Presented to :Prof. Khusro P. Malik

1. Presented By: Yasir Dawood Sp-2011-MSCEM-044 Asif Ali Fa-2011-MSCEM-039 Irfan Nawaz Fa-2011-MSCEM-040 M Kaiser Hanif Satti Sp11-MScEM-020 Qurat ul Ain Arsalan Fa-010-MSCEM-163 Saad Toor Fa-011-MSCEM-001 Presented to :Prof. Khusro P. Malik CASE STUDY on CHAPTER—8 by GROUP-8

2. The Planning Process Planning is the process used by managers to identify and select goals and courses of action for the organization. • The organizational plan that results from the planning process details the goals to be attained. • The pattern of decisions managers take to reach these goals is the organization’s strategy.

3. Planning ? 7 miles ? 12 miles ?? 15 miles

4. The Manager as a Planner and Strategist

5. Three Stages of the Planning Process Determining the Organization’s mission and goals (Define the business) Strategy formulation (Analyze current situation & develop strategies) Strategy Implementation (Allocate resources & responsibilities to achieve strategies)

6. Planning Process Stages • Organizational mission: defined in the mission statement which is a broad declaration of the overriding purpose. • The mission statement identifies product, customers and how the firm differs from competitors. • Formulating strategy:managers analyze current situation and develop strategies needed to achieve the mission. • Implementing strategy: managers must decide how to allocate resources between groups to ensure the strategy is achieved.

7. Corporate- level Plan Business- level Plan Functional level Plan Corporate mission & goals Divisional goals Functional goals Goal Setting Corporate- level strategy Business- level strategy Functional- level strategy Strategy Formulation Design of Functional Structure Control Design of Corporate Structure Control Design of Business-unit Structure Control Strategy Implementation Levels of Planning

8. Planning at General Electric CEO Corporate Level Corporate Office Business Level GE Aircraft GE Lighting GE Motors GE Plastics NBC Functional Level Accounting Manufacturing Marketing R & D

9. Planning Levels • Corporate-level:decisions by top managers. • Considers on which businesses or markets to be in. • Provides a framework for all other planning. • Business-level:details divisional long-term goals and structure. • Identifies how this business meets corporate goals. • Shows how the business will compete in market. • Functional-level:actions taken by managers in departments of manufacturing, marketing, etc. • These plans state exactly how business-level strategies are accomplished.

10. Characteristics of Plans • Time horizon:refers to how far in the future the plan applies. • Long-term plans are usually 5 years or more. • Intermediate-term plans are 1 to 5 years. • Corporate and business level plans specify long and intermediate term. • Short-term plans are less than 1 year. • Functional plans focus on short to intermediate term. • Most firms have a rolling planning cycle to amend plans constantly.

11. Types of Plans • Standing plans:for programmed decisions. • Managers develop policies, rules, and standard operating procedures (SOP). • Policies are general guides to action. • Rules are a specific guide to action. • Single-use plans:developed for a one-time, nonprogrammed issue. Usually consist of programs and projects. • Programs:integrated plans achieving specific goals. • Project:specific action plans to complete programs.

12. Who Plans? • Corporate level planningis done by top managers. • Also approve business and functional level plans. • Top managers should seek input on corporate level issues from all management levels. • Business and functional planningis done by divisional and functional managers. • Both management levels should also seek information from other levels. • Responsibility for specific planning may lie at a given level, but all managers should be involved.

13. Why Planning is Important Planning determines where the organization is now and where it will be in the future. Good planning provides: • Participation:all managers are involved in setting future goals. • Sense of direction & 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 in charge of accomplishing a goal.

14. Determining Mission and Goals • This is the first step of the planning process and is accomplished by: A. Define the business:seeks to identify our customer and the needs we can and should satisfy. • This also pinpoints competitors. B. Establishing major goals:states who will compete in the business. • Should stretch the organization to new heights. • Goals must also be realistic and have a time period in which they are achieved.

15. Mission Statements Company Compaq AT&T Mission Statement Compaq, along with our partners, will deliver compelling products and services of the highest quality that will transform computing into an intuitive experience that extends human capability on all planes -- communication, education, work, and play. We are dedicated to being the world’s best at bringing people together -- giving them easy access to each other and to the information and services they want and need -- anytime, anywhere.

16. Strategy Formulation • Managers analyze the current situation to develop strategies achieving the mission. • SWOT analysis: a planning to identify: • Organizational Strengths and Weaknesses. • Strengths: manufacturing ability, marketing skills. • Weaknesses: high labor turnover, weak financials. • Environmental Opportunities and Threats. • Opportunities: new markets. • Threats: economic recession, competitors

17. The Five Forces Model Potential for Entry Rivalry Among Organizations Power of Supplier Power of Buyer Substitute Products

18. The Five Forces 1. Level of Rivalry in an industry:how intense is the current competition with competitors? Increased competition results in lower profits. 2. Potential for entry:how easy is it for new firms to enter the industry? Easy entry leads to lower prices and profits. 3. Power of Suppliers:If there are only a few suppliers of important items, supply costs rise. 4. Power of Buyers:If there are only a few, large buyers, they can bargain down prices. 5. Substitutes:More available substitutes tend to drive down prices and profits.

19. Business Strategies • Low-cost:gain a competitive advantage by driving down organizational costs. • Managers manufacture at lower cost, reduce waste. • Lower costs than competition mean lower prices. • Differentiation:gain a competitive advantage by making your products different from competitors. • Differentiation must be valued by the customer. • Successful differentiation allows you to charge more for a product. • Stuck in the middle:It is difficult to simultaneously become differentiated and low cost.

20. Business Strategies • Firms also choose to serve the entire market or focus on a few segments. • Focused low-cost:try to serve one segment of the market but be the lowest cost in that segment. • Focused differentiated:Firm again seeks to focus on one market segment but is the most differentiated in that segment. • BMW provides a good example.

21. Strategic Plan Action Plans Evaluate Progress Major Components of theStrategic Plan / Down to Action Mission Why we exist Vision What we want to be Goals What we must achieve to be successful Specific outcomes expressed in measurable terms (NOT activities) Objectives O1 O2 Planned Actions to Achieve Objectives Initiatives AI3 AI2 AI1 Indicators and Monitors of success Measures M1 M2 M3 Desired level of performance and timelines Targets T1 T1 T1

22. STRATEGIC MANAGEMENT PROCESS

23. Plan your work. Work your plan.

24. Thanks