Planning Lecture Notes PDF

Planning Harry Kogetsidis School of Business  Lecture’s topics What is planning? Why is it important to analyse the external environment? How can we analyse the external environment? What are the basic steps of planning?  What is Planning? Planning includes de...

Planning Harry Kogetsidis School of Business  Lecture’s topics What is planning? Why is it important to analyse the external environment? How can we analyse the external environment? What are the basic steps of planning?  What is Planning? Planning includes defining goals and establishing strategies. Planning is concerned with ends as well as with means.  Advantages of Planning provides direction reduces uncertainty reduces wasteful or overlapping activities helps to use resources efficiently establishes standards that help people to monitor progress etc.  The external environment Planning is also very important because the external environment of an organisation is changing all the time.  Changes in the external environment new trends in the market advances in technology a new competitor new government policy the weather a disaster a financial crisis etc. The organisation’s external environment The micro environment - Porter’s five forces model The macro environment – PESTEL analysis  Types of Plans Strategic plans: apply to the entire organisation and establish the organisation’s overall objectives long-term Operational plans: specify how the overall objectives are to be achieved short-term  The Strategic Management Process the process that senior management goes through in order to develop the organisation’s strategy a five-step process that involves strategic planning, implementation and evaluation The Strategic Management Process  The Strategic Management Process Step 1: Identify the organisation’s current mission, goals and strategies.  The Strategic Management Process Step 2a: External analysis Identify opportunities (i.e. positive external environmental factors) and threats (i.e. negative external environmental factors). External analysis can be based on Porter’s five forces model and PESTEL analysis.  The Strategic Management Process Step 2b: Internal analysis Identify strengths (all the things that the organisation does well) and weaknesses (those things that the organisation does not do well or the resources it lacks).  The Strategic Management Process The organisation carries out a SWOT analysis by merging the externalities (step 2a) with the internalities (step 2b) in order to reassess its mission and goals. SWOT stands for Strengths, Weaknesses, Opportunities and Threats.  The Strategic Management Process Step 3: Formulate strategies. Step 4: Implement the selected strategies. Step 5: Evaluate the results.