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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.html7/30/2019 Planning Pom (2)
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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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