Considerations for the formulation and monitoring of business plans


In modern financial management, the concept of Economic Value Added (EVA) is the one that allows business strategies and corporate finance to be linked.

Investments are made based on these strategies, and are aimed at increasing or adding value to the company.

This value creation approach, used by the most successful international corporations to make investment decisions, is perfectly applicable to Peruvian companies, regardless of their size, which is why we believe that every Business Plan proposal must have a solid basis in a Value Creation Strategy, for the client and for the company's partners.

The core elements of this Strategy, which covers the product, geographical and business areas, must be contained in the company's definition of its Mission, framed in its Purpose; and it will be precisely the realization of this Mission, through the Execution of the Strategy, which will lead it in time to the achievement of its Vision, so the Business Plan must be conceived as the tool that supports the Execution of the Strategy.

Consequently, its formulation must be based on a strategic analysis of the business, in an environment that is increasingly dynamic and competitive, where companies no longer only compete against other companies in the same line of business, but also against other industries, and even against other disruptive business models that can significantly change their position in the market.

This characteristic of today's economy, in which competition is global and can appear from anywhere, forces us, according to Rita Günther, professor at Columbia Business School, to rethink the traditional strategy process, focused on planning and seeking sustainable competitive advantages, which are not sustainable for long given the hyper-competitive environment in which businesses operate.

In this regard, Professor Günther proposes to stop focusing the strategy on rigorous and super-detailed planning, and move to a Strategic Learning Model, which is schematized in the following graph:

This model leaves aside the typical prediction orientation of planning to be oriented towards discovery, sifting the accumulated knowledge and experience in the light of new market trends, in order to discriminate what we should unlearn, and what we should learn from these new trends in order to:

  • To discover "insights" before others, about future consumer behavior, and on this basis,
  • quickly generate strategic alternatives, which allow the selection of a "successful" proposal and,
  • Align the organization to put it into action as soon as possible (execute and experiment), to start the cycle again.

In other words, the model proposes as a path for companies to be successful: i) discover and capture opportunities very quickly, ii) take advantage of them decisively, and iii) move to the next step before everyone else.

And to follow this path, the Business Plan must be a "living" document that adjusts over time to the changing circumstances of the environment, and that is incorporated into the company's financial planning and analysis model through metrics (KPIs) that facilitate its monitoring and control.

How can HLB PERU help?

 HLB PERU has a staff of financial consultants with expertise in strategic financial analysis and planning, who can act as facilitators of the strategic business analysis process, in order to identify: i) the key success factors or conditions that must be met with excellence to satisfy the client, ii) the key processes, and iii) the investments necessary to develop those key processes and achieve the market positioning that Ensure the achievement of company goals.

Based on the above, we can help you develop the Business Plan and incorporate into your financial model (or develop it) a set of metrics (KPIs) and dashboards to monitor its execution.

Our Consultation Departmentis ready to assist you, please contact us.

Jonny Mayandía

Associate Consultant at HLB PERU

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