chap4 planning bách khoa

Learning ObjectivesAfter studying the chapter, you should be able to:  Define planning  Explain the potential benefits of planning  Identify the potential drawbacks of planning  Desc

Fundamentals oF manaGement

BY: LAI VAN TAI

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Learning Objectives

After studying the chapter, you should be able to:

 Define planning

 Explain the potential benefits of planning

 Identify the potential drawbacks of planning

 Describe the three steps of the planning process

 Distinguish between strategic and tactical plans

 Differentiate among corporate-, business-, functional-level strategies

 Outline the main steps in SWOT analysis.

 Define management by objectives and identify its common elements

 Describe the four grand strategies

 Planning

 Identifying and selecting appropriate goals and courses

of action for an organization

 The organizational plan that results from the planning process

details the goals and specifies how managers will attain those goals.

 Strategy

 The cluster of decisions and actions that managers take

to help an organization reach its goals

Objectives Time Frame Scope

How Do Strategic and Tactical

Plans Differ?

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Why Planning Is Important

 Planning ascertains where the organization is now

and deciding where it will be in the future.

 Participation: all managers are involved in setting

future goals

 Sense of direction and purpose: planning sets goals and

strategies for all managers

 Coordination: plans provide all parts of the firm with

understanding about how their systems fit with the whole

 Control: Plans specify who is responsible for the

accomplishment of a particular goal

Reduces the Impact of Change

Provides Direction

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Criticisms of

Formal

Planning

May Create Rigidity

Can’t Replace Intuition

and Creativity

Can’t Be Done in a Dynamic Environment

Focus on Today’s Competition

Reinforces Success

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Does Planning Improve Performance?

Three Steps in Planning

Figure 8.1

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Identify Current

Mission, Objectives

& Strategy

The Strategic Management Process

Reassess Mission

Strategies

Evaluate Results

1

Analyze Resources

Note Weaknesses and Strengths

Analyze Environment

Note Threats and Opportunities

Objectives need to be SMART

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Mục tiêu tài chính và mục tiêu chiến lược

Mục tiêu tài chính

Tăng trưởng doanh thu

Tăng trưởng lợi nhuận

Cổ tức cao hơn

Tỉ suất lợi nhuận cao

Tỉ suất lợi nhuận trên đầu tư cao hơn

Thu nhập trên cổ phiếu cao hơn

Giá cổ phiếu tăng

Cải thiện dòng tiền

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Mục tiêu tài chính và mục tiêu chiến lược

Mục tiêu chiến lược

 Thị phần lớn hợn

 Giao hàng đúng hạn nhanh hơn đối thủ

 Thiết kế mẫu sản phẩm mới nhanh hơn đối thủ

 Chi phí ít hơn đối thủ

 Chất lượng sản phẩm cao hơn đối thủ

 Xuất hiện tại nhiều thị trường hơn đối thủ

 Dẫn đầu về công nghệ

 Liên tục giới thiệu sản phẩm mới hay sản phẩm cải

tiến trước đối thủ

Planning Process Stages

 Determining the Organization’s Mission and Goals

 Defining the organization’s overriding purpose and its

goals

 Formulating strategy

 Managers analyze current situation and develop the

strategies needed to achieve the mission

 Implementing strategy

 Managers must decide how to allocate resources

between groups to ensure the strategy is achieved

Levels and Types of Planning

Figure 8.2

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Levels of Planning at General Electric

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Levels of Planning

 Corporate-Level Plan

 Top management’s decisions pertaining to the

organization’s mission, overall strategy, and structure

 Provides a framework for all other planning

 Corporate-Level Strategy

 A plan that indicates in which industries and national

markets an organization intends to compete

Levels of Planning

 Business-Level Plan:

 Divisional managers’ decisions pertaining to divisions

long-term goals overall strategy, and structure

 Identifies how the business will meet corporate goals.

 Business-Level Strategy

 A plan that indicates how a division intends to compete

against its rivals in an industry

 Shows how the business will compete in market.

Levels of Planning

 Functional-Level Plan

 Functional managers’ decisions pertaining to the goals

that they propose to pursue to help the division attain its business-level goals

 Functional Strategy

 A plan that indicates how a function intends to achieve

its goals

Who Plans?

 Corporate-Level Plans

 Plans developed by top management who also are

responsible for approving business- and functional-level plans for consistency with the corporate plan

 Top managers should seek input on corporate level

issues from all management levels

 Business-Level Plans

 Plans developed by divisional managers who also

review functional plans

 Both management levels should also seek

information from other levels.

Formulating Strategy

 Strategic Formulation

 Managers analyze the current situation to develop

strategies for achieving the mission

 SWOT Analysis

 A planning exercise in which managers identify

organizational strengths and weaknesses

 Strengths (e.g., superior marketing skills)

 Weaknesses (e.g., outdated production facilities)

 and external opportunities and threats

 Opportunities (e.g., entry into new related markets).

