BE 2601

Management Principles,
Competencies and Skills

Welcome Back!

Dr Koh Cheng Boon

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Lesson 4: PLANNING FOR BUSINESS
OPERATIONS PART I (CHAPTER 4)

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 Lesson 4: PLANNING FOR BUSINESS OPERATIONS PART I
Strategic management SWOT analysis
Definition of planning
process
• Future goals and
activities
• Individual, team or • Establish vision, Analysis of external
organisational level mission, values and opportunities and threats
goals • Industry and market
• Analyse external analysis
opportunities and • Competitor analysis
threats • Political and regulatory
Basic process of planning • Analyse internal analysis
• Situational analysis strengths and • Social analysis
• Alternative goals and • Human resource analysis
weaknesses
plans • Macroeconomic analysis
• Goal and plan
• Conduct SWOT • Technological analysis
evaluation analysis and strategy
• Goal and plan formulation
selection • Implement strategy
• Implementation • Perform strategic
• Monitor and control control Analysis of internal strengths
and weaknesses
Strategy formulation, • Tangible and intangible
Strategy map - Balanced implementation and control resources
Levels of planning and scorecard will be covered in Lesson 5 • Core competencies
goal alignment • Financial goals • Competitive edge
• Strategic • Customer goals
• Tactical • Internal goals
• Operational • Learning and growth goals

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 Definition of planning
• Future goals and
What is planning? activities
• Individual, team or
organisational level

Conscious &
Goals &
systematic Planning
Activities
process

Draws on
Directed & Provide a clear
knowledge &
controlled by map for future
Managers experience of
activities
employees

Purposeful Effort

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Basic Planning Process

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Basic Planning Process

2. Alternative goals 3. Goal and plan

1. Situational Analysis
and plans evaluation

4. Goal and plan

6. Monitor & change 5. Implementation
selection

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Situational Analysis

Internal organizational
environment

 Past events
 Present conditions Competitive
Environment
 Future trends

Macro Environment

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Alternative goals and plans: SMART Goal Setting

 Goal: target or desired outcome

 Plans: actions or means managers

intend to use to attain
organizational goals
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Contingency Planning

Create Contingency Plans BEFORE

the initial plan fails and as soon as
obstacles are discovered

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Goal and Plan Evaluation

 Prioritise goals
 Eliminate unessential goals
 Future Implications

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Goal and Plan Selection

Failure Wealth Growth

Busy Success

Bankrupt, Decline, Boom

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Implementation

Goals

Plans

Resources

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Monitor and change

Checklist
Change

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Strategic Goals

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Strategic Goals
Revenue,
profitability &
market share

Major targets or
Contribution end results that ROI
to society
relate to long-term
survival, value and
growth

Quality and
Productivity
quantity
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Levels of Planning

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Levels of Planning

Strategic Planning
Managerial Level Level of Detail Time Horizon

Strategic Top Low Long (3-7 yrs)

Tactical Planning
Tactical Middle Medium Medium (1-2 yrs)

Operational Planning Operational Frontline High Short (<1 yr)

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Balanced Scorecard

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Balanced Scorecard

Learning and Growth

Financial Goals Customer Goals Internal Goals
Goals

• Productivity growth • Operational • Innovation • Improved

excellence competence/skills of
• Revenue growth • Increased value to workforce
• Exceptional customer customers
service • Effective Information
• Operational Technology Systems
• Product Leadership improvements
• Support Values and
• Effective relationships practices
with stakeholders

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 Strategy map - Balanced
Levels of planning and scorecard
Balanced scorecard: An example goal alignment
• Strategic • Financial goals
• Tactical • Customer goals
• Operational • Internal goals
• Learning and growth
goals

Strategy map - Balanced

scorecard

• Financial goals Example

• Customer goals
• Internal goals
• Learning and growth goals

Practice: Improved
competency is under which
goal?
https://www.intrafocus.com/2016/06/balanced-scorecard-example/

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Strategy Management

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Strategy Map: Creating value by aligning goals

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 Strategic Management Process

Step 3: Analyzing
Step 1: Establishing internal
mission, vision, and strengths and
goals weaknesses Step 4: SWOT analysis and
strategy formulation
Step 2: Analyzing
external
opportunities and
threats

Step 6: Strategic Step 5: Strategy

control implementation

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 Step 1: Establishing mission, vision, and goals

Step 1: Establishing mission, vision, and goals

Mission statement (what we actually do)

Mission Purpose: What the organization does Vision statement (what we aspire to do)

Strategic Future direction: perspective on where the

vision organization is headed and what it can Example: Armstrong Flight Research Centre: “a
become world where everyone has a decent place to live.”

