characteristics and features of a product that is especially popular with an advanced consumer and for which the latter is willing to pay without hesitation. Indicators in this case can be speed, size, accuracy, energy consumption and other functional characteristics, thanks to which the product is superior to similar products from competitors, and therefore is especially valued by the consumer. Companies whose strategy is based on the concept of innovation and product leadership have another very important goal: “to be the first to introduce new product features and functions to the market” (see the second line of Figure 2.5).

The third type of customer proposition is the provision of a complete customer solution. A good example is IBM and Goldman Sachs. In this case, customers feel that the company understands their needs and is able to provide them with customized products and services, that is, ones that meet the specific requirements of customers. During its leadership in the computer industry, IBM did not offer the lowest price, and did not often enter the market with a new product. Moreover, the company's products were not advanced in technology, power or speed. But to its target customers - information technology executives - IBM provided a complete customer solution - hardware, software, installation, maintenance, training, staff training and consulting, all in accordance with the specifics and needs of each specific organization. Companies making such proposals consider the main goal to be the provision of a complete customer solution (selling a set of products and services), exceptional pre-sales and after-sales service, as well as the quality of customer relationships (see the third line in Figure 2.5).

The fourth type of general strategy is called lock in. It refers to the ideal situation where a company-owned product, such as a computer operating system or configuration, becomes an industry standard 6 . In this case, both buyers and sellers strive to build their products on already established standards in order to obtain maximum benefit from their use by consumers. In such a situation, companies charge high prices for connecting to the system. Another example of a successful lock-in strategy is a large commodity exchange such as eBay* or Yellow Pages. Buyers choose where sellers, goods and services are most fully represented, and sellers, in turn, have the opportunity, within the same exchange, to simultaneously offer their goods and services to a wide range of potential buyers. In such a situation, one or two supply companies tend to dominate the exchange, prevent other providers from participating, and offer buyers and sellers a high price for connecting to the network (see bottom line of Figure 2.5).

The goals and indicators of a particular consumer offering determine the organization's strategy. By setting specific goals and indicators, the enterprise translates its strategy into tangible indicators that are clear to all employees and towards which their efforts are directed.

Figure 2.5. Customer Experience Goals: Differentiated Customer Value Proposition

Internal component: internal business processes - a tool for creating value

Customer objectives describe the strategy (target customers and customer proposition), while financial objectives describe the economic outcomes of a successful strategy (revenue and profit growth, as well as productivity). The objectives of the other two components - internal business processes and training and development - formulate how the chosen strategy should be implemented. The organization manages its internal processes and the development of its human, information and organizational capital to provide a differentiated customer offering that reflects this strategy. The excellent results of these two components are the driving force of the strategy.

The internal component is responsible for two vital components of strategy: 1) developing and delivering the value proposition to the customer and 2) process improvement and cost reduction as a means of increasing financial performance. We classified the myriad of possible internal processes into four groups (see Fig. 2.6):

1. production management process;
2. customer management process;
3. innovation processes;
4. legislative and social processes.

Production management process

The production management process is the basic day-to-day process by which companies produce their products and services and deliver them to customers. Operations management for manufacturing companies includes:

• purchasing raw materials from suppliers;
• transformation of raw materials into finished products;
• distribution of the finished product to clients (distribution);
• Management of risks.

The operating processes of service companies are the production and delivery of services to consumers.

Client management process

The customer management process broadens and deepens relationships with target customers. We have identified four components of this process:

• selecting a target client;
• winning the target client;
• maintaining the customer base;
• development and expansion of business with clients.

Customer selection involves identifying the target population for which the company's value proposition is best. The selection process describes the characteristics of the client that make him attractive to the company. For companies working with individual consumers, their income, wealth, age, family size, and lifestyle are of interest. The business segment of the consumer market is characterized by particular sensitivity to price, interest in innovation and is technically advanced. Winning a customer involves active proactive actions in relation to new potential buyers, the correct selection of primary products, pricing and termination of sales. Maintaining a customer base is the result of excellent service and quick response to customer requests. Timely and professional service is the most important factor in consumer loyalty. Increasing the client's business share in the company is the result of effective relationship management, cross-selling of a variety of products and services, and building the company's reputation as a reliable consultant and supplier.

Innovation processes

Innovation involves the development and development of new products, processes and services, often helping the company penetrate new markets and conquer new segments of the consumer market. Innovation management is as follows:

• identifying new product and service opportunities;
• portfolio management for the development and promotion of new products and services;
• development and promotion of new products and services to markets;
• introduction and promotion of new products and services to the market.

