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PCB-Oct2016

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62 The PCB Magazine • October 2016 1) user needs segments, and 2) sources of your competitive advantage to answer the question "where do we focus and how do we win?" Step 2—Specific Objectives to Achieve Over a Five Year Period The specific objectives translate the state- ment of purpose into achievable milestones for each function. These milestones represent the basis for formulating specific action plans by function. It answers the question of which functions own which critical commitments? Step 3—Description of Customers and Channels of Distribution A description of user segmentation and a ranking of priorities with respect to target seg- ments. Fundamental to this section is a rigor- ous, fact-based analysis of end-user, customer, and channel needs, and a detailed understand- ing of the purchasing process. At its simplest level, a user needs segment represents the intersection of an industry and an application. Although you may be most ef- ficient in providing only part of the end-user solution, all parts of the solution must be evalu- ated in determining your positioning for maxi- mum competitive advantage. The end product of this section is an understanding of how to differentiate your products and services in key target segments based upon user needs. The most difficult part of the process is seg- mentation. All possible segmentation variables are useful for driving imaginative solutions. Segmentation continues until your idea emerg- es as the segment leader or has a competitive advantage to become the segment leader. Step 4—Description of Competition The competitive analysis includes 1) an identification of competitors selling to (or plan- ning to sell to) the target customer segments; 2) measurement of competitor presence by seg- ment over time; 3) an assessment of your and competitors' capabilities for addressing the needs of the segments; and 4) a determination of capability gaps for you to overcome in gain- ing a competitive advantage. Changes in competitive position must be understood on a segment basis. Competitive strategies must be understood on a segment lev- el. If your idea leads a segment, barrier points must be established. If your idea is pursuing a segment, entry points must be discovered. Size and growth of segments determine the nature of investments; competitive advantage deter- mines your ability to recover investments. Note: Steps 3 and 4 tend to be iterative since the plan must provide a segmentation that is internally consistent and provides criteria that permits your idea to win (Figure 1). Step 5—Description of Necessary Products and Services Description of the products and services the business unit must provide (either on its own 10-STEP BUSINESS PLAN PROCESS Figure 1: Eighty percent of the effort in proposing a product is the research into competitors and differentiating user needs and your competitive advantage, by applications. (Source: HP 10-Step Process, internal document)

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