The Manager as a Planner

1. The Manager as a Planner Developing a SWOT analysis

2. 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

3. 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

4. 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

5. 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

6. 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

7. 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

8. 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 have • Unity=1 plan • Continuity-ongoing plan • Accuracy-factual information • Flexible-adjust plans as necessary

9. 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

10. 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

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

12. Formulating Corporate Level Strategies • Concentration in a single business • Related diversification • Unrelated diversification • International expansion • Global-selling the same product in all countries • Multidomestic-customizing products to specific national conditions

13. 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

14. 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: • Attaining superior efficiency • Attaining superior quality • Attaining superior innovation • Attaining superior responsiveness to customers

15. Planning and Implementing Strategy • Allocate implementation responsibility to appropriate individuals • Draft detailed action plans • Establish a timetable for implementation • Allocate resources • Hold specific groups responsible for the attainment of goals