Product developers and managers generate new ideas by expanding the capabilities of existing products and services, applying new technologies and discoveries, and taking into account customer suggestions and wishes. Once an idea for a new product or service is formulated, managers must decide which projects will receive funding, which will be paid for internally, which can be done jointly with another company or licensed, and which should be outsourced entirely to a third party. . Product design and development - the heart of the development process - brings completely new concepts to the market. A process can be considered successful when it results in a functional product that is attractive to the target market segment, that can be produced with consistent quality and a decent profit. The final stage of the product development and development cycle is its presentation to the market by the project team. The innovation process of a particular project is completed when the company achieves its planned sales and production volume at the established level of functionality, quality and cost.

Legislative and social processes

Legislative and social processes allow a company to continually earn its right to exist in the very community and country where it produces and sells its products and services. State and local laws - environmental, health, safety, employment - impose certain obligations to comply with the rules and regulations adopted in a given region. However, many companies strive not only to comply with the minimum legal requirements, but also strive through their actions to earn a reputation as the employer of choice in the community.

Companies organize their activities in accordance with the following criteria:

• environment;
• safety and health;
• employment;
• investment in community development.

Of course, investments in the environment, health, safety, employment and community development should not be purely altruistic. An organization's impeccable reputation for complying with the rules and regulations of its community will help it attract and retain top talent, making its human resources processes more efficient. In addition, reducing the incidence of environmental pollution, improving safety and improving the health of the organization's personnel increases productivity and reduces production costs. Finally, companies with excellent reputations tend to be favored by customers and investors. All these factors - qualified personnel, processes associated with internal, client and financial components - demonstrate how effective management of legislative and social processes turns into a factor in the successful creation of long-term value for shareholders.

Figure 2.6. Internal processes create value for customers and shareholders

THE STRATEGY IS DEVELOPING AT THE SAME TIME IN MUTUALLY COMPLEMENTARY DIRECTIONS

By developing the internal component of the strategic map, managers determine the most important processes. Companies that build their strategy on product leadership pay special attention to improving innovative processes; those focused on reducing overall costs should strive for excellence in production processes; and organizations that implement a total customer proposition strategy focus on customer management processes.

However, even when focusing on one of the four areas of the internal component, it is necessary to pursue a “balanced” strategic course and invest in each of them. Typically, the financial benefits of process improvement become visible over varying periods of time (see Figure 2.7). Reducing costs due to improved operational processes gives the fastest results (from six to twelve months). Revenue growth associated with improved customer relationships occurs in the medium term (from 12 to 24 months). Increasing revenues and profits from innovation processes usually takes, say, 24 to 48 months, and the benefits of complying with the laws and regulations of the communities in which the company operates, creating and reinforcing the image of its law-abiding member and employer of choice, take even longer to manifest .

There are literally hundreds of processes going on simultaneously in an organization that create value in one way or another. The art of strategy is to identify and refine the few that are most important to the customer value proposition. While all processes must be managed effectively, a few strategic ones require special attention and focus because they create differentiation. Such processes should be selected in each of the four directions. Any strategy must define one or more processes within the framework of production management, customer management, innovation, as well as legal and social aspects. In this way, the value creation process becomes balanced in relation to short-term and long-term periods, which ensures sustainable and continuous growth of value for shareholders.

Several critical strategic processes are often organized into strategic directions, allowing the organization to focus its activities and create a reporting structure. Strategic directions are the building block around which strategy implementation occurs.

Figure 2.7. Internal processes: delivering value in different time periods

Figure 2-8 shows seven strategic directions for a high-tech manufacturing company. Its strategy is to broaden its customer offering: moving from the narrow focus of providing a high-quality product to a complete customer solution. At the heart of this strategy were two components of customer management - sales proposal and relationship management. They formed the basis of a new partnership with the client. Two areas of operational management – ​​“just in time” and flexible production – ensured

Our collaboration with more than 300 organizations has resulted in a comprehensive database of strategies, strategy maps and balanced scorecards. In addition, we learned to what extent different areas of management are developed in various enterprises - shareholder value management, business and corporate strategy, customer management, development and promotion of new products to the market, innovation, operational, environmental and social management, human resource management , information technology and corporate culture. With this experience and knowledge, we have discovered that the BSC, originally conceived as a means to improve the valuation of intangible assets, can be an effective tool for formulating and implementing company-wide strategy. The four-pillar model, which describes an organization’s value creation strategy, is actually the language of communication between the company’s top management and its employees regarding the directions and priorities of the enterprise’s development. They can view strategic indicators not as a set of independent parameters of independent components, but as a chain of interdependent goals of the four components of a balanced scorecard, based on cause-and-effect relationships. We contributed to the discussion among top managers by presenting the overall interaction of these connections in the form of a so-called strategy map. And now we understand that the strategy map - a visual representation of the cause-and-effect relationships between the elements of a company's strategy - has turned out to be as important and significant a phenomenon as the balanced scorecard itself.

