Planning Pom (2)

7/30/2019 Planning Pom (2)

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PLANNINGMrs.Nupur Chhaniwal

POM

FMS-IRM


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WHAT IS PLANNING Planning is a continuous process of makingpresent enterpreneurial decision(risktaking)systematically and with best

possible knowledge of theirfuturity,organising systematically theeffort needed to carry out these decisionsand measuring the result of those decisionagainst the expectations through an

organised systematic feedback.PeterDrucker


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where we are and where we want to be in the

future.Looking ahead,relating todays event withtomorrows possibilities.It mini the risk and ensure that

resource s are used effectively and efficiently. Planning and controlling areinseparable.planning involvesdetermining organisational objectivesand developing strategies to achievethe objective,while controllinginvolves establishing standards of

performance and comparing actualresults with planned results.


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Nature of Planning Planning is goal oriented It is intellectual or rational process

It is a primary function

It is all pervasive

It is forward looking

It perpetual process

It is an integrated process It involves choice


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Significance of Planning Focuses attention on objectives Offsets uncertainity and risk

Provides sense of direction Provide guidelines for decision making

Increases organisational effectiveness

Provide efficiency in operation


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Encourages innovation and creativity

Facilitates delegation

Ensures better coordination Facilitates control


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2.Plan based

onfrequencyof use(i)Single use plans-Programs,projects(build new headquater,renovating)

(ii)Standing plans-Budgets,Policies

Procedure,Rules


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3.Plan based on Time

frame Long term plan-direction

Intermediate term plan-specify theactivities

Short term plan-day to day work


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Steps in planning process

Analyzing

opportunity

Establishing

objectives

Determing

planningpremise

s

Identifying

alternative

Evaluation

Selecti

on

Implementatio

n

ReviewA


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Prerequisites for

effective planning Establishing the right climate for planning Clear and specific objectives

Planning premises

Initiative at top level

Participation in planning process

Communication of planning elememts

Integration of long and short term plans An open systems approach

Management information system


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Limitation of planning Lack of accurate information Time consuming process

Expensive

Inflexibility

Resistance to change

Environmental constraints

Lack of ability and commitment False sense of security

Reluctance to establish goals


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Planning process

outputOrganisation plan

Process(Planning Proccss)

All 8 steps are there of steps in Planning process

Input-A portion of organisation

People,money Machine,raw material


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Organisation

Objectives


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Defination Organisation objectives are targetstowards which the open management

system is directed. It states the end result to be

achieved by organisation.they form

the basis of good planning.


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Nature of Objectives Hierarchy of objectives Process of formulating objectives

and organisational hierarchy A network of objectives

Multiplicity of objectives


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Borad ofdirectors

Vision,Mission,Overall objective of the firm

Objectives in key result areas-productivity,physical,financial,innovation

Middle level

Divisional objectives Departmental objectives

Lower level

Department and unit objective

Objective for subordinate-performance goals,development goal

Level of organisationalhierarchy

Types of Objectives


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Strategies,Policiesand Planning

Premises


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Nature and Purpose of

strategies and policies Strategy-It refers to determination of missionand basic long-term objective of an enterpriseand adoption of courses of action and allocation of

resources necessary to achieve these aims. Policies-General concepts or statement that guide

managers thought processes and behaviors whenthey make decision


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Three level of strategy

Functionalstartegy

Business unitstrategy

Corporatestrategy

Vision

Corporategoals

Philosophy,c

ulture

Mission,business

goals,competencies

HR RD Marketing Finance


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Corporate level strategy or portfolio level strategy it concernsboard level decisions for acquisitions, mergers , expansions,divestification that add or reduce product lines.

Business level strategy- managers focus on well-defined business

line or division of services to determine how to compete in theirrespective industries.

Functional level strategy-are carried out by executives infunctional areas which support business level decisions tointroduce new technologies , develop new products , open newmarkets ,to implement action plans to help the firm compete

effectively a marketing strategy with sales promotion ,distribution, pricing etc. .


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Planning Premises It is defined as anticipatedenvironment in which plans are

expected to operate. Planning premises and future

expectation


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The business portfolio is the collection of businesses andproducts that make up the company. The best businessportfolio is one that fits the company's strengths and helpsexploit the most attractive opportunities.

