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  1. 1. PLANNING Group 1: Marlina Henry Cicilya Samuel Aldo
  2. 2. An overview of the planning process <ul><li>Planning : identifying and selecting appropriate goals and courses of action for an organizations. </li></ul><ul><li>Strategy : a cluster of decisions about what goals to pursue, what actions to take, and how to use resources to achieve goals. </li></ul><ul><li>Thus, planning is both a goal making and a strategy making process. </li></ul><ul><li>Mission statement : a board declaration of an organization’s purpose that idebtities the organization’s products and distinguishes the organization from its competition. </li></ul>
  3. 3. Levels of planning <ul><li>Corporate level plan ( CEO, Corporate officer) </li></ul><ul><li>Top management’s decisions pertaining to the organization’s mission, overall strategy, and strucrure. </li></ul><ul><li>Strategy: a plan that indicates in which industries and national markets an organization intends to compete </li></ul>
  4. 4. <ul><li>Business level plan </li></ul><ul><li>Divisional managers decisions pertaining to divisions long term goals,overall startegy and structure </li></ul><ul><li>Startegy : a plan that indicates how a division intends to compete againts its rivals in ana industry. </li></ul><ul><li>Divison : a business unit that has its own set of managers and functions or departments and competes in a distinct industry. </li></ul><ul><li>Divisional managers: Managers who control the various of an organizations. </li></ul>
  5. 5. <ul><li>Functional level plan </li></ul><ul><li>Functional managers decisions pertaining to the goals that functional managers purpose to pursue to help the division attain its business level goals. </li></ul><ul><li>Strategy : a plan that indicates how a functuion intends to achieve its goals. </li></ul><ul><li>Function: a unit or department in which people have the same skills or use the same resources to perform their jobs. </li></ul><ul><li>Functional managers: managers who supervise the various functions, such as manufacturing, accounting and sales, within a division. </li></ul>
  6. 6. Time horizons of plans <ul><li>Long-term plans ; five years or more </li></ul><ul><li>Corporate and business level plans and goals </li></ul><ul><li>Intermediate-term plans ; between 1 and 5 years </li></ul><ul><li>Corporate and business level plans and goals </li></ul><ul><li>Short-term plans ; one year or less </li></ul><ul><li>business and functional level plans and goals </li></ul><ul><li>ROLLING PLAN </li></ul><ul><li>Allows managers to plan flexibly. To change the thrust of the plan altogether if it no longer seems appropriate. </li></ul>
  7. 7. Standing and single use plans to achieve an organization’s specific goals <ul><li>Standing plans </li></ul><ul><li>used in situations in which programmed decision making is appropriate. e.g ; standing plan about ethical behaviour by employees. </li></ul><ul><li>Single use plans </li></ul><ul><li>Developed to handle nonprogrammed decision making in unusual or one of a kind situations. </li></ul>
  8. 8. WHY planning is important ? <ul><li>Planning is useful way of getting managers to participate in decision making about the appropriate goals and strategies for an organization. </li></ul><ul><li>Planning is necessary to give the organization a sense of direction and purpose. </li></ul><ul><li>A plan helps coordinate managers of the different functions and divisions of an organization to ensure that they all pull in the same direction. </li></ul><ul><li>A plan can be used as a device for controlling managers within an organization. </li></ul>
  9. 9. According to Henri Fayol, Effective plans should have 4 qualities ; unity, continuity, accuracy, and flexibility <ul><li>SCENARIO PLANNING OR CONTIGENCY PLANNING </li></ul><ul><li>The generation of multiple forecast of future conditions followed by an analysis of how to respond effectively to each of those conditions. </li></ul><ul><li>e.g : scenario planning at SHELL </li></ul>
  10. 10. 3 steps in planning : <ul><li>Determining the organization’s mission and goals ( define the bisiness establish major goals) </li></ul><ul><li>Formulating Straregy ( analyze current situation and develop startegies) </li></ul><ul><li>Implenting strategy (allocate resources and responsibilities to achieve startegies) </li></ul>