The overall strategic map shown in Figure 1.3 was formed from a simple BSC with four components. The map details the system of indicators, illustrating the dynamics of strategic development and making the focus on the main directions clearer. As we noted earlier, in practice there are many approaches to creating a strategy. However, no matter which one is used, a strategy map provides a universal and consistent way to describe strategy in a way that allows you to not only set goals and metrics, but also manage them. The strategy map is the hitherto missing link between strategy formulation and its implementation.

The strategy map template (see Figure 1.3) is a kind of checklist of strategic components and their inter-relationships.

Operations management process

Regulatory and social processes

Acquiring new clients Maintaining the client base Growth

New product design and development capabilities New product development portfolio Project/Development Launch

Environment Safety and Health Employment Community

actions. If any element is missing, the strategy is most likely doomed to failure. For example, we often find that in an organization there is no relationship between the performance of internal processes and the customer value proposition; there are no innovative goals; tasks related to the development of competencies and motivation of employees are poorly formulated; the role of information technology is not defined. Such errors in the strategic map usually lead to disastrous results.

The strategy map is based on several principles.

Strategy balances opposing forces. Typically, investing in intangible assets for long-term earnings growth comes into conflict with cutting costs to achieve quick financial results. The primary goal of private sector organizations is to achieve sustainable growth in shareholder value. It (the goal) implies long-term commitments. At the same time, the organization must demonstrate improvement in short-term results. Short-term results can only be achieved by sacrificing long-term investments, and often this happens unnoticed. Thus, the first thing to do when writing a strategy is to balance the short-term financial goals of cutting costs and increasing efficiency with the long-term goals of sustainable profit growth.

The strategy is based on a differentiated value proposition to the consumer. Customer satisfaction is the source of sustainable value creation. The strategy requires a clear definition of target customers and a value proposition that can please them. The clarity of this proposal is one of the most important aspects of the strategy. In Chapter 2 and then in Chapter 11, we will discuss four core customer value propositions and customer strategies that we see implemented in various organizations: 1) low total cost; 2) product leadership; 3) complete customer solution; 4) system lock-in.

Each customer value proposition clearly defines the prerequisites that must be met if customer satisfaction is to be achieved.

Value (cost) is created in an internal business process. The financial and customer components in strategic maps and BSCs are the outcomes that the organization intends to achieve: increasing shareholder value through revenue growth and improved efficiency; expanding the company’s share in the client’s total expenses, which is achieved by maintaining and expanding the client base, satisfying consumer needs, education and customer loyalty.

The processes of the internal component and the training and development component are the driving force of strategy. They describe how this strategy can be put into practice. Effective and consistent internal processes determine how to create sustainable value. A company must focus on a few critical internal processes that differentiate its customer value proposition and are most essential to improving the company's performance and maintaining its viability. In the second part of this book, we will introduce a systems approach in which an internal business process can be divided into four complex components:

Operations management: production and delivery of products and services to customers;

Client management: establishing and regulating relationships with consumers;

Innovation: developing and developing new products, services, processes and relationships;

Compliance with local laws and contribution to the community: an asset

active participation in the life of the community and strict compliance with current legislation.

Each of these components can have literally hundreds of components that are involved in varying degrees in creating value. Leaders developing their strategy must identify several critical processes that are most critical to creating and delivering a differentiated customer value proposition. We call these processes strategic directions.

The strategy consists of mutually complementary and synchronously developing areas. Each complex component (or direction) of internal processes creates profit simultaneously at different points. Operational process improvements, such as cost reduction and quality improvements, tend to produce short-term results. The benefits of improved customer relationships begin to be felt six to twelve months after changes are made to customer management processes. You have to wait much longer for an increase in profit as a result of innovation, and the results of the company’s activities in a given community are completely manifested in the distant future, when it manages to create a positive image and a corresponding reputation in society. The strategy must be balanced and include at least one strategic direction from all four comprehensive components. In this way, the organization realizes emerging opportunities to increase shareholder value.

