PLANNING

CHAPTER 5
• Planning is important in
management because it
provides security and
organization to the
company.
• A manager needs to plan
the expectations and
regulations that the
company needs.
What is
planning?
Planning (is also called forethought) is
the process of thinking about and
organizing the activities required to
achieve a desired goal.
•Planning is basic or primary function of
management.
•Planning is the process of setting goal
and selecting best course of action to
reach the goal. It is looking ahead.

•Planning is deciding in advance, what to

do, who is to do, how to do and when to
do.
Planning bridge the
gap between where
we are and where we
want to go.

Planning provide target,

they allocate resources in
a coordinate manner.

Planning also solve

as standard for
control.
 VISION
• A vision is a mental picture that you have and
want to turn into a reality in the future.
• For example – Malaysia, Vision 2020
• This vision has to be clear to enable the
organisation to determine its mission, and
then translate this mission into set of long
term, medium-term and short term
objectives.
 MISSION
• A mission statement is a broad declaration of
the basic and unique purpose and scope of
operations of the organisation which
differentiates that organisation from others.
• Purpose or reason for the organization’s
existence.
• “Mission is an enduring statement of purpose
that distinguishes one firm from other similar
firm.”
 To Be CLEAR….
 A mission statement concerns what an enterprise
is all about.
 A vision statement is what the enterprise wants
to become.
Vision
To be the centre of excellence in the field of
continuing education
Mission
To provide continuing education opportunities to the
public, both local and international, by offering
courses and activities with the aim of enhancing an
individual knowledge, skills and competency in
terms of professional or self development.
 VISION AND MISSION
MISSION STATEMENT VISION STATEMENT

A Mission statement talks about HOW A Vision statement outlines WHERE you want to be.
you will get to where you want to be. Communicates both the purpose and values of your
ABOUT Defines the purpose and primary business.
objectives related to your customer
needs and team values.
It answers the question, “What do we It answers the question, “Where do we aim to be?”
do? What makes us different?”
ANSWER

A mission statement talks about the A vision statement talks about your future.
TIME present leading to its future.
It lists the broad goals for which the It lists where you see yourself some years from now. It
organization is formed. Its prime inspires you to give your best. It shapes your
function is internal; to define the key understanding of why you are working here.
FUNCTION measure or measures of the
organization's success and its prime
audience is the leadership, team and
stockholders.
Your mission statement may change, but As your organization evolves, you might feel tempted
it should still tie back to your core to change your vision. However, mission or vision
CHANGE values, customer needs and vision. statements explain your organization's foundation, so
change should be kept to a minimum.
Strategic Plans
To best understand the relationship between the
different types of plans, let's start at the top. Strategic
plans are designed with the entire organization in mind
and begin with an organization's mission. Top-level
managers, such as CEOs or presidents, will design and
execute strategic plans to paint a picture of the desired
future and long-term goals of the organization.
Essentially, strategic plans look ahead to where the
organization wants to be in three, five, even ten years.
Strategic plans, provided by top-level managers, serve
as the framework for lower-level planning.
 TACTICAL PLANS
Tactical plans support strategic plans by
translating them into specific plans relevant to
a distinct area of the organization. Tactical
plans are concerned with the responsibility and
functionality of lower-level departments to fulfill
their parts of the strategic plan.
 Tactical Plans cont’…
For example, when …………, the middle-
level manager at THAITANIC PIZZA,
learns about ………….. strategic plan for
increasing productivity, ………………
immediately begins to think about
possible tactical plans to ensure that
happens.
Tactical planning for …………. might include:

1. Testing a new process in making pizzas that has been

proven shorten the amount of time it takes for preparing
the pizza to be cooked.

2. Looking into purchasing a better oven that can speed up

the amount of time it takes to cook a pizza

3. Considering ways to better map out delivery routes and

drivers.
OPERATIONAL PLANS

 Operational plans sit at the bottom of

the totem pole; they are the plans that are
made by frontline, or low-level, managers.

All operational plans are focused on the

specific procedures and processes.

