ITM Bridging Topic 03 – Planning : Introduction To Management, Assignment, KU, Singapore

Learning Objectives

LO1 Summarize the basic steps in any planning process

LO2 Describe how strategic planning should be integrated with tactical and operational planning

LO3 Describe how strategy is base on analysis of the external environment and the firm’s strengths and weaknesses.

LO4 Discuss how companies can achieve competitive advantage through business strategy

LO5 Describe the keys to effective strategy implementation

LO6 Explain how to make effective decisions as a manager.

LO7 Summarize principles for group decision making

Planning

•  Planning -conscious, systematic process of making decisions about goals and activities that an individual, group, work unit, or organization will pursue in the future. -a purposeful effort that is directed and controlled by managers and often draws on the knowledge and experience of employees throughout the organization.

Goals, plans and performance

• Goal -A desired future state that the organisation attempts to realise.
• Plan -A blueprint specifying the resource allocations, schedules and other actions necessary for attaining goals.

• Managers must decide organisation’s future & how to get there.
• Smaller organisation’s planning can be more informal
• Eg. of Planning: new product design, reduce costs, increase profits & quality & customer satisfaction, internationalisation etc.

The new planning approach

• Traditional approaches to planning:

-Centralised planning department (Top Down)

-A group of planning specialists who develop plans for the organisation as a whole and its major divisions and departments, and typically report to the

CEO.

• Modern approaches to planning:

-Decentralised planning staff (Bottom Up)

-A group of planning specialists assigned to major departments and divisions to help managers develop their own strategic plans

Core Components of Planning

Objectives

• Goals or targets that the firm wishes to reach within a stated amount of time

Actions

• The specific steps the firm intends to take to achieve the desired objectives

Resource Allocation

• A plan states where resources will come from and how they will be deployed

Implementation Guidelines

• Show how the intended actions will be carried out

Resource Allocation

• A plan states where resources will come from and how they will be deployed

The Strategic Management Process

A process that involves managers from all parts of the organization in the formulation and implementation of strategic goals and strategies

Establishment of Mission, Vision, and Goals

• Mission

-An organization’s basic purpose and scope of operations.

McDonalds – “To be our customers’ favourite place and way to eat.”

Apple – “Apple computer is committed to protecting the environment, health and safety of our employees, customers and the global communities where we operate.”

Kaplan Singapore – “helps individuals achieve their educational and career goals. Kaplan Singapore builds futures one success story at a time.”

Analysis of External Opportunities and Threats

• Stakeholders

– External groups and individuals who affect and are affected by the achievement of the organization’s mission, goals, and strategies

Analysis of Internal Strengths and Weaknesses

• Resources

-Inputs to a system that can enhance performance

-Tangible, intangible assets

Tangible resources

• Financial
• Physical
• Workers

Intangible resources

• Reputation
• Technology
• Human capital

SWOT Analysis and Strategy Formulation

• SWOT analysis

-A comparison of strengths, weaknesses, opportunities, and threats that helps executives formulate strategy.

SWOT Analysis – An Example

Strategy Formulation

•  Corporate Level Strategies
  -Growth, Stability or Retrenchment
• Diversification Strategies
  -Decision to concentrate on single business or multiple types of business
• Business Level Strategies
  -Cost Leadership – offer standard, no-frills product
  -Differentiation – being unique in its industry or market segment along one or more dimensions

BCG Matrix

Technique used by companies to analyse its strategy based on portfolio analysis.

Tutorial: Individual Discussion Question