Strategic fit determines the value of intangible assets. The fourth component of the balanced scorecard strategic map - the training and development component - describes the organization's intangible assets and their role in implementing the strategy. Intangible assets can be divided into three categories:

Human capital: skills, talent, knowledge of employees;

Information capital: databases, information systems, networks and technologies;

Organizational capital: culture, leadership, relevant people, teamwork, and knowledge management.

None of these intangible assets themselves have a measurable value. Their value lies in the fact that they help companies translate strategy into reality. Our research has shown that two-thirds of organizations do not create strategic alignment between their long-term plans and the programs of their HR and information technology departments. 17 Their development is invested on a residual basis. Moreover, companies do not use the capabilities of these divisions in implementing their strategies. Naturally, with this approach one can hardly count on a positive return on investment.

We have identified three targeted approaches to align intangible assets with the company's strategy:

1) strategic groups of types of professional activity (job families), which bring human capital into line

with strategic directions;

2) a strategic information technology portfolio that aligns information capital with strategic directions;

3) an organizational change plan that integrates and aligns organizational capital with strategic directions for continuous learning and improvement.

When all three components of training and development - human, information and organizational capital - are aligned with strategy, the company is fully prepared for change: it has the ability to mobilize forces to implement the strategy. In our opinion, a high degree of readiness is characterized by an organization in which:

The capabilities of human capital in strategic types of professions are brought into strategic alignment with development directions;

Information capital ensures the availability of infrastructure and information technologies that complement human capital in order to achieve outstanding results in solving strategic problems;

Culture, leadership, strategic alignment, and teamwork create and reinforce the healthy morale needed to bring strategy to life.

In general, the strategy map model, adjusted to fit an organization's strategy, describes how intangible assets help create value for customers, shareholders, and communities. The reader will understand how to use strategy maps to align intangible assets strategically by reading the two case studies that follow this chapter. The Bank of Tokyo case is an illustration of the creation and application of strategy maps and balanced scorecards in the private sector of the economy. The American Diabetes Association is an example of a similar approach in the non-profit sector.

The development of modern companies takes place in line with a significant number of business processes. The manager faces the difficult task of managing these processes as a whole and assessing their effectiveness, while taking into account the uniqueness of each of them and its role in the development of the entire company. To manage a company, various strategies are traditionally used, used by managers to rationally distribute resources and responsibilities in the company.

The strategy determines the general directions and priorities in the development of the company. It should not just contain formal plans, but involve the practical implementation of its provisions by company employees at all levels of the hierarchy. Unfortunately, in practice one can often see a situation where the developed strategy remains the prerogative of top management and is not understood and not used by the rest of the company’s employees. Ordinary employees and line managers may not even know its basic provisions, performing routine operations that they had previously learned. Also a negative factor is mutual misunderstanding about the company’s strategic alternatives among senior levels of management, associated with various reasons. For example, such a reason may be the focus of board members on their functional areas and the desire to develop only them. This situation leads to a breakdown in communications between them, a loss of synergistic effect and the emergence of systematic conflicts, during which each of the participants strives to promote their own position.

The second significant problem is the task of assessing the effectiveness of business processes, which allows us to identify the need and opportunities for their optimization in accordance with the company's goals. The traditional approach, used for several decades, involves the use of financial performance indicators for this purpose. When using financial indicators, specialists from the financial or analytical department of a company strive to translate all the results of its activities into quantitative indicators that make it possible to identify a specific financial result from each business process. This approach is imperfect in terms of real results. As you know, the activities of each company have both quantitative and qualitative dimensions. Qualitative indicators include those that are not directly measured in financial terms: the level of intellectual development of personnel, the level of product quality, customer loyalty, etc. Critics of the traditional approach, which relies solely on financial indicators, point out that such attempts often lead to inaccuracies and significant bias in assessing company performance.

This task seemed insoluble until 1990, when American scientists D. Norton and R. Kaplan conducted research in the field of assessing the effectiveness of companies. As a result, a unique system for transforming the strategy into sequences of actions and procedures that are understandable to all employees of the company was developed, and a qualitatively new system for assessing its effectiveness was formed. The authors named it Balanced Scorecard (BSS). The main goal of developing this system is to solve the two problems discussed above:

• transforming the company’s corporate strategy into specific and clear strategic plans for all levels of management;
• formation of a balanced system of performance assessment indicators, including assessment of the quantitative and qualitative results of the company’s activities.

