Case | Translate a strategic plan into a financial plan

PROBLEM

The management of a medium-sized technology company wants to assess the financial implication of their strategic options for the next years.  They want to identify the financial results and cash flows of these strategic options. 

RESULTS

horsum guided them in several steps.

First, horsum thoroughly discussed the strategic options with the management. Then horsum analyzed the financial figures. Next, they interviewed employees of the sales, marketing, production and R&D departments. These exercises enabled the management and horsum to quantify the strategic options (market size, expected sales in units, production costs,…).

Further, horsum used these interviews and analyses to create a dynamic financial model which included a case (e.g. the assumption of a status quo of the company) as the different strategic options. Based on this model, the management could clearly understand and evaluate the impact of each strategic option on the financial result and cash flow. The model was designed dynamically so the impact of changes in certain variables and various scenario analyses could be immediately assessed.

Thanks to the financial model horsum developed, the management clearly understood the impact of their strategic options. This facilitated their decision for the “right” strategic options.