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57 Cards in this Set
- Front
- Back
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Planning |
-The process of setting objectives and determining how to best accomplish them -If planning is done properly it sets the stage for organizing, leading and controlling |
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Plan |
-statement of action - steps to be taken in to order to accomplish objectives |
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Objectives |
specific results someone intends to achieve |
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Good objectives = |
SMART |
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Planning Process (1) |
Define your objectives (using the SMART criteria) |
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Planning Process (3) |
Anticipate future events What could happen while trying to meet the objective? How will these “scenarios” help or hinder your progress? |
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Planning Process (4) |
Create, analyze and choose among optionsList and carefully evaluate the possible actions that may be taken to meet the goal Choose the option most likely to accomplish your objectives |
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Planning Process (2) |
Determine where you stand today with regards to the objectives What strengths work in your favour?What weaknesses hold you back? |
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Planning Process (5) |
Implement the chosen option and evaluate results |
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Benefits of planning |
Focus – sets goals, sets priorities, determines the needs of the customer, provides a unified direction Flexibility – deals with changing situations, helps cope in a changing economy Action Orientation – Staying ahead of the competition and always improving Increased coordination – sets a series of objectives; lower level objectives support higher level objectives Improved control – ability to identify and measure results Improved time management – sets priorities for employees’ time |
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Effective Planning |
include input from employees and managers alike makes them feel part of the plan short term and long term higher management = focus on long term short term - 1 year or less intermediate - 1 to 2 years long term - 3 years + |
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Types of business plans |
Strategic plans tactical plans functional/ operation plans
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Strategic plans |
Extensive, long range Created by highest levels of management Provides the overall direction of the company Example—launching a product into another country |
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Tactical plans |
Define what needs to be done in specific functions/areas to implement strategic plans.Production plans Financial plansFacilities plansMarketing plansHuman resource plans |
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Functional/Operational plan |
Identify short-term activities to implement strategic plans |
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Policy vs Rule |
Policy - Broad guidelines for making decisions and taking action in specific circumstances.Rules or procedures - Plans that describe exactly what actions are to be taken in specific situations. |
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Budget |
Single-use plans that commit resources to activities, projects, or programs |
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5 Types of Budgets |
Financial Operating Non-monetary Fixed Flexible Zero-based budgeting |
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Forecasting |
Making assumptions about what will happen in the future Qualitative forecasting uses expert opinions Quantitative forecasting uses mathematical and statistical analysis All forecasts rely on human judgment Planning involves deciding on how to deal with the implications of a forecast |
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Contingency planning: |
Identifying alternative courses of action that can be implemented if circumstances change Contingency plans anticipate changing conditions |
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Scenario planning: |
A long-term version of contingency planning Identifying alternative future scenarios Plans made for each future “worst-case” or “best-case” scenario |
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Benchmarking: |
Use of external and internal comparisons to better evaluate current performance and identify possible actions for the future Adopting best practices of other organizations that achieve superior performance |
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Participatory planning |
requires that the planning process include people who will be affected by the plans and will implement them |
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Benefits of participatory planning |
promotes creativity increase available information fosters understanding, acceptance, and commitment to the final plan |
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Competitive advantage |
operating with an attribute or set of attributes that allows an organization to outperform its rivals. Cost and quality Knowledge and speed Barriers to entry Financial resources |
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Sustainable competitive advantage: |
one that is difficult for competitors to imitate. |
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Strategy |
a comprehensive action plan that identifies long-term direction for an organization and guides resource utilization to accomplish organizational goals with sustainable competitive advantage. |
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Strategic intent |
focusing all organizational energies on a unifying and compelling goal. |
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Strategic management |
the process of formulating and implementing strategies to accomplish long-term goals and sustain competitive advantage |
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Strategic analysis |