Let's look at these branches.

Clients – the market segment in which the enterprise operates, or the customer base (depending on the chosen terminology). This is an important part of the company’s work, on which the level of customer loyalty, consumer satisfaction, as well as the influx of new customers from the external environment depends. This branch assumes that the main direction of work is increasing the market share (customer base) of the company. The focus of managers here is on customer expectations and the enterprise’s ability to satisfy

Rice. 2.9.

satisfy them taking into account existing economic and technological capabilities.

Internal business processes – here we mean the effectiveness of the development of those internal processes of the company that will help increase the number of its clients, increase its influence in the market, i.e. ultimately aimed at the growth of the company. The creators of the BSC especially note that in this case we are talking not only about existing business processes, but also about the possibility of creating new processes in accordance with emerging tasks. The second difference of the approach declared by the BSC is the mandatory presence at the enterprise of innovative business processes, which form the basis of its competitiveness in the market and allow increasing the added value chain.

Financial indicators – various indicators of the company’s financial performance, for example, the level of its profitability, liquidity, etc.

Training and career development – the goal of the development of this area is to increase the efficiency of personnel as the most important component of the competitiveness of an enterprise, on the development of which all areas of its activities depend. Competition in global markets requires manufacturers to take into account and use all resources available to them, including human ones. The professional, intellectual and creative potential of employees largely determines their personal effectiveness and affects the overall level of socio-economic efficiency of the entire enterprise.

For each of these branches, the company’s top management, together with specialists, forms groups of unique indicators, which are called “key performance indicators” (from the English. key performance indicators – KRG ). Each of the KPIs allows you to comprehensively and clearly assess a separate parameter of the development of the company and its employees within the listed branches of development. At the same time, there is no universal set of KPIs “for all occasions”; their development is the task of every company that introduces BSC into its practice. To solve this problem, most companies invite consultants who specialize in the implementation of BSC and have extensive knowledge in the field of business process reengineering.

According to the creators of the BSC, this system should not only help improve existing processes, but also form new ones in accordance with the identified gaps between the current performance indicators of the enterprise and the level that is necessary to achieve the goals stated in the strategy. Improving the enterprise's business process system is one of the priority areas of the BSC. The system in this sense stimulates the evolution of various areas of activity of the enterprise, the final goal of which is to achieve its strategic goals.

Each of the branches of the BSC contains a matrix (Goals, Indicators, Tasks, Initiatives), which reflects the sequence of necessary actions that result in the deployment of the BSC in the company. Below is a description of these elements.

• Goals - management needs to clearly formulate the strategy of the company or enterprise and translate it into specific tasks that can be communicated to department heads.
• Indicators – next, a relationship is established between the goals defined at the previous stage and indicators with which the degree of their achievement can be assessed. These indicators are also communicated to the heads of departments of the enterprise or company.
• Tasks – distribution of tasks between top and line management to determine the development goals of their departments and areas.
• Initiatives – the formation of a developed feedback mechanism from line management and personnel of a company or enterprise in order to collect information on possible areas for improving the performance of the organizational structure.

One of the main working tools used within the framework of the BSC is strategic cards. These maps represent graphical diagrams that visually reflect the strategic goals of the enterprise along the four branches listed above, linking them with existing business processes, as well as with indicators that help identify the degree of their achievement. A strategic map allows managers to translate complex and abstract goals into specific and clearly visualized tasks that are understandable to all participants in business processes. An example of such a map is shown in Fig. 2.10.

Rice. 2.10.

The presented diagram shows a strategic map reflecting all four branches of the BSC. In the terminology used when constructing strategic maps, these branches are called projections. The projection “Component of training and development” contains the basic basis for the development of an enterprise: intangible assets that form the foundation of its competitiveness. These include human capital, information capital (patents, know-how, rights to innovative developments, etc.) and organizational capital (enterprise reputation or goodwill). Within the framework of this map, the development of this projection is a necessary condition for the effective development of the next projection (level) “Component of internal processes”. The internal processes include the following groups:

• operations management;
• customer management (marketing mix);
• innovation management;
• management of regulatory and social processes.

As we have already mentioned, all these four groups of processes must be developed with clearly defined goals of increasing the capitalization of a company or enterprise, increasing its market share and the number of segments it occupies. Next comes the “Customer Component” projection, which contains goals and performance indicators designed to increase the value of the organization’s products or services for end users: price, quality, availability, functionality, choice, additional services, etc. A separate item is the brand, which combines the total intangible value of the enterprise in the perception of market participants.

