Concepts of Management Last Exam I Concepts of Management Study Guide I CH 5 Planning 1 All about coping with uncertainty that is PLANNING REDUCES UNCERTAINTY ABOUT FUTURE 2 Planning coping with uncertainty by formulating future courses of action with GOALS and ACTIONS 3 Know this sequence of events makes sense logically 1 Establish Vision Statement 2 Establish Mission Statement 3 Formulate Grand Strategy 4 Implement plans 5 Control 6 Visibly Mr Gronk s In Control use to help remember order football fans im talking bout tight end for new england patriots 4 Defenders limit what they do and focus on certain set of customers market no expanding produce narrowly de ned products 5 Prospectors rst into a market produce new products 6 Analyzers second into a market watch what prospectors do they are going to imitate them imitate thing that look successful minimize risk by being seconds let others take product development risk and use their info 7 Reactors react as situation aries no game plan bad idea not best one 8 3 levels of plans a strategic top manager 1 5 years out up to 10 years b tactical middle manager 6 24 month not as far as top c operational rst level managers a week month but certainly less than a year 9 1st thing do when plan process is have a vision statement long term of what we wanna become what we wanna be when we grow up kind of statement very concise understandable CEO should be able to ask everyone and everyone should know it 10 Mission statement gives more detail to the vision statement its going to have actions longer than vision more detail 11 Know the time frames that each planning covers 12 SMART goals 13 S speci c exactly what accomplish 14 M measure 15 A attainable 16 R results oriented 17 T target date attached 18 If a goal is too easy everyone do it and done no accomplish to hard people will view as unattainable performance stops has to be challenging yet attainable nd happy medium 19 Standing plan going to occur frequently every time that activity a The re emergency plan where same action is taken with the re every time 20 Single use plan created for a particular project 21 Management by Objective MBO 4 steps a 1 jointly set objectives with employees they have sense of ownership to accomplish it b 2 develop action plan c 3 periodically review performance d 4 give performance appraisal and rewards if any end give em formal proposal and rating 22 OBJECTIVES Top management must be committed must cascade down throughout organizations must be applied to entire organization 23 The Planning Control Cycle a Make plan b Execute plan c Control direction actual results versus plan results d Take corrective actions B C D II CH 6 HOW TO BUILD STRATEGY 1 Strategic Positioning want to position self instead of attacking one another everyone goal is to position so not direct competitors this leads to sustainability everyone in their own niche 2 Figure 6 1 Process 1 Vision 2 Mission 3 Grand Strategy w Environmental scanning 4 Implement 5 Control 6 feedback look looking at possibly revising any of actions based on feedback 7 Remember Mnemonic from Earlier Visibly Mr Gronk s In Control 3 Grand strategy couple basic decisions gather lots of DATA 4 1st decision want to make with grand strategy a Grow Growth Strategy 1 Involves expanding 2 Example expand into new products services OR increase promotion b Flat same market share same pro t objective stability 1 Example no change strategy noticed that maybe too fast growth leads to problems with orders c Shrink retract defensive 1 Example reduce costs declare bankruptcy 5 Then based on the grand strategy make plans and actions based on if you want to grow stabilize or shrink 6 7 Competitive Intelligence gathering as much information regarding your competitors as you possible can from all sources 1 where good where weak where their niche 8 Next do some Environmental Scanning 9 SWOT analysis Strength Weakness Opportunity Threat 10 SW are of the internal environment 11 OT external environment w in industry economy political arena 12 13 Forecasting Predicting the Future PROJECT FORWARD by using what information you have gathered you can make educated inferences 14 Trend analysis Based on past events and scenarios that you have faced as a manager CEO decide where this might apply and carry it out into the future 1 Example maybe you notice that sales of you palm pilot are decreasing rapidly the past few quarters but your phone sales have tripled maybe trend analysis would say we should focus on smart phones 15 Contingency planning creating other scenarios to the plans that come from the trend analysis like having a plan B plan C and maybe even plan D 1 Example based on the last example if we were assuming that smart phones were the direction we should go maybe have a back up plan to launch or further do some research and development on tablets or touch screens just in case the smart phone thing doesnt work out 16 17 Porters 5 forces 18 What do they tell you a When you are READY TO MOVE TO INDUSTRY how safe is it 19 20 1 The threat new entrants barriers of entry 1 How easy is it for someone to get into your industry Either really easy like a lemonade stand doesnt take much maybe some lemonade powder and water and a table but pro ts arent very high maybe 25cents a cup or can be really hard to get into industry would be like the car industry not very easy to not only make a car that is appealing but meets all the safety and green regulations of the govt or else everyone would be doing it pro ts usually higher 21 2 bargain power of buyers 1 Selling to just one person they can refuse your price and you cant do much other than comply and make LESS money because they are your only customer Vice versa you have lots of buyers customers you can say have a nice day and keep your price the same 22 3 bargain power of supply 1 Same concept as power of buyers but if you get your materials from one manufacture you are at the mercy of their prices if you have a bunch you can say no thanks ill go with manufacture B 23 4 threat of substitutes prod or service 1 Example if you are in the palm pilot business and the iPhone 5 gets released watch your sales go to 0 24 5 rivalry among comp 1 If nots of rivalry then everyone is going to cut costs to get the customer therefore everyone but the customer looses because all the competitors are making less 25 Next 26 4 Competitive Strategy Choice 27 Cost leadership broad market low cost 28 Differentiation broad
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