Planning in Organizations

Why do Managers plan?

Planning
Planning is the ongoing process of developing the business' mission and objectives and determining how they will be accomplished. The planning function provides the goals and standards that drive the controlling function. Planning is concerned with the future impact of today's decisions.

Types of Plans
Breadth Time Frame Specificity Frequency of Use

Breadth
Strategic Plans Operational Plans

Time Frame
Long Term
Short Term

Specificity
Directional Specific

Frequency of Use
Single Use Standing

How goals are set:

Traditional Approach
MbO (Management by Objectives)

Steps in Goal Setting

Review the organizations mission &

purpose Evaluate available resources Determine the goals individually or input from others. Write down the goals & communicate them to all who need to know Review results & whether goals are met.

Criticism of Planning
Planning creates rigidity

Plans cant be developed for a dynamic

environment Planning focuses managers attention on today's competition & on tomorrows survival. Just planning isn't enough.

Strategic Management
Strategic management is what mangers do to

develop an organizational strategy.

Strategic Management Process

Identifying the Organizations current Mission,

Goals & Strategy Doing an External Analysis Doing an Internal Analysis Formulating Strategies Implementing Strategies Evaluating Strategies

SWOT Analysis Indian Premier League (IPL)

Strengths The Indian Premier League (IPL) is based upon the

Twenty20 cricket game which should be completed in 2 hours. That means that is fast-paced and exciting, and moreover it can be played on a weekday evening or weekend afternoon. That makes it very appealing as a mass sport, just like American Football, Basketball and Soccer. It is appealing as a spectator sport, as well to TV audiences. The IPL has employed economists to structure its lead so that revenue is maximized. The more unified the sport, the more successful it is.

Weaknesses
Twenty20 has been so popular that it could replace

other forms of cricket i.e. damage the game that generated it. Stakes are very high! Some teams may not weather short-term failures and may be too quick to get rid of key managers and players if things don't go well quickly. Famously, Royal Challengers Bangalore (RCB) sacked their CEO Charu Sharma for watching his team lose 6 from their first 8 games. Some teams have overpriced their advertising/sponsorship in order to gain some shortterm returns (e.g. Royal Challengers), and some sponsors and are moving their investment the more reasonably priced teams.

Opportunities
Since it has a large potential mass audience, IPL is

very attractive as a marketing communications opportunity, especially for advertisers and sponsors. The league functions under a number of franchises. Each franchisee is responsible for marketing its team to gain as large a fan-base as possible. The long-term success of all of the franchises lies in the generation of a solid fan-base. The fan-base will generate large TV revenues. Different fans will pay different amounts to watch their sport. There will be corporate hospitality, season tickets, away tickets, TV pay-per-view and other ways to segment the market for the IPL.

 There is a huge opportunity for merchandising e.g.

sales of shirts, credit cards and other fan memorabilia. Grounds can also sell refreshments and other services during the games. Marketers believe that the teenage segments need to be targeted so that they become the long-term fan-base. Their parents and older cricket fans may prefer the longer, more traditional game. The youth market may also impress on their parents that they want them to buy their club's merchandise on their behalf - as a differentiator or status symbol. Franchise fees will remain fixed for the up until 2017-18, which means that the investment is safe against inflation which is traditionally relatively high in India.

Threats
The level of competition that the Board of Control for Cricket

in India (BCCI) can generate determines long-term viability of the league. If the level of competition drops, then revenue will fall. For example, if the top names in cricket cannot be attracted to India, the appeal of the game will fall. Often getting hold of the big names is a problem - Australian domestic cricket runs concurrent with the IPL and if players move form Australia to India to follow the money then their domestic game will be hit. This is known as 'Free Agency.' If the franchisee's fan-base does not generate income then they may not have the cash to pay the salaries of the best players. However, if you invest in the best players and they do not win the trophies, then you may not see a return on your investment. It won't be a quick return on investment - so owners need to be in it for the long-term. Franchises are very expensive. The most expensive franchise - Mumbai Indians - was bought by Mukesh Ambani for $111.9 million, whereas the lowest priced franchise Rajasthan Royals was picked up by Manoj Badale for a

Strategy???

Levels of Strategy
CORPORATE STRATEGY CORPORATE HEAD OFFICE

BUSINESS STRATEGY

Division A

Division B

R&D
FUNCTIONAL STRATEGIES

R&D Personnel Finance Production Marketing/Sales

Personnel Finance Production Marketing/Sales

Corporate Strategy
1. Growth

2. Stability
3. Renewal

Stability
A corporate strategy in which an organization continues

to do what it is currently doing.

Renewal
Retrenchment Strategy

Turnaround strategy

How to manage Corporate strategies

BCG matrix

Stars and Cash Cows

Stars: Businesses that fall into the high

market growth/high market share cell of the BCG matrix. Offer attractive profit and growth opportunities. Cash Cows: Businesses that fall into the low market growth/high market share cell of a BCG matrix. Generate substantial cash surpluses. Generally yesterdays stars that have matured.

Dogs and Question Marks

Dogs: Businesses that fall into the low

market growth/low market share cell of a BCG matrix.

Typically generate low profits, and in some cases

may even lose money.

Question Marks: Businesses that fall into

the high market growth/low market share cell of a BCG matrix.

Businesses that look attractive from an industry

standpoint, however, their low market share makes their profit potential uncertain.

Competitive Strategies
Having a competitive advantage is necessary

for a firm to compete in the market But what is more important is whether the competitive advantage is sustainable A firm must identify its position relative to the competition in the market By knowing if it is a leader, challenger, follower or nicher, it can adopt appropriate strategies to compete

Five Forces Model:

(1) potential entrants and barriers to entry (Threat of new entrants) (2) substitute and complementary products (Threat of substitutes) (3) the bargaining power of clients/customers (Bargaining power of buyers) (4) the bargaining power of suppliers ( Bargaining power of suppliers) (5) rivalry among existing firms in the industry (Current Rivalry)

Porters Competitive Strategies

Cost Leadership Strategy
Differentiation Strategy Focus Strategy

Cost Leadership Strategy

This strategy emphasizes efficiency. By producing high volumes of standardized products, the firm hopes to take advantage of economies of scale and experience curve effects.

Differentiation Strategy
Differentiation is aimed at the broad market that

involves the creation of a product or services that is perceived throughout its industry as unique.

Focus Strategy
In this strategy the firm concentrates on a select

few target markets. It is also called a focus strategy or niche strategy. It is hoped that by focusing your marketing efforts on one or two narrow market segments and tailoring your marketing mix to these specialized markets, you can better meet the needs of that target market.

Porters Competitive Strategies

Competitive Advantage Low Cost Uniqueness

Low-cost leadership

Differentiation

Board

Competitive Scope
Focused Differentiation

Narrow

Focused low-cost Leadership

KEY ELEMENTS OF McDONALDS STRATEGY

Adding 700-900 restaurants annually Using new menu items, low price specials, Extra Value

Meals to promote frequent customer visits

Being highly selective in granting franchises Choosing sites convenient to customers Focusing on limited product line & consistent quality Careful attention to store efficiency Extensive advertising & use of Mc prefix

Hiring courteous personnel; paying an equitable wage; &

providing good training

Thank You