The fourth projection is the “Financial component”, which includes the following goals:

• improving the cost structure;
• improvement of user assets;
• expanding income opportunities;
• increasing value for customers.

Financial goals are the highest level of this

maps, summarizing the previous three projections in the context of the overall strategic goal of any enterprise: increasing its capitalization and profit.

The considered diagram is a simplified example of strategic maps, allowing you to get a general idea of ​​their structure and main elements. Strategy maps are not only effective as a planning tool for senior management. They can be created for any level of the enterprise hierarchy in order to involve line managers and company specialists in their development. These measures are implied by the principle of feedback discussed above in this paragraph, designed to awaken the personal initiative of representatives of various levels of its hierarchy.

Processes play a key role in Kaplan and Norton's strategy map method because they enable the organization to achieve its goals and provide the basis for planning, acting, measuring and reviewing performance.

• Kuzmin A. M. Method "Strategic maps". URL inventech.ru/ pub/methods/metod-0032/

The role and importance of strategic management. Types of strategies and their characteristics. History of the creation and development of the organization. The influence of seasonality on profit. Level of competition in the industry. Development of a strategic map for the travel agency "Wind Rose".

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MINISTRY OF EDUCATION AND SCIENCE OF THE RUSSIAN FEDERATION

Federal State Budgetary Educational Institution

higher professional education

"MOSCOW STATE UNIVERSITY OF TECHNOLOGY and MANAGEMENT named after K.G. RAZUMOVSKY"

(FSBEI HPE MSUTU named after K.G. RAZUMOVSKY)

INSTITUTE OF MANAGEMENT

Department of Management

COURSE WORK

IN THE DISCIPLINE "Strategic Management"

ON THE TOPIC: “Development of a strategic map (using the example of a commercial organization)”

Introduction

1.2 Types of strategy

2.2 SWOT analysis

Conclusion

Bibliography

Introduction

Strategic management is an integral part of our lives at the moment. Translated from English, management means management or organization. Management is a system of program-targeted management, current and long-term planning for the organization of production and sales of products.

Strategic management is a long-term direction of development of an organization, affecting factors of the internal and external environment, leading the organization to its goal. It involves not only determining the main course of the enterprise’s activities, but also increasing the motivation of the organization’s personnel. This is a clear vision of the organization's management about the future state of the organization and ways to achieve this state.

In conditions of fierce competition and a rapidly changing situation, companies must not only focus on the internal state of affairs, but also develop a long-term strategy of behavior that would allow them to keep up with changes occurring in the external environment. Accelerating changes in the environment, the emergence of new demands and changing consumer positions, increased competition for resources, internationalization of business, the emergence of new unexpected business opportunities opened up by advances in science and technology. As well as the development of information networks that make possible the rapid dissemination and receipt of information, the widespread availability of modern technologies, the changing role of human resources, as well as a number of circumstances have led to a sudden increase in the importance of strategic management.

There is no strategy common to all firms, just as there is no general universal strategic management. Any company is unique in its own way, and as a result, the process of developing a strategy for each individual company is unique, because it depends on the position of the company in the market, the dynamics of its formation, its potential, the behavior of competitors, the characteristics of the goods it produces or services provided, the state of the economy, the cultural environment and many other reasons. There are also some fundamental factors that allow us to talk about general principles for developing a behavioral strategy and implementing strategic management.

One of these points is the fact that the starting point of strategic management of each organization is its mission and goals.

The purpose of the course work is to develop a strategic map of the Wind Rose travel agency.

Coursework objectives:

Explore the role and importance of strategic management. Types of strategies and their characteristics;

History of the creation and development of the organization;

SWOT - analysis;

Study the organization's strategy;

Develop a strategic map.

1.1 The role and importance of strategic management. Types of strategies and their characteristics

Strategy is the long-term direction of development of an organization, relating to factors of the internal and external environment that lead the organization to its goal. It is management's clear vision of the future state of the organization and how to achieve that state.

An organization is an association of people whose actions are aimed at achieving certain goals.

The main role of strategic management is to ensure balance and coordination of the three components of the organization’s life processes:

Obtaining resources from the external environment;

Manufacturing of the product (preparation of services);

Sales of a product (or service) to the external environment.

