The Manager as a Planner and a Strategist

1. The Manager as a Planner and a Strategist

2. The Nature of the Planning Process • Planning • Identifying and selecting appropriate goals (objectives) and courses of action for a business. • The organizational plan that results from the planning process details the goals and specifies how managers will attain those goals, including budgeting resources. • Strategy • The cluster of decisions and actions that managers take to help an organization reach its goals.

3. The Planning Process • Mission Statement • Vision Statement • Goals & Objectives • Strategies

4. The Nature of the Planning Process Mission Statement • A broad declaration of an organization’s purpose. • Often defines the business • Who are our customers? • What customer needs are being satisfied? • How are we satisfying customer needs? • How does our firm differs from competitors?

5. Sample Mission Statements

6. UW-L CBA’s Mission Statement • Current: • “The College of Business Administration provides an educational experience that fosters the professional, academic and personal development of its students, staff and faculty.  • Our learning environment centers on a commitment to quality teaching and learning, substantial student-faculty interaction, and global engagement.  • Faculty, administration and students will engage in scholarly activity, provide service to the university and broader community and exhibit high integrity and ethics in the conduct of our own work and in our curriculum.” • Proposed: • “To provide students an exceptional business education that empowers them to serve organizations as socially responsible citizens in a global environment”.

7. Determining the Organization’s Mission and Goals • Vision Statement: Mental picture of where organization wants to be in the future. • “To be recognized for quality as the leading business school among the regional and state comprehensive universities.” • Major Goals (specific objectives): • Provides the organization with a sense of direction • Stretches the organization to higher levels of performance. • Goals must be challenging & specific but realistic with a definite period in which they are to be achieved, so they will be accepted by workers.

8. Typical Business Objectives • Profitability: annual rate of return on investment of 10% • Competitiveness:market share = 45% • Efficiency: *Output/input incr. by 10% *Product to market time reduced by 20% • Flexibility: Derive max. of 40% of sales from one product

9. Three Steps of Business Planning

10. Levels and Types of Planning

11. Levels of Planning • Division – business unit that has its own set of managers and departments and competes in a distinct industry • Divisional managers – Managers who control the various divisions of an organization

12. Levels of Planning at General Electric

13. Formulating Strategy • Corporate Strategy

14. Formulating Strategy • Strategic Formulation • Managers analyze the current situation to develop strategies for achieving the mission. • ________ Analysis • A planning exercise in which managers identify: • organizational strengths and weaknesses. • Strengths (e.g., superior marketing skills) • Weaknesses (e.g., outdated production facilities) • external opportunities and threats. • Opportunities (e.g., entry into new related markets). • Threats (increased competition)

15. Planning and Strategy Formulation Corporate-Level Strategy A plan to identify and manage a firm’s: *Goals *Structure *Action steps To maximize long-term viability and ability to create value. SWOT Analysis: A planning exercise, where managers identify a company’s: *Strengths *Weaknesses They also identify environmental: *Opportunities *Threats Business-Division Level Strategy A plan to compete effectively within a specific industry. Involves taking advantage of opportunities and countering threats in environment. Functional Level / Departmental Strategy A plan of action to achieve goals and create value. SWOT analysis should result in strategy formulation at all levels of the company

16. Five Forces Affecting Business Strategy

17. Formulating Corporate-Level Strategies • Concentration in Single Business • Diversification • Related diversification into similar market areas. • Synergy: two divisions working together perform better than the sum of their individual performances. • Unrelated diversification is entry into industries unrelated to current business. • Attempts to build a portfolio of unrelated firms to reduce risk of single industry; difficulty to manage.

18. The Boston Consulting Group Portfolio Matrix • Three steps: • Identify “Strategic Business Units (SBUs)” that stand alone with distinct missions.

19. The Boston Consulting Group Portfolio Matrix 2. Classify each SBU:

20. The Boston Consulting Group Portfolio Matrix • Decide what to do with each SBU:

21. Vertical Integration Strategy What is this strategy? What is the difference: • Backward vertical integration. • Forward vertical integration • Full integration? To read about Vertical Integration strategies, see: • https://www.investopedia.com/terms/v/verticalintegration.asp . • https://www.strategicmanagementinsight.com/topics/vertical-integration.html

22. Horizontal Expansion Strategy • What is this strategy? • For optional videos on Horizontal and/or Vertical Strategy, see: • https://www.tutor2u.net/business/reference/business-growth-strategy-horizontal-and-vertical-integration (6 min.) • https://www.youtube.com/watch?v=2Bi8K7ScpuI (32 min.; more detail than you need, but interesting examples… ) • https://www.youtube.com/watch?v=UoIlA4-GQwY (2 min.)

23. Formulating Divisional or Business-Level Strategies • Low-Cost Strategy • Differentiation Strategy • For more on these concepts see these optional videos & articles: • https://www.mindtools.com/pages/article/newSTR_82.htm (4 min.) • https://theproblem-solver.com/why-apple-vertical-integration-competitive-advantage/ (5 min.; there is actually very little about Apple Co. in the article)

24. Formulating Divisional orBusiness-Level Strategies • The Product-Marketapproach…

25. Functional-level Strategies Plans that indicate how a function (department) 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. How? • Functional strategies must fit with business level strategies.

26. Summary: Planning and Implementing Strategy (all levels) • Allocate implementation responsibility to the appropriate individuals or groups. • Draft detailed action plans for implementation. • Establish a timetable for implementation • Allocate appropriate resources (budgeting) • Hold specific groups or individuals responsible for the attainment of corporate, divisional, and functional goals.