Business Management Strategies PDF

18A- Environmental Scanning ‹#› The goal is to detect emerging trends, to anticipate and interpret changes in the environment. Competitor intelligence is gathering information about their competitors. Managers have expanded their scope to ga...

18A- Environmental Scanning ‹#› The goal is to detect emerging trends, to anticipate and interpret changes in the environment. Competitor intelligence is gathering information about their competitors. Managers have expanded their scope to gain vital information on global forces that might affect their organizations. Copyright © 2018 Pearson Education, Inc.  18A- Forecasting ‹#› Forecasts: predictions of outcome Quantitative forecasting: forecasting that applies a set of mathematical rules to a series of past data to predict outcomes Qualitative forecasting: forecasting that uses the judgment and opinions of knowledgeable individuals to predict outcomes Copyright © 2018 Pearson Education, Inc.  18A-‹#› 18A- Exhibit PC-1: Forecasting Techniques: Quantitative ‹#› Technique Description Application Fits a trend line to a mathematical Predicting next quarter’s sales Time series equation and projects into the future on the basis of four years of analysis by means of this equation previous sales data Regression Predicts one variable on the basis of will predict a certain level of models known or assumed other variables sales (e.g., price, advertising Predicting change in car sales Econometric Uses a set of regression equations to as a result of changes in tax models simulate segments of the economy laws Economic Using change in GNP to predict to predict a future state of the indicators discretionary g income Substitution economy predict how, when, and under what streaming video services on the effect circumstances a new product or sale of Blu ray players Copyright © 2018 Pearson Education, Inc.  18A-‹#› 18A- Exhibit PC-1 ‹#› Forecasting Techniques: Qualitative Technique Description Application Polling the company s Jury of Combines and averages the human resource managers opinion opinions of experts to predict next year’s Sales force college recruitment Predicting next yearneeds s sales sales personnel of customers’ composition of industrial lasers t d h car dealers by a car Customer Combines estimates from manufacturer to determine evaluation established customers’ purchases types and quantities of d d i d Copyright © 2018 Pearson Education, Inc.  18A- Benchmarking ‹#› Benchmarking: the search for the best practices among competitors or noncompetitors that lead to their superior performance Copyright © 2018 Pearson Education, Inc.  18A-‹#› 18A- Exhibit PC-2 ‹#› Steps In Benchmarking Exhibit PC-2 illustrates the four steps typically used in benchmarking. Copyright © 2018 Pearson Education, Inc.  18A- Techniques for Allocating Resources ‹#› Resources: an organization’s assets—including nancial, physical, human, intangible, and structural/cultural—that are used to develop, manufacture, and deliver products to its customers Copyright © 2018 Pearson Education, Inc.  18A- Budgeting ‹#› Budget: a numerical plan for allocating resources to specific activities Budgeting: the process of allocating resources to pay for designated future costs Copyright © 2018 Pearson Education, Inc.  18A- Two Common Budgeting Approaches ‹#› Incremental budgeting: process starting with the current budget from which managers decide whether they need additional resources and the justification for requesting it Zero-based budgeting: Process starting with an established point of zero rather than using the current budget as the basis for adding, modifying, or subtracting resources Copyright © 2018 Pearson Education, Inc.  18A-‹#› 18A- Exhibit PC-3 ‹#› Types of Budgets Exhibit PC-3 describes the different types of budgets that managers might use. Copyright © 2018 Pearson Education, Inc.  18A-‹#› 18A- Exhibit PC-4 ‹#› How to Improve Budgeting Suggestion Collaborate and communicate. Be flexible. Goals should drive budgets—budgets should not determine goals. Coordinate budgeting throughout the organization. Use budgeting/planning software when appropriate. Remember that budgets are tools. Remember that profits result from smart management, not because you budgeted for them. Copyright © 2018 Pearson Education, Inc.  18A- Scheduling ‹#› Scheduling: detailing what activities have to be done, the order in which they are to be completed, who is to do each, and when they are to be completed Gantt chart: a scheduling chart developed by Henry Gantt that shows actual and planned output over a period of time Copyright © 2018 Pearson Education, Inc.  18A-‹#› 18A- Exhibit PC-5 ‹#› A Gantt Chart Exhibit PC-5 depicts a simplified Gantt chart for book production. Copyright © 2018 Pearson Education, Inc.  18A- Load Charts ‹#› Load chart: a modified Gantt chart that schedules capacity by entire departments or specific resources Copyright © 2018 Pearson Education, Inc.  18A-‹#› 18A- Exhibit PC-6 ‹#› A Load Chart Exhibit PC-6 shows a load chart for six production editors at the same publishing company. Copyright © 2018 Pearson Education, Inc.  18A- PERT Network Analysis (1 of 2) ‹#› PERT network: a flowchart diagram showing the sequence of activities needed to complete a project and the time or cost associated with each Events: end points that represent the completion of major activities in a PERT network Activities: the time or resources needed to progress from one event to another in a PERT network Copyright © 2018 Pearson Education, Inc.  18A- PERT Network Analysis (2 of 2) ‹#› Slack time: the amount of time an individual activity can be delayed without delaying the whole project Critical path: the longest sequence of activities in a PERT network Copyright © 2018 Pearson Education, Inc. Exhibit PC-7 18A-‹#› 18A- ‹#› Steps in Developing a PERT Network Step 1. Identify every significant activity that must be achieved for a project to be completed. The accomplishment of each activity results in a set of events or outcomes. 2. Determine the order in which these events must be completed. 3. Diagram the ow of activities from start to finish, identifying each activity and its relationship to all other activities. Use circles to indicate events and arrows to represent activities. This results in a flowchart diagram called a PERT network. u de dea co d t o s, a ost e y est ate (t ) o t e t e t e act ty o a y s ou d take, and a pessimistic estimate (tp) that represents the time that an activity should take under schedulethe for worst the possible start andconditions finish datesThe formula of each for calculating activity and for thethe expected entire time project. (te) is Any delays that occur along the critical path require the most attention because they can delay Copyright © 2018 Pearson Education, Inc. Exhibit PC-8: Events and Activities in 18A-‹#› 18A- ‹#› Constructing an Office Building Expected Preceding Event Description Time (in Event weeks) A Approve design and get permits 10 None B Dig subterranean garage 6 A C Erect frame and siding 14 B D Construct floor 6 C E Install windows 3 C F Put on roof 3 C G Install internal wiring 5 D, E, F H Install elevator 5 G I Put in floor covering and paneling 4 D J Put in doors and interior decorative trim 3 I, H K Turn over to building management group 1 J Copyright © 2018 Pearson Education, Inc.  18A-‹#› 18A- Exhibit PC-9: PERT Network for ‹#› Constructing an Office Building Exhibit PC-9 shows the actual PERT network based on the data in Exhibit PC-8. Copyright © 2018 Pearson Education, Inc.  18A- Breakeven Analysis ‹#› Breakeven analysis: a technique for identifying the point at which total revenue is just sufficient to cover total costs Breakeven point can be computed graphically or by using the formula: Copyright © 2018 Pearson Education, Inc.  18A-‹#› 18A- Exhibit PC-10 ‹#› Breakeven Analysis Exhibit PC-10 graphically represents the breakeven point for a scenario. Copyright © 2018 Pearson Education, Inc.  18A- Linear Programming ‹#› Linear programming: a mathematical technique that solves resource-allocation problems Copyright © 2018 Pearson Education, Inc.  18A-‹#› 18A- Exhibit PC-12: Graphical Solution to Linear ‹#› Programming Problem Exhibit PC-12 shows shows the graphical solution in Maria’s scenario. Copyright © 2018 Pearson Education, Inc.  18A- Project Management ‹#› Project: a one-time-only set of activities that has a definite beginning and ending point in time Project management: the task of getting a project’s activities done on time, within budget, and according to specifications Copyright © 2018 Pearson Education, Inc.  18A-‹#› 18A- Exhibit PC-13: ‹#› Project Planning Process The essential features of the project planning process are shown in Exhibit PC-13. Copyright © 2018 Pearson Education, Inc.  18A- Scenario Planning ‹#› Scenario: a consistent view of what the future is likely to be Copyright © 2018 Pearson Education, Inc. Exhibit PC-11: Production Data for 18A-‹#› 18A- ‹#› Cinnamon-Scented Products Number of Hours Number of Hours Monthly Production Department Required (per unit) Required (per unit) Capacity (in hours) Potpourri Bags Scented Candle Manufacturing 2 4 1200 Assembly 2 2 900 Profit per unit $10 $18 blank Copyright © 2018 Pearson Education, Inc.  18A-‹#› 18A- ‹#› Copyright © 2018 Pearson Education, Inc.