  11. 11. Determining the organization’s mission and goals <ul><li>Defining its business </li></ul><ul><li>managers need to ask 3 questions to know its business ; </li></ul><ul><li>WHO ARE OUR CUSTOMERS? </li></ul><ul><li>WHAT CUSTOMER NEED ARE BEING SATISFIED? </li></ul><ul><li>HOW ARE WE SATISFYING OUR CUSTOMER NEEDS? </li></ul><ul><li>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). </li></ul><ul><li>Establishing major goals </li></ul><ul><li>Managers must establish a set of primary goals to which the organization is commited. </li></ul>
  12. 12. Formulating Straregy <ul><li>Is a analysis of an organization’s current situation followed by the development of stategies to accomplish its mission and achieve its goals. </li></ul><ul><li>There are 2 techniques use to analyze: </li></ul><ul><li>SWOT analysis </li></ul><ul><li>A planning exercise to identify strengths and weakness inside an organization and opportunities and threats in the environment. </li></ul>
  13. 13. SWOT analysis Corporate level startegy A 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 Strategy A 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 Strategy A plan of action to improvethe ability of an Organization’s departments to create value
  14. 14. 2.The 5 forces model (Michael Porter) 5 major threats: <ul><li>The levels of rivalry among organizations in a industry </li></ul><ul><li>(low prices mean lesss profit) </li></ul><ul><li>The potential for entry into an industry </li></ul><ul><li>The power of suppliers </li></ul><ul><li>(few suppliers – drive up price – expensive – lower price) </li></ul><ul><li>The power of customers </li></ul><ul><li>(few custmers – bargain price – lower price) </li></ul><ul><li>The threats of substitute products </li></ul><ul><li>(companies that produce a product with a known substitute canot demand high prices for their products) </li></ul>
  15. 15. Formulating corporation-level Strategies <ul><li>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: </li></ul><ul><li>1. Concentration on a single business </li></ul><ul><li>2. Diversification </li></ul><ul><li>The strategy of expanding operations into a new business or industry and producing new goods or services. </li></ul><ul><li>Related Diversification </li></ul><ul><li>Unrelated Diversification </li></ul><ul><li>3. International expansion </li></ul><ul><li>Global strategy </li></ul><ul><li>Multidomestic strategy </li></ul><ul><li>4. Vertical integration </li></ul><ul><li>A strategy that allows an organization to create value by producing its own inputs or distributing and selling its own outputs. Eg; </li></ul><ul><li>Pepsi -Taco bell, Pizza Hut, KFC </li></ul>
  16. 16. Formulating business-level Strategies <ul><li>Low cost strategy </li></ul><ul><li>driving the organization’s costs down below the costsof its rivals. </li></ul><ul><li>Differentiation strategy </li></ul><ul><li>Distinguishing an organization’s products from the products of competitors in dimension such as product design quality or after sales sevice . </li></ul><ul><li>Focused Low cost </li></ul><ul><li>Serving only one segment of the overall market and being the lowest cost organization serving that segment. </li></ul><ul><li>Focused differentiation </li></ul><ul><li>Serving only one segment of the overall market and trying to be the most differentiated organization serving that segment. </li></ul>
  17. 17. Formulating functional-level Strategies <ul><li>Is a plan of action to improve the ability of an organization’s department to create value. </li></ul><ul><li>Two ways for adding value to an organization : </li></ul><ul><li>1.dept.manager can lower the costs of creatingvalue. So that can attract cust by keeping its prices lower than competitor’s prices. </li></ul><ul><li>2.dept.manager can add value to a product by finding ways to differentiate it from the products of other companies. </li></ul><ul><li>4 goals managers should attend in adding value or lower the costs: </li></ul><ul><li>-to attain superior efficiency </li></ul><ul><li>-to attain superior quality </li></ul><ul><li>-to attain superior innovation </li></ul><ul><li>-to attain superior responsiveness to customers </li></ul>
  18. 18. Implementing strategy <ul><li>Five-steps process : </li></ul><ul><li>Allocating responsibility for implementation to the appropiate individuals or groups. </li></ul><ul><li>Drafting detailed action plans that specify how a strategy is to be implemented. </li></ul><ul><li>Establishing a timetable for implementation that includes precise, measurable goals linked to the attainment of the action plan. </li></ul><ul><li>Allocating appropiate resources to the responsible individuals or groups </li></ul><ul><li>Holding specific individuals or groups responsible for theattainment of corporate,divisional,and functional goals. </li></ul>
  19. 19. <ul><li>THE END </li></ul>