The company must: (1) Analyse its current business portfolio and decide which

businesses should receive more or less investment, and

(2) Develop growth strategies for adding new products andbusinesses to the portfolio, whilst at the same timedeciding when products and businesses should no longer beretained.


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The two best-known portfolio planning methods are fromthe Boston Consulting Group (the subject of this revisionnote) and by General Electric/Shell. In each method, thefirst step is to identify the various Strategic Business

Units ("SBU's") in a company portfolio. An SBU is a unit ofthe company that has a separate mission and objectives andthat can be planned independently from the otherbusinesses. An SBU can be a company division, a product lineor even individual brands - it all depends on how the

company is organised.


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BCG Matrix The Boston Consulting Group Box ("BCG Box") a company classifies all its SBU's according to two

dimensions:

On the horizontal axis: relative market share- thisserves as a measure of SBU strength in the market

On the vertical axis: market growth rate- this provides ameasure of market attractiveness


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Nestle Stars-Nescafe,Maggi Noodles Question Marks-Kitkat,Munch,Maggi

soup,Maggi sauces Cash cows-Cerelac

Dogs-Nestea,milky bar,nestle crunch


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Maggi noodle-Star Reasons for present positioning: (1) It is surprising to note that Maggi Noodles,which has found

more households of consumption in India that any other countryinthe world and has become the first preferenceof Indian children

in terms of instant food, butwith other competition prospects arechanging

(2) The reason essentially lies in the fact thatthough MaggiNoodles has a significantly highmarket share in the Noodlesmarket in India,the market growth rate of Noodle consumptionisgrowing very high.

(3) Though the number of repeat purchasers ishigh in case ofMaggi, the rate of increaseamon the new purchasers is also rowin.


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Ceralac-Cow Reasons for present positioning: (1) Ceralac has become one of theleading baby food products

(2) It has witnesses quite a long holdin its market share with itssalesincreasing on a continuous basis foralmost more than one and

a half decade. (3) Its different variants have keptcompetitors at bay and its

finds aplace easily at almost every general


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Question mark The reason why these are is not placed as a dog is that it hasthe potentialto expand

and also because the product lies in a market with highbusiness growthrate.

The retailers dont give much importance to these items as anitem on the

shelf but they also do not completely disregard itoff their stores. WHY?

These might have not seriously taken promotional drive.

The main chunk of advertisements is seasonal

Extensive promotional exercise meant to place it in the mindsetof theIndian psyche.

It has huge avenues for growth especially analyzing theextending Indianmarket.


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Milky bar-dogs Reasons for present positioning: (1) It become quite popular in and around the year2000 but it

never reached the stage of a powerbrand.

(2) Primary tried by the Indian consumer as a crazewhich laid in

trying the first nonbrown chocolate,Nestle Milky bar was a sweetchocolate with creamcolor. Thus the primary acceptance of Milkybar wasnot based on its core qualities but on the basis of certainpeculiarities which it contained,differentiating it from otherproducts in the sameline.

(3) Milky Bar, as a chocolate, though has a growingmarket, yet it

has been placed as a dog on accountof the inherent lack of corequality which makes itgeneric with chocolates. This was the mainreason


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Porters 5 competitive

force model Generally, strategic planning commences with an analysisphase, where you seek to refresh your understanding of

your businesses 3 key strategic environments, these threestrategic enviroments that you analyse during your

strategic analysis are your Macro Environment,

Industry Environment, (or Porter's Five Forces), and

Internal Environment

Porters five forces is a competitive analysis model, it helpsyou to understand at the nature of competition within yourindustry, hence it is used when completing your industryanalysis.
http://www.whatmakesagoodleader.com/macro-environment-analysis.htmlhttp://www.whatmakesagoodleader.com/Internal-Analysis.htmlhttp://www.whatmakesagoodleader.com/Internal-Analysis.htmlhttp://www.whatmakesagoodleader.com/macro-environment-analysis.html


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Michael Porter developed a framework, whichidentified 5 forces that act to either increase orreduce the competitive forces within an industry.

These five forces are The Bargaining Power of Your Customers

The Threat of New Entrants into your Industry

The Bargaining Power of Suppliers

Threat of Substitute Products or Services Rivalry Amongst Existing Firms


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