The Manager as a PlannerDeveloping a SWOT analysis

The Planning Process Planning-identifying and selecting appropriate

goals and courses of action for an organization Strategy-The cluster of decisions that

managers take to help a company reach its goals

Mission-a broad declaration of an organization’s purpose that identifies the companies products and customers and distinguishes the organization from the competition

Three Steps in Planning Determine the organization’s mission

and goals Formulating strategy-analyze the

current situation and develop strategies to achieve the mission

Implement strategy-allocate resources between groups to ensure the strategy is achieved

Levels and types of Planning Corporate Level Plan-top management’s

decisions regarding which industries, and national markets a company intends to compete

Business Level Plan-developing long term goals indicating how a division intends to compete against its rivals in the industry

Functional Level Plan-indicates how a function intends to achieve the goals of a division or business level

Time Horizons of Plans Long Term Plans-5 years or more Intermediate Plans-1-5 years Short term Plans-less than one year Corporate and business level plans are

long and intermediate Functional plans are short to

intermediate Most organizations have a rolling

planning cycle

Types of Plans Standing Plans-use in programmed

decision situations such as policies, rules, or standard operating procedures (sop)

Single use plans-developed for a one time, non programmed issue

Why Planning is Important Planning ascertains where the organization is

now and where it will be in the future Participation-all managers are involved in

setting goals Sense of direction-sets goals and strategies

for managers Coordination-how the system fits within the

company Control- who is responsible for achieving

goals

Scenario Planning Scenario Planning (Contingency

Planning)-generating multiple forecasts of future conditions followed by an analysis of how to respond to each condition

Effective Plans have1. Unity=1 plan2. Continuity-ongoing plan3. Accuracy-factual information4. Flexible-adjust plans as necessary

Determine Mission and Goals Define the business-Who are customers?

What needs are being satisfied? Establish major goals-provides a sense

of direction and stretches the organization to higher levels of performance. Goals must be challenging but realistic

Formulating Strategy Managers analyze the current situation

to develop strategies for achieving the mission

SWOT analysis- a planning exercise in which managers identify company strengths, weaknesses, and external opportunities and threats

Five Forces Model Level of competition Potential for Entry Power of suppliers Power of customers Substitutes

Formulating Corporate Level Strategies Concentration in a single business Related diversification Unrelated diversification International expansion

1. Global-selling the same product in all countries

2. Multidomestic-customizing products to specific national conditions

Vertical Integration Vertical Integration-allowing an

organization to create value by producing its own inputs or distribution its own products Backward integration-seeks to reduce its

input costs by producing its own inputs Forward integration-distributes its own

outputs to lower distribution costs

Business and Function Level strategies Business-low cost or differentiation Functional-seeks to have each

department add value by lowering costs or adding new value by:1. Attaining superior efficiency2. Attaining superior quality3. Attaining superior innovation4. Attaining superior responsiveness to

customers

Planning and Implementing Strategy1. Allocate implementation responsibility

to appropriate individuals2. Draft detailed action plans3. Establish a timetable for

implementation4. Allocate resources5. Hold specific groups responsible for the

attainment of goals