chap4 planning bách khoa

Fundamentals oF manaGement BY: LAI VAN TAI LAI VAN TAI Chapter PLANNING LAI VAN TAI 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 Defining the organization’s goals, establishing an overall strategy, and developing a hierarchy of plans to achieve goals LAI VAN TAI Planning  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 Specific Plans Low General Directional Plans High Objectives Flexibility Clear LAI VAN TAI How Do Strategic and Tactical Plans Differ? Time Frame Scope LAI VAN TAI Objectives 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 Sets Standards to Facilitate Control Provides Direction Reasons for Planning Minimizes Waste and Redundancy Reduces the Impact of Change LAI VAN TAI May Create Rigidity Criticisms of Formal Planning Can’t Be Done in a Dynamic Environment Can’t Replace Intuition and Creativity Focus on Today’s Competition Reinforces Success LAI VAN TAI Stages in a Vertical Value Chain LAI VAN TAI Figure 8.6 Corporate Strategy Directional Strategy • Growth Strategies LAI VAN TAI Corporate Strategy Portfolio Analysis • Boston Consulting group BCG growth-share matrix Cash Generation (relative Market Share) High Cash use (Growth Rate) Low * Star $ Cash Cow Market share: sales relative to those of other competitors in the market High Growth rate: Industry growth rate in constant dollars LAI VAN TAI ? Problem Child X Dog Low LAI VAN TAI Business Strategies Competitive strategies and tactics used to gain competitive advantage within an industry by battling against other firms Cooperate strategies can also be used to gain competitive advantage within an industry by working with other firms Collusion Collusion is the active cooperation of independent firms to reduce output and raise prices in order to get around the normal economic law of supply and demand • Explicit collusion (direct communication) is illegal in most countries • Tacit collusion (no direct communication) could be successful Determining A Business-Level Strategy Cost Leadership Differentiation Focus LAI VAN TAI Porter’s Business-Level Strategies Number of Market Segments Served Strategy Many Low-cost   Focused low-cost Differentiation Few   Focused differentiation LAI VAN TAI Table 8.2 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 Allocate implementation responsibility to the appropriate individuals or groups Draft detailed action plans for implementation Establish a timetable for implementation Allocate appropriate resources Hold specific groups or individuals responsible for the attainment of corporate, divisional, and functional goals What Is Management by Objectives? Organizational Objectives Divisional Objectives Departmental Objectives Individual Objectives LAI VAN TAI More Difficult Goals Lead To Higher Performance Specific Goals Lead to Better Results Does MBO Work? Support from Top Management Is Critical Participation Is Key LAI VAN TAI 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 ... drawbacks of planning  Describe the three steps of the planning process  Distinguish between strategic and tactical plans  Differentiate among corporate-, business-, functional-level strategies... strategy is achieved Levels and Types of Planning LAI VAN TAI Figure 8.2 Levels of Planning at General Electric LAI VAN TAI Levels of Planning  Corporate-Level Plan    Top management’s decisions... 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: 