PowerPoint Presentation

BUSINESS PLANNING PROCESS

PRESENTATION FOR MEMBERS OF ICAI DUBAI CHAPTER

24th October 2015

OBJECTIVES OF BUSINESSProfitability: sole motive of business; all other objectives are subservient to profit motiveSurvival: function of nature of ownership, nature of business competence of management, general and industry conditions, financial strength of the enterprise, etc.Stability: cautious and conservative objectiveGrowth: increase in assets, manufacturing facilities, increase in sales volume Efficiency: doing things in best possible manner; utilizing resources in a most suitable combination to get highest productivity

BUSINESS PLANNING PROCESS

FRAMEWORK OF STRATEGIC MANAGEMENTStage One: Beginning starting point Where are we now? situational analysis in the environmental context SWOT AnalysisStage Two: End destination Where we want to be? vision and missionStage Three: Means How to get there?Stage Four: Evaluation Which is the best way? SWOT AnalysisStage Five: Control How can we ensure arrival at the destination?

STRATEGIC PLANLong TermBig PictureEnvironmental ScanVision WhatMission WhyCore Values - How

COMPONENTS OF BUSINESS ENVIRONMENTExternal factors outside the organisation which provides opportunities or poses threatsInternal factors within the organisation which impart strengths or cause weaknesses of a strategic nature

PESTLE ANALYSISP Political political stability, ideologies, taxation policy, regulatory bodies, government policies, government term and change, thrust areas of political leadersE Economic situation, trends, market and trade cycles, specific industry cycles, end-user drivers, interest and exchange rates, inflation and unemployment, consumer spendingS Socio-cultural lifestyle trends, demographics, attitudes and opinions, brand image, buying patterns, ethnic/religious factors, media views and perceptionT Technological replacement technology, maturity of technology, manufacturing maturity, innovation potential, technology access, licensing, patents, intellectual property rightsL Legal business and corporate laws, employment law, competition law, health & safety law, international treaty and law, regional legislationE Environmental ecological/environmental issues, environmental hazards, environmental legislation, energy consumption, waste disposal

VISIONVision is the ultimate goal, dream and the guiding star of the OrganisationNIKE"To bring inspiration and innovation to every athlete* in the world"

* If you have a body, you are an athlete.TOYS R US"Our Vision is to put joy in kids hearts and a smile on parents faces."AMAZON"Our vision is to be earth's most customer centric company; to build a place where people can come to find and discover anything they might want to buy online."IKEAIkeas Vision Affordable solutions for better living.

MISSIONMission is focused on present business scope who we are and what we do the reasons for our existenceMission describes who our customers are and what we produce as outcome for themMission amplifies what brings the firm to this business or why it is there, what existence it seeks and what purpose it seeks to achieve as a business firmMission defines the role that an organisation plays in the societyMission should be inclusive to include all stakeholders

CORE VALUESDescribes how the business should be conductedDesired culture of the organisationPrinciples that guide the behaviour of the people involved in the organisation

EXPECT THE UNEXPECTED

ANNUAL BUSINESS PLANStrategies/GoalsAction Plan who, who else, what support, by when, measurement criteria, statusInfrastructure requirementsResources RequiredOrganisation Structure (good for atleast two years)

AMAZING SENTENCEI do not know where family doctors acquired illegibly perplexing handwriting; nevertheless, extraordinary pharmaceutical intellectuality counterbalancing indecipherability transcendentalizes intercommunication's incomprehensibleness.

DISRUPTIVE INNOVATION

PORTERS FIVE FORCES MODELCompetitive Analysis five forces model of competitionThe five forces are:Rivalry among existing firmsNew entrantsSubstitute productsSuppliers bargaining powerCustomer bargaining power

STRATEGYShutting doors first and then keeping only one door open

Strategy seeks to relate the goals of the organization to the means of achieving themStrategy is partly planned and partly reactive

LEAD OR FOLLOW

COMPETE OR COLLABORATE

MERGER/ACQUISITION

GROW OR SHRINK

DIVERSIFICATION

FINANCIAL BUDGETRevenue PlanWorking Capital CycleCash Flow StatementStatement of Profit or LossStatement of Financial PositionAssumptions and Milestones

BUSINESS PLAN PACKAGEStrategic PlanAnnual Business PlanOrganisation StructureAssumptions and MilestonesRisk AssessmentFinancial Budget

Key to success: Monthly Review of the Plan Vs. Actuals to take corrective actions, if any

WARREN BUFFETTS RULES

Rule No.1 Do not lose any of your shareholders moneyRule No.2 Do not forget rule No.1

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