Occur within the lowest levels of the

organization.
1st Way:
 2nd Way:
 3rd Way:
OPERATIONAL PLANS
…………. , the frontline manager at THAITANIC
PIZZA, is responsible for operational planning.
Operational planning activities for …………
would include things like scheduling employees
each week; assessing, ordering and stocking
inventory; creating a monthly budget;
developing a promotional advertisement for the
quarter to increase the sales of a certain product
(such as the Hawaiian pizza) or outlining an
employee's performance goals for the year.
 Operational plans can be either single-use or ongoing
plans. Single-use plans are those plans that are intended to be
used only once. They include activities that would not be
repeated and often have an expiration. Creating a monthly
budget and developing a promotional advertisement for the
quarter to increase the sales of a certain product are examples
of how Devin would utilize single-use planning.

Operational plans are made by low-level managers.

Ongoing plans are those plans that are built to withstand the
test of time. They are created with the intent to be used several
times and undergo changes when necessary.
CONTINGENCY PLANS

Even the best plans can fail, especially in today's fast-

paced, chaotic business environment, and as such, it is
important for managers at all levels to engage in contingency
planning. Contingency plans allow a manager to be flexible
and change-savvy by providing an alternative course of
action, which can be implemented if and when an original
plan fails to produce the anticipated result. Having a
contingency plan might seem like extra work, but much like a
reserve parachute when skydiving, it's better to have it and
not need it than to need it and not have it.
 SWOT Analysis

S W O T
 SWOT ANALYSIS
 SWOT is a structured planning tool that can
be used to evaluate the Strengths,
Weaknesses, Opportunities, and Threats
involved in running a business venture.
 Using a SWOT analysis can be used to help a
business determine the advantages or
disadvantages of changes they want to make
based on internal and external factors.
 SWOT Analysis

SWOT is a summary of your

• Strengths
Internal
• Weaknesses
• Opportunities
External
• Threats
 Internal vs. External
• Strengths and Weaknesses are considered
internal factors---meaning you as the business
owner can control them.

• Opportunities and Threats are considered

external factors---meaning you have little control
over them. It is your job as a business owner to
respond appropriately .
What is SWOT Analysis?

STRENGTHS
Characteristics of the business or a team that
give it an advantage over others in the industry.

Positive tangible and intangible attributes, internal

to an organization.

Beneficial aspects of the organization or the

capabilities of an organization, which includes
human competencies, process capabilities,
financial resources, products and services,
customer goodwill and brand loyalty.

Examples -, Well-known brand name,, Lower costs

[raw materials or processes], Superior
management talent, Better marketing skills, Good
distribution skills, Committed employees.
 What is SWOT Analysis?

WEAKNESSES

Characteristics that place the firm at

a disadvantage relative to others.

Detract the organization from its ability to

attain the core goal and influence its
growth.

Weaknesses are the factors which do not

meet the standards we feel they should
meet. However, sometimes weaknesses are
controllable. They must be minimized and
eliminated.

Examples - Limited financial resources, Limited

distribution, Higher costs, Out-of-date
products / technology, Weak market image,
Poor marketing skills, Limited management
skills.
 What is SWOT Analysis?

OPPORTUNITIES

Chances to make greater profits in the environment -

External attractive factors that represent the reason for
an organization to exist & develop.

Arise when an organization can take benefit of

conditions in its environment to plan and execute
strategies that enable it to become more profitable.

Organization should be careful and recognize the

opportunities and grasp them whenever they arise.
Opportunities may arise from market, competition,
industry/government and technology.

Examples - Rapid market growth, Changing

customer needs/tastes, New uses for product
discovered, Economic boom, Sales decline for
a substitute product .
 What
SWOT is SWOT
ANALYSIS Analysis?
- THREAT

THREATS

External elements in the environment that could

cause trouble for the business - External
factors, beyond an organization’s control, which
could place the organization’s mission or !
operation at risk.

Arise when conditions in external environment

jeopardize the reliability and profitability of the
organization’s business.

