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Land Securities, the UK’s leading property company, played a key role in each of these Business strategy:
broad decisions taken that
developments. It has had a huge influence on the day-to-day lives of people living across the affect the whole of an
UK. Quoted on the London Stock Exchange, it is a member of the FTSE 100. Land Securities organisation.
owns property worth more than £15 billion across the UK. Its core purpose is to make the
Planning: the process of
best use of all its property in order to deliver results.
identifying a desired
outcome and then setting
Land Securities has a rolling five-year plan that helps it to look forward in order to meet its up effective processes to
ensure that it happens.
customers’ future needs. This case study focuses on Land Securities’ business strategy.
It describes how the company uses planning processes to provide a clear direction for the Stakeholders: individuals
organisation. and groups that have an
influence upon or are
influenced by the actions of
One of the most important functions of management is planning. Planning helps to identify an organisation.
how business objectives are achieved. It involves thinking ahead, setting objectives and
creating the means to achieve them. It also involves setting up the processes needed to Competitive advantage:
advantage obtained over
measure how well an organisation is performing against its business objectives. Planning
competitors through
provides the starting point for making the decisions and taking the actions that build the benefits that competitors
organisation’s future. may find difficult to copy.
When plans are put together, they will usually involve an element of change. For example, the
plan may involve internal or external changes for an organisation which will result in new
decisions and actions. It is vital that there is effective communication with all groups of
stakeholders so that they know the plan is working. Every six months, the management
team at Land Securities reviews business performance against its plan and communicates
these results to its stakeholders.
In recent years Land Securities has developed a new business strategy. This is ‘to invest in
property in sectors where we have expertise and operational skills which give us competitive
advantage’. By using existing skills this will provide Land Securities with advantages over its
competitors. In order to meet this strategy, Land Securities’ five-year plan focuses on providing a
range of buildings and services where people can live, work and relax.
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As a property business, Land Securities has to make the properties it owns work effectively in
order to generate good results. It focuses on creative and customer-focused developments to
improve the value of the properties that it owns through property management, development
and other activities. An example of this is the Bullring in Birmingham. This creates income for
its shareholders through the profits it makes.
A rolling plan is one with a planning cycle that is regularly reviewed and refined based on
GLOSSARY
performance. For the plan to be successful, it is important that the company has business
Shareholders: own objectives which are measurable and that it regularly reviews its progress against these
shares in a company in objectives. Land Securities calls these business objectives key performance indicators
return for profits in the (KPIs). The KPIs are very specific and clearly defined, so they can be used to measure the
form of dividends as well
as the right to vote at performance of the organisation. By monitoring whether the business meets its KPIs,
Annual General Meetings. Land Securities gains valuable feedback. This helps it to adjust and refine its business
strategies and set new KPIs/business objectives.
Planning cycle: the time
span of a plan and its
review process.
Business Strategy
Business objectives:
these provide measurable
points within a business to Feedback Five-Year Plan
monitor progress.
Land Securities’
Stakeholders Environment
Employees
a lth a n d S af e
He ty
Suppliers
Investors
Customers
Community
These KPIs or business objectives provide a series of precise measures against which business
decisions and further action might need to be taken. They also help to show how well the
business is meeting the needs of its stakeholders. The table overleaf shows how the various
business objectives or KPIs measure the impact of the business on each stakeholder group.
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Stakeholder
Objective setting through KPIs is viewed as extremely important by Land Securities. By evaluating
its performance each year against these objectives, new targets can be set, which enables the
business to grow further.
Land Securities to achieve a balance between the requirements of the property industry and
the responsibilities that it has to its seven key stakeholder groups.
Objective setting through the use of KPIs is important for Land Securities. Evaluating its
performance each year against these objectives helps new objectives to be set. This moves
the business forward. Corporate responsibility helps Land Securities to achieve a balance
between its work in the property industry and all its other responsibilities.
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Financial/non-financial reporting
Land Securities reports on both the financial and non-financial aspects of its performance to
each of seven stakeholder groups. This is part of its corporate responsibility role.
Intranet: computer Employees are kept informed about events within the business in many ways. Its in-house
network within an magazine, Landmark, deals with a whole range of business issues. Other means of communication
organisation.
are internal poster campaigns, employee conferences, intranet, weekly newsletters and mini
Pressure groups: campaigns. These are all designed to keep employees informed and up-to-date.
groups of individuals
representing a particular Suppliers are key stakeholders. In order to listen to their views, Land Securities holds supplier
interest. conferences. It also keeps suppliers up-to-date about developments within the industry. It uses a
brochure outlining some of the approaches that Land Securities is taking on development issues.
Land Securities consults with local communities throughout a development project. This goes from
the earliest stage right through all the processes of construction. It communicates with local
communities, local and national government representatives and pressure groups.
A recent conference reported the progress made by Land Securities in managing the
environment. The conference helped it to share its good practices and consider new ways of
taking responsibility for the environment.
Conclusion
Land Securities takes a wide view of its responsibilities for developing and improving the UK’s urban
areas. The need for planning is at the heart of this process. Land Securities develops creative
projects and sets rigorous financial and non-financial objectives called Key Performance Indicators.
It is therefore able to exercise corporate responsibility in order to meet the needs of its seven different
stakeholder groups. Reporting on such developments enables Land Securities to inform its
stakeholders about what is happening within the business. It also enables its stakeholders to provide
valuable feedback for use within its planning cycle. This helps Land Securities to plan ahead.
Questions
1. What is the purpose of a plan?
2. Explain the role that key performance indicators have upon the planning cycle.