1.2 Types of strategy

Types of organizational strategies can be divided into two groups:

Operating strategy;

Development strategy.

The operating strategy is related to the behavior of the organization in the market. According to the American researcher Potter, three main options can be distinguished: low-cost leadership, differentiation, and performance.

Low cost leadership strategy. It focuses the organization on obtaining additional profits by saving fixed costs, which are formed as a result of abandoning expensive programs and projects, as well as conquering new markets based on prices. This strategy can be effective if price competition is paramount and the product being produced is standard or homogeneous.

Differentiation strategy. Can be done in many ways. Customers' tastes and needs vary widely and cannot be satisfied by standard products, but customers themselves are attached to the organization and perceive differences well, and the product can be used in different ways. And all these methods allow you to increase the popularity of the brand and set a high price.

Focus strategy. It is based on the choice of one of the industry market segments and the achievement of competitive advantages in it by implementing one of the two methods described above.

If the operating strategy is related to the organization’s activities in the market, then the development strategy as an object has its potential and competitive advantages. Currently, it is customary to distinguish four types of this strategy: growth, moderate growth, reduction and combined.

Growth strategy. It is characteristic, first of all, of young organizations, regardless of their field of activity, which strive to quickly take a leading position in the market.

Moderate growth strategy (internal or external). This strategy is typical for organizations that are firmly established in traditional industries, such as the automotive industry. There is progress here in most areas, but at a slow pace - a few percent per year.

Downsizing or disinvestment strategy. It occurs during periods of restructuring of the organization, when it is necessary to make changes and get rid of everything that is outdated. As part of the reduction strategy, part of the organization is eliminated or unnecessary divisions are cut off.

Combined or selective strategy. Within its framework, some divisions or market segments of the organization are developing rapidly; others - moderately; third - stabilize; fourth, they are reducing the scale of their activities.

Strategies may also vary in nature. Three types of strategy can be distinguished: offensive, offensive-defensive (stabilization strategy) and defensive (survival strategy).

Offensive strategy. Most often it is implemented through processes of production diversification.

An offensive strategy is difficult to implement, involves risk, allows you to make a breakthrough in a narrow area, overcome the barrier of high costs and maintain a leading position for 2-3 years.

Offensive - defensive strategy. It is implemented in conditions of restructuring the organization’s activities, when it is necessary to correct its shaky position. In the context of a defensive strategy, there is a restructuring of all areas of the organization’s activities on the basis of strict centralization of its management. Typically, growth and moderate growth strategies are offensive in nature; offensive - defensive - combined strategy; purely defensive - a strategy of reducing activity.

seasonality profit competition strategy

2.1 History of the creation and development of the organization

"Wind Rose" is the first private travel company in Russia, founded in 1988. Located at Moscow, st. Letnikovskaya, 11/10, building 4.

This enterprise, in its organizational and legal form, is a limited liability company.

The main activity of the enterprise is tourism.

Currently, it is a large holding company consisting of an operator company, its own sales offices and franchise network agencies operating under the single brand “Wind Rose” in Russian cities.

Today, more than 200 travel agencies throughout Russia operate under the Wind Rose brand. Over 25 years of activity, she has acquired a lot of invaluable experience in serving Russian and foreign tourists, both abroad and in Russia.

The main activities of the company are:

Carrying out tourism activities both within the Russian Federation and abroad;

Organization and provision of visa support;

Registration of foreign passports;

Organization of individual and group tours;

Organization of transport services, including booking tickets for all types of transport;

Providing accommodation for tourists in any country in the world, including booking hotel rooms;

Organization of tours related to training and professional activities.

2.2 SWOT analysis

In order to get a clear assessment of the company's strengths and the market situation, there is a SWOT analysis.

SWOT analysis is the identification of the strengths and weaknesses of an enterprise, as well as opportunities and threats, and it provides a comprehensive assessment.

Internal factors

1. Strengths

Highly qualified specialists;

Reliable and regular suppliers;

Availability of sufficient financial resources;

Reducing prices with a high level of service and a strong competitive position will attract new competitors;

Ability to innovate, wide range of services;

Entering new markets;

Convenient location;

Long period of work on the market;

Good reputation from consumers.

2. Weaknesses

External factors

1. Opportunities

Entering markets of other regions;

Confidence in relation to competitors, high market growth;

Inflation rates;

Demographic conditions;

The arrival of new competitors;

3.1 Description of the current strategy of the organization

Mission is a definition of the list of areas of activity of the organization, the reason for the creation and functioning of this organization.

