PLANNING

Mrs.Nupur Chhaniwal POM FMS-IRM

WHAT IS PLANNING
Planning is a continuous process of making present enterpreneurial decision(risk taking)systematically and with best possible knowledge of their futurity,organising systematically the effort needed to carry out these decisions and measuring the result of those decision against the expectations through an organised systematic feedback.Peter Drucker

Planning is the process of bridging the gap between where we are and where we want to be in the future.Looking ahead,relating todays event with tomorrows possibilities.It mini the risk and ensure that resource s are used effectively and efficiently.

Planning and controlling are inseparable.planning involves determining organisational objectives and developing strategies to achieve the objective,while controlling involves establishing standards of performance and comparing actual results with planned results.

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

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

Encourages innovation and creativity Facilitates delegation Ensures better coordination Facilitates control

Types of Plan
1.Plan based on organisational level
Levels Time Scope

Top-level

Long-term

Stategic plan

Middle-level

Intermediate-term plan Short-term plan

Tactical plan

First-level

Operational plan

2.Plan based onfrequencyof use

(i)Single use plans-Programs,projects (build new headquater,renovating) (ii)Standing plans-Budgets,Policies Procedure,Rules

3.Plan based on Time frame

Long term plan-direction
Intermediate term plan-specify the activities Short term plan-day to day work

Steps in planning process

Analyzi ng opportu nity

Establis hing objecti ves

Determ ing planning premise s

Identif ying alternat ive

Evaluati on

Selecti on

Implem entatio n

Review A

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

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

Planning process
Input-A portion of organisation
People,money Machine,raw material

Process(Planning Proccss)
All 8 steps are there of steps in Planning process

output
Organisation plan

Organisation Objectives

Defination
Organisation objectives are targets towards which the open management system is directed. It states the end result to be achieved by organisation.they form the basis of good planning.

Nature of Objectives
Hierarchy of objectives Process of formulating objectives and organisational hierarchy A network of objectives Multiplicity of objectives

Level of organisational hierarchy

Types of Objectives

Borad of directors

Vision,Mission,Overall objective of the firm Objectives in key result areasproductivity,physical,financial,innovation

Middle level

Divisional objectives Departmental objectives

Lower level

Department and unit objective Objective for subordinate-performance goals,development goal

Strategies,Policies and Planning Premises

Nature and Purpose of strategies and policies

Strategy-It refers to determination of mission and basic long-term objective of an enterprise and 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 when they make decision

Three level of strategy

Corporate strategy Business unit strategy
Vision Corporate goals

Philosophy,c ulture
Mission,busin ess goals,compet encies

Functional startegy

HR

RD

Marketin g

Finance

Corporate level strategy or portfolio level strategy it concerns board 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 their respective industries. Functional level strategy-are carried out by executives in functional areas which support business level decisions to introduce new technologies , develop new products , open new markets ,to implement action plans to help the firm compete effectively a marketing strategy with sales promotion , distribution, pricing etc. .

Planning Premises
It is defined as anticipated environment in which plans are expected to operate. Planning premises and future expectation

 The business portfolio is the collection of businesses and products that make up the company. The best business portfolio is one that fits the company's strengths and helps exploit 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 and businesses to the portfolio, whilst at the same time deciding when products and businesses should no longer be retained.

 The two best-known portfolio planning methods are from the Boston Consulting Group (the subject of this revision note) and by General Electric/Shell. In each method, the first step is to identify the various Strategic Business Units ("SBU's") in a company portfolio. An SBU is a unit of the company that has a separate mission and objectives and that can be planned independently from the other businesses. An SBU can be a company division, a product line or even individual brands - it all depends on how the company is organised.

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 - this serves as a measure of SBU strength in the market On the vertical axis: market growth rate - this provides a measure of market attractiveness

Nestle
Stars-Nescafe,Maggi Noodles Question Marks-Kitkat,Munch,Maggi soup,Maggi sauces Cash cows-Cerelac Dogs-Nestea,milky bar,nestle crunch

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 country inthe world and has become the first preferenceof Indian children in terms of instant food, butwith other competition prospects are changing (2) The reason essentially lies in the fact thatthough Maggi Noodles has a significantly highmarket share in the Noodles market in India,the market growth rate of Noodle consumptionis growing very high. (3) Though the number of repeat purchasers ishigh in case of Maggi, the rate of increaseamon the new purchasers is also rowin.

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 its salesincreasing 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

Question mark
The reason why these are is not placed as a dog is that it hasthe potential to expand and also because the product lies in a market with highbusiness growth rate. 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 the Indian psyche. It has huge avenues for growth especially analyzing theextending Indian market.

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 sweet chocolate with creamcolor. Thus the primary acceptance of Milky bar wasnot based on its core qualities but on the basis of certain peculiarities which it contained,differentiating it from other products 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 core quality which makes itgeneric with chocolates. This was the main reason

Porters 5 competitive force model

Generally, strategic planning commences with an analysis phase, where you seek to refresh your understanding of your businesses 3 key strategic environments, these three strategic 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 helps you to understand at the nature of competition within your industry, hence it is used when completing your industry analysis.

 Michael Porter developed a framework, which identified 5 forces that act to either increase or reduce 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