PLANNING Group 1:

MarlinaHenryCicilyaSamuel

Aldo

An overview of the planning process

Planning : identifying and selecting appropriate goals and courses of action for an organizations.

Strategy : a cluster of decisions about what goals to pursue, what actions to take, and how to use resources to achieve goals.

Thus, planning is both a goal making and a strategy making process.

Mission statement : a board declaration of an organization’s purpose that idebtities the organization’s products and distinguishes the organization from its competition.

Levels of planning

Corporate level plan ( CEO, Corporate officer)

Top management’s decisions pertaining to the organization’s mission, overall strategy, and strucrure.

Strategy: a plan that indicates in which industries and national markets an organization intends to compete

Business level plan

Divisional managers decisions pertaining to divisions long term goals,overall startegy and structure

Startegy : a plan that indicates how a division intends to compete againts its rivals in ana industry.

Divison : a business unit that has its own set of managers and functions or departments and competes in a distinct industry.

Divisional managers: Managers who control the various of an organizations.

Functional level plan

Functional managers decisions pertaining to the goals that functional managers purpose to pursue to help the division attain its business level goals.

Strategy : a plan that indicates how a functuion intends to achieve its goals.

Function: a unit or department in which people have the same skills or Function: a unit or department in which people have the same skills or use the same resources to perform their jobs.use the same resources to perform their jobs.

Functional managers: managers who supervise the various functions, Functional managers: managers who supervise the various functions, such as manufacturing, accounting and sales, within a division.such as manufacturing, accounting and sales, within a division.

Time horizons of plans

Long-term plans ; five years or more

Corporate and business level plans and goals Intermediate-term plans ; between 1 and 5 years

Corporate and business level plans and goals Short-term plans ; one year or less

business and functional level plans and goals

ROLLING PLAN

Allows managers to plan flexibly. To change the thrust of the plan altogether if it no longer seems appropriate.

Standing and single use plansto achieve an organization’s specific goals

Standing plans

used in situations in which programmed decision making is appropriate. e.g ; standing plan about ethical behaviour by employees.

Single use plans

Developed to handle nonprogrammed decision making in unusual or one of a kind situations.

WHY planning is important ?

Planning is useful way of getting managers to participate in decision making about the appropriate goals and strategies for an organization.

Planning is necessary to give the organization a sense of direction and purpose.

A plan helps coordinate managers of the different functions and divisions of an organization to ensure that they all pull in the same direction.

A plan can be used as a device for controlling managers within an organization.

According to Henri Fayol, Effective plans should have 4 qualities ; unity, continuity, accuracy, and flexibility

SCENARIO PLANNING OR CONTIGENCY PLANNING

The generation of multiple forecast of future conditions followed by an analysis of how to respond effectively to each of those conditions.

e.g : scenario planning at SHELL

3 steps in planning :

1. Determining the organization’s mission and goals ( define the bisiness establish major goals)

2. Formulating Straregy ( analyze current situation and develop startegies)

3. Implenting strategy (allocate resources and responsibilities to achieve startegies)

Determining the organization’s mission and goals Defining its business managers need to ask 3 questions to know its business ;WHO ARE OUR CUSTOMERS?WHAT CUSTOMER NEED ARE BEING SATISFIED?HOW ARE WE SATISFYING OUR CUSTOMER NEEDS?e.g: Seattle city light define its business as ‘the generation and

transmission of electricity’, then SCL redefined their business as ‘the provision of energy and energy-related services’ ( energy conservation service).

Establishing major goalsManagers must establish a set of primary goals to which the

organization is commited.

Formulating Straregy

Is a analysis of an organization’s current situation followed by the development of stategies to accomplish its mission and achieve its goals.

There are 2 techniques use to analyze:

1. SWOT analysis

A planning exercise to identify strengths and weakness inside an organization and opportunities and threats in the environment.

SWOTanalysis

Corporate level startegyA plan of action to manage the growth and

development of an organization so as to maximize its long-run ability to create value.

Business-Level StrategyA plan of action to take advantage of favorable opportunities and find ways to counter threats

so as to compete effectively in an a industry

Functional-Level StrategyA plan of action to improvethe ability of anOrganization’s departments to create value

2.The 5 forces model (Michael Porter)5 major threats:

The levels of rivalry among organizations in a industry(low prices mean lesss profit)

The potential for entry into an industry The power of suppliers(few suppliers – drive up price – expensive – lower price)

The power of customers(few custmers – bargain price – lower price)

The threats of substitute products(companies that produce a product with a known substitute canot

demand high prices for their products)

Formulating corporation-level Strategies

the principal corporate level strategies that managers use to help a company grow, to keep it on top of its industry, and to help it retench and reorganize in order to stop its decline are:

1. Concentration on a single business2. DiversificationThe strategy of expanding operations into a new business or industry and

producing new goods or services.• Related Diversification• Unrelated Diversification3. International expansion• Global strategy• Multidomestic strategy4. Vertical integrationA strategy that allows an organization to create value by producing its own

inputs or distributing and selling its own outputs. Eg; Pepsi -Taco bell, Pizza Hut, KFC

Formulating business-level Strategies

Low cost strategydriving the organization’s costs down below the costsof its rivals. Differentiation strategyDistinguishing an organization’s products from the products of

competitors in dimension such as product design quality or after sales sevice.

Focused Low costServing only one segment of the overall market and being the

lowest cost organization serving that segment. Focused differentiationServing only one segment of the overall market and trying to be

the most differentiated organization serving that segment.

Formulating functional-level Strategies

• Is a plan of action to improve the ability of an organization’s department to create value.

• Two ways for adding value to an organization :1.dept.manager can lower the costs of creatingvalue. So that can

attract cust by keeping its prices lower than competitor’s prices.2.dept.manager can add value to a product by finding ways to

differentiate it from the products of other companies.• 4 goals managers should attend in adding value or lower the

costs:-to attain superior efficiency-to attain superior quality-to attain superior innovation-to attain superior responsiveness to customers

Implementing strategy

Five-steps process :

1. Allocating responsibility for implementation to the appropiate individuals or groups.

2. Drafting detailed action plans that specify how a strategy is to be implemented.

3. Establishing a timetable for implementation that includes precise, measurable goals linked to the attainment of the action plan.

4. Allocating appropiate resources to the responsible individuals or groups

5. Holding specific individuals or groups responsible for theattainment of corporate,divisional,and functional goals.

THE END