A well-formulated mission clarifies what the organization is, what it strives to be, and also shows how the organization differs from others like it.

The travel company "Wind Rose" organizes a wonderful vacation for its clients, providing various services and organizational programs. But, despite the economic situation in the country, the population uses the company’s services. The number of customers is constantly growing, and management predicts an increase in the number of repeat customers.

The company is confident in its popularity, since the tourist products offered to the buyer provide an opportunity to get acquainted with the history, traditions of the country, and look at its sights.

“Wind Rose” continues to take care of its clients and will create all the conditions for a good holiday abroad and within the country, expand the range of services and improve their quality.

MISSION OF THE TRAVEL COMPANY: “To satisfy the needs of clients at affordable prices with high-quality travel services that meet international standards.”

The organization has its existence thanks to the sphere of tour operator activities in domestic tourism, international outbound, international inbound, as it is unique and designed specifically for the consumer. Working with the most reliable and well-established partners, the travel agency provides its tourists with a high-quality and memorable vacation.

Provide stable and high-quality services;

Making a profit and growing income through the sale of tours and the organization of basic and additional services;

Improve the mechanism for motivating the quality of work of employees;

Increase the range of services and maintenance;

Establish partnerships with product suppliers.

4.1 Development of a strategic map of the organization

A strategy map is a diagram or drawing that describes a strategy in the form of a set of strategic goals and cause-and-effect relationships between them.

When developing the strategic map of Windrose LLC, strategic goals are determined for the following components: financial, customer, internal business processes, .

1. Financial component. Describes the tangible results of a strategy using financial indicators: revenue growth, productivity, increased revenue opportunities.

2. Client component. Defines the value proposition for customers. It determines strict compliance with the conditions, maintaining the company’s image, maintaining the client base, and attracting clients.

3. Internal business processes. Defines several business processes that create customer value and deliver it to customers.

4. Component of personnel training and organization development. They reflect how much the professional qualities of employees have been improved.

Table 1 Strategic goals of Wind Rose LLC

Components of the balanced scorecard	Strategic Goals
Financial component	Revenue growth Performance Expanding profit opportunities
Client component	The expansion of the customer base Strict compliance with conditions Be a market leader in new types of products or services
Component of internal business processes	Expansion of market sales Improving the quality of service Increase reliability Order fulfillment accuracy
Personnel training and organization development	Employee training costs Increasing qualified employees Percentage of qualified employees

Table 2. Strategic map of the travel agency “Wind Rose”

Financial component

Client component

Internal business processes

Personnel training and organization development

Conclusion

Today, the travel agency "Rose of the Winds" is one of the most famous travel agencies, as a large selection of various tours has a large client base. It is also a leading tour operator in Russia.

As a result of studying the theoretical features of strategic management, the role and importance of strategic management, and types of strategies were identified. And thus, the following mission of the travel agency “Wind Rose” was developed: “To satisfy the needs of clients at affordable prices with high-quality travel services that meet international standards.”

When conducting a SWOT analysis, which made it possible to identify the strengths and weaknesses of the travel agency’s activities in comparison with its competitors.

Weaknesses and threats of the travel agency:

The influence of seasonality on profit;

Inflation rates;

Possibility of economic crisis;

Level of competition in the travel agency industry;

Distribution of income of the population;

Demographic conditions;

The arrival of new competitors;

Changes in consumer tastes.

In conclusion of my course work, we can conclude that this travel agency, in my opinion, is well developed and exists through the sale of tours and the implementation of additional services.

Bibliography

1. Strategic management - B. T. Kuznetsov, 624 pp., Publisher: Unity-Dana, 2007

2. Lapin A. N. Strategic management of a modern organization / A. N. Lapin // Personnel Management. - 2004

3. Basovsky L.E. Management: textbook for universities / L.E. Basovsky. M.:INFRA-M, 2000.

4. Panov A. I. Strategic management: textbook. manual for university students studying in the specialty “Organization Management” / A. I. Panov, I. O. Korobeinikov. - M.: UNITY, 2004.

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Characteristics of the methodology for strategic planning of enterprise activities. Analysis of the strategic situation of the "Close People" Center: assessment of weaknesses and strengths, threats and opportunities for development, development of a target setting, analysis of competitors.

course work, added 01/20/2013


The concept of strategic competition, its varieties, principles and stages of implementation. M. Porter's model of five competitive forces: essence and content, directions of research. Development of proposals for improving competitive strategies.