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Step 2: Analyzing external opportunities and threats

Environmental • Begin with Industry to various areas

Analysis • (see next slide)

• Organizational stakeholders are groups &

Stakeholder individuals who affect and are affected by
Analysis the achievement of organization’s mission,
goals and strategies

 Difference Opportunity and Threat = How a company positions itself strategically

 Opportunity = thinking creatively in the face of serious threats (e.g., the HDB Car Park Sign Making
Company, when there was an increase in Car Park Prices, everyone was so sad, this old man saw
the opportunity and became….)
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 1. Environmental Analysis

Environmental Analysis
Industry and Market 1. Industry profile: major production lines and significant market segments in the industry.
Analysis 2. Industry growth: growth rates for the entire industry, growth rates for key market segment, projected changes in patterns of growth, and
the determinants of growth.
3. Industry forces: threat of new industry entrants, threat of substitutes, economic power of buyers, economic power of suppliers, and internal
industry rivalry (Chp 2)
Competitors Analysis 1. Competitors profile: major competitors and their market shares
2. Competitors analysis: goals, strategies, strengths, and weaknesses of each major competitor.
3. Competitor advantages: the degree to which industry competitors have differentiate their products or services or achieved cost leadership
Political and Regulatory 1. Legislation and regulatory activities and their effects on the industry
Analysis 2. Political activity: the level of political activity that organizations and associations within the industry undertake (Chp 5)
Social Analysis 1. Social issues: current and potential social issues and the effects on the industry
2. Social interest group: consumer, environmental, and similar activist groups that attempt to influence the industry (Chp 5 & 6)
Human Resources 1. Labor issues: key labor needs, shortages, opportunities, and problems confronting the industry (Chp 10 & 11)
Analysis
Macroeconomic 1. Macroeconomic conditions: economic factors that affect supply, demand, growth, competition, and profitability within the industry.
Analysis
Technological Analysis Technological factors: scientific or technical methods that affect the industry particularly recent and potential innovations (Chp 17)

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2. Stakeholder Analysis

Organizational stakeholders are

Buyers, suppliers, competitors,
groups & individuals who affect
and are affected by the government regulatory agencies,
achievement of organization’s unions and employee group,
mission, goals and strategies financial community, owners and
shareholders, and trade associates

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Step 3: Analyzing internal strengths and weaknesses

1. Resources and Core Capability

2. Benchmarking

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1. Resources and Core Capability

Resources are rare Resources are organized

Core Capability

Resources are inimitable Resources are valuable

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 2. Benchmarking
• According to Accenture, benchmarking consists of four stages

Decide
Collect
Decide what needs
to be measured and Collect and validate Assess
which metrics will be the data: Compile Analyze
used initial findings Assess initial findings
to see if additional Analyze results and
data need to be make final
recommendations to
collected
key stakeholders

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Step 4: SWOT analysis and strategy formulation Step 4: SWOT analysis and
strategy formulation

Analysis of external
opportunities and threats
• Industry and market
analysis
• Competitor analysis
• Political and regulatory
analysis
• Social analysis
• Human resource analysis
• Macroeconomic analysis
• Technological analysis

Analysis of internal strengths

and weaknesses
• Tangible and intangible
resources
• Core competencies
• Competitive edge

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SWOT Analysis

External Macroenvironment
Internal Resources & Competitive Environment
Strengths Opportunities

Weaknesses Threats

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 SWOT Analysis

External Macroenvironment
Internal Resources & Competitive Environment
Strengths Opportunities

Weaknesses Threats

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Self- SWOT Analysis: for your Self-practice/development

You can do a self-SWOT to assess your employability

Strengths Opportunities

Weaknesses Threats

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 Questions?

