ipptchap008.ppt

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The Manager as

a Planner

and Strategist

Chapter Eight

Copyright 2014 by The McGraw-Hi ll Education. All ri ghts reserved.


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Learning Objectives

1. Identify the three main steps of the planningprocess and the relationship between planning and

strategy.

2. Describe some techniques managers can use toimprove the planning process so they can better

predict the future and mobilize organizational

resources to meet future contingencies.

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Learning Objectives (cont.)

3. Differentiate between the main types of business-level strategy and explain how they give anorganization a competitive advantage lead tosuperior performance.

4. Differentiate between the main types of corporate-level strategies and explain how they are used tostrengthen a companys business-level strategy andcompetitive advantage

5. Describe the vital role managers play inimplementing strategies to achieve anorganizations mission and goals

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Planning and Strategy

Planning

Identifying and selecting appropriate goals and

courses of action for an organization.

The organizational plan that results from the

planning process detailsthe goals and the specific

strategies managers will implement to attain those

goals

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Strategy

A cluster of decisions

about what goals to

pursue, what actionsto take, and how to

use resources to

achieve goals.

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Mission Statement

A broad declaration of an organizations purpose

that identifies the organizations products and

customers and distinguishes the organizationfrom its competitors.

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ExampleFacebook Mission

Statement

Facebook's mission is to

give people the power

to share and make the

world more open andconnected.

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http://www.facebook.com/facebook


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Three Steps in Planning

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Figure 8.1


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The Nature of the Planning Process

To perform the planning task, managers:

1. Establish and discover where an organizationis at thepresent time

2. Determine its desired future state

3. Decide how to move it forward to reach that

future state

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Why Planning is Important

1. Necessary to give the organization a sense ofdirection and purpose

2. Useful way of getting managers to participate in

decision making about the appropriate goalsand strategies for an organization

3. Helps coordinate managers of the differentfunctions and divisions of an organization

4. Can be used as a device for controllingmanagers

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Unity

at any one time only

one central, guiding

plan is put intooperation

Continuity

planning is an ongoing

process in which

managers build andrefine previous plans

and continually modify

plans at all levels

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Accuracy

managers need to

make every attempt to

collect and utilize allavailable information

at their disposal

Flexibility

plans can be altered

and changed if the

situation changes

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Levels of Planning at

General Electric

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Figure 8.2


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Levels and Types of Planning

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Figure 8.3


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Levels of Planning

Corporate-Level Plan

Top managements decisions pertaining to theorganizations mission, overall strategy, and

structure.Provides a framework for all other planning.

Corporate-Level Strategy

A plan that indicates in which industries andnational markets an organization intends tocompete.

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Levels of Planning

Business-Level Plan

Long-term divisional goals that will allow the

division to meet corporate goals

Divisions business-level and structure to achieve

divisional goals

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Levels of Planning

Business-Level Strategy

Outlines the specific methods a division, business

unit, or organization will use to compete

effectively against its rivals in an industry

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Levels of Planning

Functional-Level Plan

Goals that the managers of each function will

pursue to help their division attain its business-

level goals

Functional Strategy

A plan of action to improve the ability of each of

an organizations functions to perform its task-specific activities in ways that add value to an

organizations goods and services.

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Time Horizons of Plans

Time Horizon

Period of time over which they are intended to

apply or endure.

Long-termplans are usually 5 years or more.

Intermediate-termplans are 1 to 5 years.

Short-termplans are less than 1 year.

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Types of Plans

Standing Plans

used in programmed decision situations

Policies- general guides to action

Rules - formal written specific guides to action

Standard operating procedures (SOP) - specify an

exact series of actions to follow

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Types of Plans

Single-Use Plans

Developed to handle non-programmed decision-

making in one-of-a-kind situations

Programs- integrated plans achieving certain goals.

Project- specific action plans to complete programs.

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Scenario Planning

Scenario Planning (Contingency Planning)

The generation of multiple forecasts of futureconditions followed by an analysis of how to

effectively respond to those conditions.

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Determining the Organizations

Mission and Goals

Defining the Business

Who are our customers?

What customer needs are being satisfied?

How are we satisfying customer needs?

Establishing Major Goals

Provides the organization with a sense of

direction

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Three Mission Statements

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Figure 8.4


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Establishing Major Goals

Strategic leadership

The ability of the CEO and top managers to

convey a compelling vision of what they want the

organization to achieve to their subordinates

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Formulating Strategy

Strategic Formulation

The development of a set of corporate, business,

and functional strategies that allow an

organization to accomplish its mission andachieve its goals

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Formulating Strategy

SWOT Analysis

A planning exercise in which managers identify

organizational strengths (S) and weaknesses (W)

and environmental opportunities (O) andthreats (T).

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Questions for SWOT Analysis

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Planning and Strategy Formulation

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Figure 8.5


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The Five Forces

Level of rivalry in an industry

Potential for new entrants

Power of large suppliers

Power of large customers

Threat of substitute products

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The Five Forces

Hypercompetition

industries that are characterized by permanent,

ongoing, intense, competition brought about by

advancing technology or changing customertastes and fads and

fashions

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F l ti B i L l


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Formulating Business-Level

Strategies

Low-Cost Strategy

Driving the

organizations total

costs down below thetotal costs of rivals.

Differentiation

Distinguishing an

organizations products

from the products ofcompetitors on

dimensions such as

product design,

quality, or after-salesservice.

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F l ti B i L l


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Strategies

Stuck in the Middle

Attempting to simultaneously pursue both a low

cost strategy and a differentiation strategy.

Difficult to achieve low cost with the added costs

of differentiation.

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F l ti B i L l


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Strategies

Focused Low-Cost

Serving only one

market segment and

being the lowest-costorganization serving

that segment.

Focused

Differentiation

Serving only one

market segment as themost differentiated

organization serving

that segment.

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Principal Corporate-Level

Strategies

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Concentration on a single industry

Vertical integration

Diversification

International expansion


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Related Diversification

Synergy

Obtained when the value created by two divisions

cooperating is greater than the value that would

be created if the two divisions operatedseparately

and independently

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International Expansion

Multi-domestic Strategy

Customizing products and marketing strategies to

specific national conditions

Helps gain local market share

Raises production costs

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Four Ways to Expand

Internationally

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Figure 8.7

Planning and Implementing


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Planning and Implementing

Strategy

1. Allocate implementation responsibility to theappropriate individuals or groups.

2. Draft detailed action plans for implementation.

3. Establish a timetable for implementation4. Allocate appropriate resources

5. Hold specific groups or individuals responsible forthe attainment of corporate, divisional, and

functional goals.

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Video: Free for All

How does free work as a business model?

How does Google leverage its ownership of

YouTube?

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http://www.youtube.com/

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