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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