The Controlling Concept. Horváth & Partners Management Consultants

Чтение книги онлайн.

      Fig. 1.9:7C Principle

      Another approach to appraising a business model is offered by the 7C Principle developed by Horváth & Partners (cf. Fig. 1.9). At the heart of this principle is the strategic core of the company which comprises the basic decisions of the company. These decisions concern defining the product portfolio, selecting the target customers and markets, and utilising the core competences. The other elements “circle” the strategic core and their correlations must be investigated and defined.

      •Customer perception: Customer perception focuses on those design aspects which take place in particular in the minds of the customers, in their perception. This includes market-related value proposition, positioning on the market and the type of brand utilisation including the instruments of communication used.

      •Customer interface: The customer interface consists of those decisions which determine the direct interaction with the customer. This includes sales channels, the earnings model (i. e. clarification of precisely what the customer is willing to pay for), customer loyalty concepts (e. g. via contracts, bonus programmes or personal relationship) and the design of the customer service.

      •Value Chain: The value chain addresses the method of producing the good or service and looks at the core services and service level, existing (production) locations and how they are networked, and (production) procedures used.

      •Cooperation partners: Within this dimension of the business model we define who the company cooperates with and how that cooperation takes place. Alongside working together with suppliers, both alliances and affiliations (including M&A activities) play an important role.

      •Concepts for the future: At the core of this design field is the analysis of the main focus of innovation, the definition of the dynamics of innovation in the sense of timing (e. g. first mover versus early follower), and decisions relating to the depth of innovation, thereby answering the question of whether external partners are integrated into the different phases of the innovation process.

      •Human capital: The human capital component of the business model focuses on the personnel and knowledge structures of the company, as well as aspects relating to corporate culture.

      The business model influences the House of Controlling in different ways. Firstly, the business model, strategy and strategic planning complement one another. In simple terms, this can be described as follows. The business model describes the customer-centric architecture of the business; the strategy and strategic planning focus on maintaining competitiveness and ask questions about the company’s unique selling proposition (USP). Against this background, the business model also forms the basis for, for example, financial plans and budgets.

      Changes in the market due to company-specific environmental factors (e. g. new competitors, new technologies, changes in customer behaviour) make it imperative to continually evaluate the business model and, if necessary, to develop it. Only in this way can a company prepare itself in time for changes and maintain or develop its own competitive position.

      Fig. 1.10:Porter’s Five Forces (Porter and Heppelmann 2014)

Do you systematically map the factors which affect the environment your company operates in (e. g. using 5 Forces)?

      Thus, the design of the House of Controlling is also heavily dependent upon the company-specific environmental factors. We can use Porter’s Five Forces (Porter and Heppelmann 2014) to systematically map a company’s environment. This can help companies to describe and understand their own environment based on five competitive forces (cf. Fig. 1.10). These forces influence the profitability of a company. The stronger the forces are, the more difficult it is for a company to be profitable in its industry.

      Each individual competitive force has a different impact on the company and, in the final analysis, on the House of Controlling.

      •Competition from existing and new companies and from substitutes:

      The intensity of competition describes how strong the rivalry is within a market or an industry. If competition between the existing companies is intense or if it becomes more intense due to new entrants or substitute products, corporate management must think about expanding or changing their portfolio (entirety of all products and services) or about changing the technologies they use (equipment, procedures and methods for producing the goods and services).

      Here, the impacts of the portfolio on Controlling are manifold: Controlling must design the concept for information supply and reporting which enables the company to take decisions on streamlining or expanding their products and services. The broader and deeper the portfolio is, the more complex this task becomes.

      For their part, the technologies used affect above all the cost estimation procedure and reporting. Additionally, the controller must use investment appraisal and planned earnings analyses to provide the basis for taking decisions on technology changes.

      •Bargaining power of customers:

      The customer is defined as all current and potential buyers of a company’s products and services (portfolio). The bargaining power of customers also influences the competitive situation on the marketplace. Customers with high bargaining power can have a strong influence on the price and sales conditions.

      If the customer is a critical success factor for the company, this should be reflected in the Controlling system. In such a case, the reporting system in particular should have a strong market focus and contain the most important market-related information and KPIs (e. g. market share, sales figures, customer structure, customer satisfaction). СКАЧАТЬ