process of analyzing the organization, the environment, its competitive position and current strategies |
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Strategy formulation: |
the process of crafting strategies to guide allocation of resources |
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Strategy implementation: |
putting strategies into action |
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Strategic Management Process |
Identify a mission statement Identify past/present strategies Diagnose past/present performance Set goals Establish/follow policies, rules and procedures Perform a SWOT/Pest analysis The reason for an organization’s existenceInspire employeesReinforces shared value Should be Brief, Explanatory, Effective An important test of the mission is how well it serves the organization’s stakeholders |
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Analysis of core values: |
Values are broad beliefs about what is or is not appropriate Organizational culture reflects the predominant value system of the organization as a whole |
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Strong core values: |
Helps build organizational identity Gives character to the organization in the eyes of employees and external stakeholders Backs up the mission statement Guides the behaviour of organizational members in meaningful and consistent ways |
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Observable Culture: |
Visible actions and events Heroes Ceremonies, rites, rituals Legends and stories Metaphors and symbols Core Culture:Underlying valuesInnovation and risk-taking Ethics and integrity Social responsibility Customer service Performance and teamwork |
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Once the company knows who they are, what they stand for and have established their objectives the next step is to….. |
ANALYZE THE ORGANIZATION AND ITS ENVIRONMENT SWOT PEST |
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SWOT Analysis |
Strength Weaknesses Opportunities Threats |
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Strengths |
Manufacturing efficiency? Skilled workforce? Good market share? Strong financing? Superior reputation? |
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Weaknesses |
Outdated facilities? Inadequate research and development? Obsolete technologies? Weak management? Past planning failures? |
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Opportunities |
Possible new markets? Strong economy ?Weak market rivals? Emerging technologies? Growth of existing market? |
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Threats |
New competitors? Shortage of resources? Changing market tastes? New regulations? Substitute products? |
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PEST |
Political Economical Social Technological |
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Political |
laws and regulations, government policies. |
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Economic |
general environment influenced by customer spending, resource supplies, and investment capital. |
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Social |
norms, customs, social values, gender roles. |
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Technological |
developments in technology and the edge of another technology revolution. |
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Grand Strategies |
Long range, developed at upper mgmt. levels (i.e. STRATEGIC PLANS) Provide overall direction for the company and deal with the most important aspects of the company’s operations: Products and servicesNumber of employees Money spent on salaries and benefits Marketing of products |
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Growth Strategy |
Goal is to expand sales, products, or number of employees |
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Concentration Strategy |
extends sale of current products/ services into the current market |
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Vertical Integration |
company moves into a market it previously served as either a supplier or customer |
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Diversification |
company moves into a similar type of business with new/different products or services Diversification – New York Fries founder recently created South Street Burger Co.“South St. Burger Co. came about initially as an expansion strategy for the New York Fries brand ” – Jay Gould3091163bin |
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Stability Strategy |
A plan to keep the company operating at the same level it has for several years Company is satisfied with profits and is not seeking growth (or cannot afford to) |
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Renewal/Retrenchment Strategy |
Also known as a Defensive strategy A plan to reverse negative trends in the company4 most popular types: Restructuring correct weakness by changing the mix Turnaround focuses on fixing specific performance problems Downsizing decrease the size of the operation, usually by reducing the workforce Divestiture is when a company sells part of its business, usually an unprofitable part or not in the major line of business |
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Turnaround example |
McDonalds realization they were missing the coffee boom led by Tim Hortons and Starbucks “Turnaround” business by creating “Plan to Win” strategy where they converted their restaurants to have a coffee house atmosphere (wifi, fireplace) |
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Combination Strategy |
A plan that involves several strategies at once Most businesses cannot afford to use all the strategies that might benefit them, therefore they must set priorities Ex. Coca-Cola used a combination strategy in 1989 when it sold Columbia Pictures (divestiture) while expanding its soft drink and orange juice lines (growth) |
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Divestiture: example |
in 1998, DaimlerChrysler was formed when Daimler-Benz merged with the Chrysler Corporation In 2007, the Chrysler branch was sold off to a NY equity firm for ‘restructuring’ |