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Case Details

• Mr. Giam decides to re-position his company so that it could propel with higher growth and increase the company’s revenue as
it progresses ahead. As a strategic goal, he aspires to focus on innovation and customer excellence. He wants all his employees
to be customer centric, to engage and serve the customers with high-quality service and travel experience. While Mr. Giam is
visioning these aspirations, he also realised that there are many new entrants as start-up travel agencies which are
mushrooming up due to a recent generous government funding introduced for local entrepreneurs to start businesses in the
hospitality industry. This has caused the ripple effects of many leveraging on the government grants to explore possibilities of
business ventures in this industry. The lifestyle and trend of Singaporeans have mainly shifted to a more work-life balance which
shows a national statistical shift towards more families going for vacations, especially during the school holidays. Due to the
good economic situation for the past two to three years, the spending power per household has also been relatively high and
stable. Mr. Giam has been progressively upgrading his company e-services; offering e-booking travel services which gives loyal
customers a 1% discount in the overall travel fare, site for sharing their experiences of the various travel services offered and
even a 24-hour online service chat to address emergency queries. However, Mr. Giam feels that the service staff are not up to
the high standards he is expecting them to perform, which shows up through customer complaints and feedback. He wants to
allocate more financial resources for the staff training and development. He believes that this will increase the confidence of his
staff and result in better performance and higher customer satisfaction. This will generate more return customers, higher
revenue and the highly effective spreading of the ‘good word of mouth’.

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 Six Questions for Reflection
Q1. Using Step 1 of the strategic management process, you are to apply the concepts and knowledge that you have learned in
comprehending the bases of the vision and mission statements and assist Mr. Giam devise their vision and mission statements.
 Devise the Proposed Vision (in no more than 25 words).

Q2. Devise the Proposed Mission (in no more than 25 words).

Q3. For Questions 3 to 6, you are expected to use the SWOT Analysis as Step 2 of the strategic management process to analyse the
company’s current situation by stating one issue for each element of the SWOT analysis.
• Describe one issue (in no more than 50 words) relating to SWOT Analysis – Strength.
Strengths Weaknesses
Q4. Describe one issue (in no more than 50 words) relating to SWOT Analysis – Weakness.
SWOT
Q5. Describe one issue (in no more than 50 words) relating to SWOT Analysis – Opportunity.
Opportunities Threats
Q6. Describe one issue (in no more than 50 words) relating to SWOT Analysis – Threat.

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 Questions?

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 Activity 1: Case study

Tree House Hunt (p. 171)

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 Background of Tree House Hut (THH)

Tree House Hut is a tree-top restaurant that provides an exclusive dining experience serving Asian cuisine with
elegant exotic food dishes.

 Became popular through word-of-mouth and good service

 Motivated staff of 15 employees

 Creative facilities, but located on outskirts of town.

 Overall ambience of coziness and exclusiveness yet to be achieve

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Key Issues:

 Area around THH developed, with residential buildings and more restaurants coming up

 Sales revenue dropped substantially with customers going to other restaurants

 No budget control (overspending)  Cash earnings spent on renovating interior and

facilities

 Employee bonuses frozen Affected team morale

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 Questions

Question 1:
As a newly appointed business consultant, you are required to advise Tree House Hut in terms of attaining competitive edge and
sustainability across the three levels of planning, namely strategic, tactical, and operational. Identify and discuss one (1) key issue
that needs to be addressed to achieve sustainability at each of the planning levels.

Question 2:
As a consultant, you intend to use the balance scorecard to address the current issues in the organization and aim to achieve
productivity and a better performance for the company. (Note: A strategy map provides a tool to communicate strategic goals so
that all employees at all levels can understand how they can help to achieve them. An example of a strategy map is the Balanced
Scorecard.)
By using the balance scorecard framework, advice the company how it could achieve (i) Learning and Growth Goals; (ii) Firm’s
Internal Goals; (iii) Customer Goals; For each of three categories above, identify one (1) element and briefly (in 2–3 sentences)
state how this could achieved.

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 Activity 1: Case study

Tree House Hunt (p. 171)

Activity: World Café

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 Questions?

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End of Lesson

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