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PLANNING PROCESS

PLANNING PROCESS
IDENTIFICATION
EVAUATION OF
OF PRESENT OPPORTUNITIES
SITUATION AND THREATS

BUDGETING
STRATEGIC GOAL SETTING
PLANNING OPERATION
PLANNING

DETERMINATION PROGRAMMING
OF PREMISES
MATCHING PROCESS:
(EVALUATION OF
ATERNATIVES AND
SELECTION OF COURSE OF
ACTION)
EXAMPLE OF PERCEIVED OPPORTUNITIES IN
THE ENVIRONMENT
• DEMAND FOR LOW COST HOUSING AND CONSTRUCTION MATERIAL
• DEMAND FOR SMALLER CAR
• DEMAND FOR IMPORT-SUBSTITUTE

EXAMPLE OF PERCEIVED THREATS TO A FIRM


• NEW LEGISLATION
• INCREASE COMPETITION
• PRICE CONTROL
EVAUATION OF PRESENT SITUATION

P400M POTENTIAL REVENUE LINE (WITH EXPANSION

200M GAP
100M MOMENTUM REVENUE (WITHOUT EXPANSION)

0
5 YEARS
SETTING GOALS AND OBJECTIVE
SOME FIRMS FORMULATE IN THREE STAGES
• FIRST STAGE - IS STATEMENT OF PURPOSE OR THE REASON FOR
BEING FOR THE ORGANIZATION
• SECOND STAGE- IS THE STATEMENT OF SCOPE OF ACTIVITIES IT WILL
UNDERTAKE TO ACHIEVE THE PURPOSE
• LASTLY- IS THE STATEMENT OF OBJECTIVE CLARIFIES THE LEVEL OF
PERFORMANCE TO BE ACHIEVE IN THESE ACTIVITIES
EXAMPLE OF STATEMENT DEPARTMENT
STORE
• PURPOSE: BE A HIGHLY PROFITABLE COMPANY FOR ITS INVESTORS
• MISSION: RETAIL THE WIDEST RANGE OF CONSUMER PRODUCT TO
ALL INCOME GROUPS
• OBJECTIVE: MAINTAIN LEADERSHIP IN SALES IN THE RETAIL TRADE
INDUSTRY
-MAINTAIN HARMONIOUS RELATION WITH EMPLOYESS
AND SUPPLIERS
DETERMINING PLANNING PREMISES
• EXTERNAL VARIABLES
• THE RATE OF GROWTH OF THE ECONOMY AND/OR THE INDUSTRY
• THE RATE OF INFLATION AND ITS EXPECTED IMPACTS ON COST AND PRICE
• THE CONTINUANCE OR DISCONTINUANCE OF CERTAIN GOVERNMENT POLICIES WHICH
HAVE FAVORABLE OR UNFAVORABLE IMPACT ON THE OPERATION OF THE FIRM, HIGH
INTEREST RATE ETC
• THE EXPECTED MARKET STRATEGIES OF KEY COMPETITORS
• INTERNAL VARIABLES
• THE LEVEL OF INTERNALLY GENERATED FUNDS TO SUPPORT INVESTMENT
• THE LEVEL OF LABOR PRODUCTIVITY IN THE COMPANY’S FACTORIES
• THE COMPANY TOTAL STAFFING LEVEL
• THE CONTINUANCE OF CERTAIN OPERATING POLICIES, RATE OF DIVIDEND, CHOICE OF
PRODUCTION TECHNOLOGY, SUPPLY SOURCE, ETC
EVALUATING ALTERNATIVES
• THE IDENTIFICATION OF OPPORTUNITIES AND THREATS IN THE FIRST
STAGE OF PLANNING PROCESS ASSESSES THE EXTERNA FACTOR
WHILE THE EVALUATION OF PRESENT SITUATION CONSIDERS
INTERNAL FACTOR. THE CONSIDERATION OF BOTH RELATES THE FIRM
INTERNAL CAPABILITIES AND RESOURCES
EX: FINANCIAL, HUMAN, PHYSICAL FACILITIES ETC
PROGRAMMING
PROGRAMMING PROCESS INVOLVES
• THE PREPARATION AND ANALYSIS OF PROPSALS FOR NEW PRODUCTS AND MAKING DECISION ON
THESE PROPOSALS
• THE EVALUATION OF ON GOING PRODUCT LINES WITH THE OBJECTIVE OF IMPROVING THEIR
PROFITABILITY
• THE COORDINATION OF THE SEPARATE PROGRAMS FOR THE OPTIMUM PROFITS OF THE ENTERPRISE
MARKETING PLAN- FOR EACH PRODUCT LINE CONSISTING OF PRICING POLICIES, PRODUCT DEVELOPMENT,
PROMOTIONAL EFFORT, DISTRIBUTION CHANNEL AND PERSONNE REQUIREMENT
PRODUCTION PLAN- FOR EACH PRODUCT LINE INCLUDING PLANT CAPACITY AND UTILIZATION, INVENTORY
LEVEL, AND OTHER PRODUCTION ACTIVITIES
CAPITAL EXPENDITURE PLAN- FOR PRODUCT LINE AND COMPANY WIDE PURCHASES OF MACHINERIES OR
EQUIPMENT; CONSTRUCTION OF BUILDING LONG TERM LEASES
STAFF PLAN- DESCRIBING TE NATURE AND SIZE OF STAFF UNITS EX( INCREASE IN COMPUTER PERSONNEL
BY CONTROLLERSHIP DIVISION MANAGER
BUDGETING
TYPES OF BUDGETING OPERATION
1. REVENUE BUDGET – CONSISTS OF UNITS SALES PROJECTIONS MULTIPLIED EXPECTED
SELLING PRICES
2. EXPENSE BUDGET – CONSIST OF COSTS OF GOODS SOLD AND OTHER OPERATING
EXPENSES AT THE EXPECTED LEVEL OF OPERATION