Explanations — Information on Rules/Procedures — Suggestions and Tips
The 3-year strategic plan involves:
1. Stating a strategic vision for your company.
2. Establishing objectives for EPS, ROE, credit rating, image rating, and stock price appreciation each of the next
three years.
3. Declaring what competitive strategy your company intends to pursue.
4. Preparing operating projections for the each of the next three years based on your projections of unit sales,
revenues, costs, and profits in each of the four geographic regions during each year of the plan period.
The purpose of the 3-year plan is to encourage company management to think ahead and consider what prices, sales
volumes, and market shares it will take to meet or beat the targeted levels of performance that shareholders are
expecting (and that are built into the Investor Expectations scoring standard). The planning process prompts you to
think about likely market conditions in the years ahead, to worry about what competitors on average are likely to be
doing, and to project what specific prices, sales volumes, market shares, per pair costs, and profit margins it will
probably take to achieve the target strategic and financial objectives. Doing a 3-year plan, thus, pushes you to think
strategically about your company's present position and future prospects, to do some industry and competitive analysis
(as discussed in the text chapters), and to wrestle with any strategy changes that may need to be considered.