CHAPTER 6
What is Planning?
Planning:
The primary management function:
- Is deciding on the organization’s objective or goals
- Establishing an overall strategy for achieving those goals
- Developing plans to coordinate activities
Types of planning:
Informal: not written down, short-term focus; specific to an organizational unit.
Formal: written, specific, and long-term focus, involves shared goals for the organization.
Strategic Management:
- what managers do to develop an organization’s strategies
Strategies:
- plans for how the organization will do what in its business, how it will compete successfully, and
how it will attract its customers in order to achieve its goals
Steps in the Strategic Management process:
1) Identify the organization’s current mission, goals, and strategies
2) a) External Analysis:
- opportunities
- threats
- competition
- components of the environment
b) Internal Analysis:
- strengths
- weaknesses
- resources
- capabilities
- core competencies
SWOT analysis
3) Formulate Strategies
- corporate
- business
- functional
4) Implement Strategies
5) Evaluate Results
- how effective has strategies been?
- what adjustments are necessary?
, Strategies Managers Use
Three organizational levels:
- corporate
- business
- functional
A corporate strategy:
- is an organizational strategy that specifies what businesses a company is in - or wants to be in -
and what it wants to do with those businesses.
- is when top managers decide what to do with those businesses.
- Three main types:
- growth
- stability
- renewal
Growth strategy:
- is a corporate strategy in which an organization expands the number of markets served or
products offered, either through its current business or through new business. An organization
may increase revenues, number of employees, or market share.
- organizations grow by using concentration, vertical integration, horizontal integration, or
diversification.
- by using concentration, the number of products offered increases
- vertical integration, either backward, forward, or both. In backward vertical integration, the
organization becomes its own supplier. In forward vertical integration, the organization becomes
its own distributor.
- horizontal integration, company grows by combining with competitor
- diversification, either related or unrelated. Related diversification is when a company combines
with other companies in different, but related, industries. Unrelated diversification is when a
company combines with firms in different and unrelated industries.
Stability strategy:
- is when the organization continues to do what it is currently doing, like offering the same
customers the same product or service, and sustaining the organization’s current business
operations.
- the organization doesn’t grow, but doesn’t fall behind
What is Planning?
Planning:
The primary management function:
- Is deciding on the organization’s objective or goals
- Establishing an overall strategy for achieving those goals
- Developing plans to coordinate activities
Types of planning:
Informal: not written down, short-term focus; specific to an organizational unit.
Formal: written, specific, and long-term focus, involves shared goals for the organization.
Strategic Management:
- what managers do to develop an organization’s strategies
Strategies:
- plans for how the organization will do what in its business, how it will compete successfully, and
how it will attract its customers in order to achieve its goals
Steps in the Strategic Management process:
1) Identify the organization’s current mission, goals, and strategies
2) a) External Analysis:
- opportunities
- threats
- competition
- components of the environment
b) Internal Analysis:
- strengths
- weaknesses
- resources
- capabilities
- core competencies
SWOT analysis
3) Formulate Strategies
- corporate
- business
- functional
4) Implement Strategies
5) Evaluate Results
- how effective has strategies been?
- what adjustments are necessary?
, Strategies Managers Use
Three organizational levels:
- corporate
- business
- functional
A corporate strategy:
- is an organizational strategy that specifies what businesses a company is in - or wants to be in -
and what it wants to do with those businesses.
- is when top managers decide what to do with those businesses.
- Three main types:
- growth
- stability
- renewal
Growth strategy:
- is a corporate strategy in which an organization expands the number of markets served or
products offered, either through its current business or through new business. An organization
may increase revenues, number of employees, or market share.
- organizations grow by using concentration, vertical integration, horizontal integration, or
diversification.
- by using concentration, the number of products offered increases
- vertical integration, either backward, forward, or both. In backward vertical integration, the
organization becomes its own supplier. In forward vertical integration, the organization becomes
its own distributor.
- horizontal integration, company grows by combining with competitor
- diversification, either related or unrelated. Related diversification is when a company combines
with other companies in different, but related, industries. Unrelated diversification is when a
company combines with firms in different and unrelated industries.
Stability strategy:
- is when the organization continues to do what it is currently doing, like offering the same
customers the same product or service, and sustaining the organization’s current business
operations.
- the organization doesn’t grow, but doesn’t fall behind