Examples - Entry of foreign competitors,

Changing customer needs/tastes, Rival firms,
adopt new strategies, Increased government
regulation, Economic downturn.
S = good market presence locally, steady accepted brand by
middle income and lower income groups, good brand locally,
government backing

W = overdependence on government backing, poor quality

perception amongst local consumers

O = good partnership with Japanese

T = Very established presence of Japanese and Korean

makers – Honda, Toyota, Hyundai, and local players such as
Naza and Perodua
PEST ANALYSIS
PEST ANALYSIS
 POLITICAL
• Marketing decisions are strongly affected by
developments in the political environment.
• The political environment consists of laws,
government agencies, and pressure groups that
influence or limit various organizations and
individuals in a given society.
ECONOMICS

• The economic environment consists of

economic factors that affect consumer
purchasing power and spending patterns.
• Marketers must pay close attention to major
trends and consumer spending patterns both
across and within their world markets.
SOCIAL
• The cultural environment consists of institutions
and other forces that affect a society’s basic
values, perceptions, preferences, and behaviors.
• People grow up in a particular society that shapes
their basic beliefs and values. They absorb a
worldview that defines their relationships with
others.
• The following cultural characteristics can affect
marketing decision making.
TECHNOLOGY
• Forces that create new technologies, creating
new product and market opportunities.
 MICHEAL PORTERS 5 FORCES

• This theory is based on the concept that there are

five forces that determine the competitive intensity
and attractiveness of a market. Porter’s five forces
help to identify where power lies in a business
situation.
Threat of new entrants
• A new entry of a competitor into your market also
weakens your power. Threat of new entry depends
upon entry and exit barriers:

- Capital requirements to start the business are less.

- Customers can easily switch (low switching cost).
-Your key technology is not hard to acquire or isn’t
protected well.
-Your product is not differentiated.
Bargaining Power of Customers
• The bargaining power of customers determines how
much customers can impose pressure on margins
and volumes. Customers bargaining power is likely to
be high when:

- The product is undifferentiated and can be replaces

by substitutes.
- Switching to an alternative product is relatively
simple and is not related to high costs.
Threat of substitute products
• Means how easily your customers can switch to your
competitors product. Threat of substitute is high
when:
- There are many substitute products available
- Customer can easily find the product or service that
you are offering at the same or less price
- Quality of the competitors’ product is better
Bargaining Power of supplier
• Means how strong is the position of a seller. How
much your supplier have control over increasing the
Price of supplies. Suppliers are more powerful
when:
- Suppliers are concentrated and well organized.
- Their product is most effective or unique.
- Switching cost, from one suppliers to another, is
high.
- You are not an important customer to Supplier.
Industry rivalry
• Mean the intensity of competition among the
existing competitors in the market. Intensity of
rivalry depends on the number of competitors and
their capabilities. Industry rivalry is high when:
- Customers have low switching costs.
- Industry is growing.
• These situations make the reasons for advertising
wars, price wars, modifications, ultimately costs
increase.
 COST LEADERSHIP
• Cost leadership is a concept developed by
Michael Porter, used in business strategy. It
describes a way to establish the competitive
advantage.
• Cost leadership, in basic words, means the
lowest cost of operation in the industry.
• Strategy used by businesses to create a low
cost of operation
EXAMPLES OF COST LEADERSHIP
• McDonald's - McDonald's has
been extremely successful with
this strategy by offering basic fast-
food meals at low prices.
 DIFFERENTIATION
• Differentiation involves making your products or
services different from and more attractive
than those of your competitors. To make a success of
a Differentiation strategy, organizations need:
 Good research, development and innovation.
 The ability to deliver high-quality products or
services.
 Effective sales and marketing, so that the market
understands the benefits offered by the
differentiated offerings.
EXAMPLES OF DIFFERENTIATION
• Starbucks has secured
a competitive
advantage with its
unique, yet
diversifying product
offerings.
 FOCUS
• Under a focus strategy a business focuses its effort
on one particular segment of the market and aims to
become well known for providing products/services
for that segment.
• They form a competitive advantage by catering for
the specific needs and wants of their niche market.