The IPS STRATEGIC PLANNING MODEL is an extremely powerful, yet extraordinarily easy to use software package, based on Excel and Visual Basic for Applications, that is designed to answer strategic questions in a quantitative way. In fact, it's so powerful that one person can run through dozens of scenarios involving millions of calculations in just a few minutes (see links at the left for a more detailed description of the model and how some utilities have used it). It automatically checks input numbers for reasonableness and has built-in intelligence that checks output for outlier data and consistency of assumption. These plus executive summaries that make heavy use of charts and graphs, one can quickly analyze a project without hunting down detailed reports. The improved quality of decision making will create great success and prevent mistakes. Taste it's power by examining the example below.
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After a day of discussions, the company's situational assessment is this:
Competition is fierce and sales are flattening. Our product is well established as a premium brand, yet our profit margin is declining. In addition, our expenses seem to have gotten a little out of control. And finally, we have been approached by a competitor who wants to merge. The time is 4:00 P.M. We're meeting again tomorrow at 8:00 am. We need answers to the following questions:
- When is new capacity needed?
- What is it's impact on the company?
- What if we build it and new sales do not materialize?
- 30% Gross Operating Margin
- 15% Net Return on Sales
- 20% Return on Equity
- 10% Return on Total Assets
- What's our company valued at?
- What's the other company valued at?
- What's a combined company valued at?
I go fire up the IPS Strategic Planning Model. I have already created a "BASE CASE" complete with fifteen year statements.
The first 4 questions are quantitatively analyzed in about 20 minutes. The last question regarding the merger took about an hour, most of which is developing a rough data set for the target company. I'm now ready for tomorrows meeting.
Of course in real life, I would try to anticipate all relevant questions and analyzed them before a strategic planning meeting.
The impact of these decisions on the company is huge. To be able to analyze them in a quantifiable way is the difference between success and failure.
How much is this capability worth?
For more information, contact us and receive a packet of additional information including reports and a Windows Media demonstration.
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