 Threats (increased competition)

Opportunities

Weaknesses Strengths

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How to Use SWOT to Develop Strategies

Opportunities (O)

O1 Economic integration Europe O2 Demographics favor quality O3 Economic development in Asia O4 Opening of Eastern Europe O5 Trend towards super stores

External Factors (EFAS )

Threats (T)

T1 Increase government regulation T2 Strong US Competition T3 Whirlpool and Electralux positioned for global economy T4 New product advances

T5 Japanese appliance companies

Internal Factors (IFAS)

Strengths (S)

S1 Quality Maytag culture S2 Experienced top management S3 Vertical integration

S4 Employee relations S5 Hoover’s international orientation

Weaknesses (W)

W1 Process -oriented R&D W2 Distribution channels W3 Financial position W4 Global positioning W5 Manufacturing facilities

SO Strategies

• Use world wide Hoover distribution channels to sell Hoover and Maytag major appliances.

• Find joint venture partners in Eastern Europe and Asia.

WO Strategies

• Expand Hoover’s in Europe by improving Hoover quality and reducing manufacturing and distribution cost.

• Emphasize superstore channel for all non-Maytag brand.

ST Strategies

• Acquire Raytheon’s appliance business

to increase US market Share.

• Merge with a Japanese major home appliances company

• Sell off all non-Maytag brands.

Strongly defend Maytag’s US niche.

Planning and Strategy Formulation

Figure 8.5

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Corporate Strategy

• Growth Strategies

• Concentration growth within current industry (Current product line)

• Vertical Integration (forward integration and backward integration)

• Horizontal integration ( by expanding the firm’s products into other geographical locations and/or by increasing the range of products and services offered to the current market)

• Diversification into other industries

• Concentric (related business)

• Conglomerate (unrelated business)

• Captive Company Strategy

• Divestment Strategy/Sell- Out

• Bankruptcy/ Liquidation StrategyLAI VAN TAI

Stages in a Vertical Value Chain

Figure 8.6

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Corporate StrategyDirectional Strategy

• Growth Strategies

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Corporate Strategy

Portfolio Analysis

•

*Star

? Problem Child

$ Cash Cow

Boston Consulting group

BCG growth-share

matrix

Market share: sales relative to

those of other competitors in

the market

Growth rate: Industry growth

rate in constant dollars

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• Explicit collusion (direct communication) is illegal in most countries

• Tacit collusion (no direct communication) could be successful.

Determining A Business-Level Strategy

Porter’s Business-Level Strategies

Business Strategies

Tactics in Competitive Strategies

A tactic is a specific plan detailing how a strategy is to be

implemented in terms when and where it is to be put to action Some of the tactics are timing (when) tactics and market location (where ) tactics

Timing (when to compete)

• First mover (pioneer) is the first company manufacture and sell products in particular market First mover enjoys many advantages if successful

• Late mover has lower risks, advantages, and disadvantages

Business Strategies

Market Location Tactics (where to compete)

• Front Assault: The firm goes head to head with its competitors.

• Flanking maneuver: Concentrate on part of the market in which competitor is

weak.

• Bypass attack: The attacker change the rules of the game.

• Encirclement: Encircle the competitors position in terms of product or

market or both.

• Guerrilla warfare: “Hit and Run”, no counter-attack, no lasting advantage.

Defensive Tactics (designed to lower the possibility of an attack)

• Raise barriers: make it expensive to enter; occupy the full market

• Expected retaliation: Behave & speak so that entrant will expect retaliation.

• Lower inducement: Keep price low.

Functional-level Strategies

 A plan that indicates how a function intends to

achieve its goals

 Seeks to have each department add value to a good or

service Marketing, service, and production functions can all add value to a good or service through:

 Lowering the costs of providing the value in products.

 Adding new value to the product by differentiating.

 Functional strategies must fit with business level

strategies

Planning and Implementing Strategy

1. Allocate implementation responsibility to the appropriate

individuals or groups

2. Draft detailed action plans for implementation

3. Establish a timetable for implementation

4. Allocate appropriate resources

5. Hold specific groups or individuals responsible for the

attainment of corporate, divisional, and functional goals

Individual Objectives

What Is Management by Objectives?

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Support from

Top Management

Employees Setting Objectives

 Identify key job tasks

 Set specific and challenging goals

 Encourage active participation

 Prioritize goals

 Build in feedback

 Link rewards to goal attainment

Problems with MBO

 Efforts directed primarily toward output

 Encourage individual rather than team efforts

 Goals may discourage efforts for continuous

improvement