10: Business planning and functional strategies Flashcards
What are short term plans?
HR plan
Operations plan
Marketing plan
R&D plan
Why plan?
- Co-ordinate the activities of different divisions/functions towards strategic goals
- Put the case forward to secure finance
- Gain board approval
- Develop annual budget
Suggested outline for a business plan
Cover sheet
Statement of purpose - brief explanation as to why plan has been prepared
The business - info to understand nature of business e.g. description, marketing, competition, operations
Financial data - Detailed info about financing (loan applications, capital equipment, SOFP) and projected forecast for next 3 years.
Supporting document - Info that establishes the credibility of key parties in the business and strengthens the case for a business plan application. e.g. tax returns, licenses, personal finance statements
How do the finance department contribute to the production of the strategic plan?
- Ensure financial resources are available or raised in sufficient time
- Turns strategy/functional strategies into overall financial budget
- Help with establishment of priorities
- Assist in business modelling and scenario planning
What is the role of finance as a business partner?
Finance professionals can:
- Provide other business units, departments and projects with real-time support
- Assist in analysis of financial/non-financial performance data
- Help devise stragies to improve performance
- Review and challenge proposals before being read by senior management
- Collab in prep of departmental budgets and forecasts
What should HR do?
HR should:
- Serve interests of management rather than employees
- Provide a strategic approach to meeting staffing issues
- Enable HR development to add value to products and services
- Link the business, its mission and goals to HR strategy
What is the HR strategy
The gap between where we are now (using resource audits, staff appraisals, historical records and forecasts) and where we need to be (using functional strategy plans, tech developments, new skills needed etc)
The gap includes: Recruitment, training, transfer/relocations, redundancy, morale, productivity.
What is succession planning?
Features?
Continuity of leadership e.g. when one manager leaves, someone is ready to take their place
Features:
- Increased development of existing managers
- Shared responsibility with senior managers, not just HR responsibility
- Objective assessment of current managerial talent
- Development of leadership teams
What is the HR cycle?
-Seletion: Hiring people with the qualities/skills required
- Appraisal: comparison of performance against targets
- Training and development: ensure skills remain up-to-date, relevant and comparable with the best in the industry
- Reward system: motivate and ensure valued staff are retained
- Performance: depends upon each of the four components and how they are co-ordinated
Explain product and process research
- Research may be intended to create or improve products or processes
- New product developments can be a major source of competitive advantage
but costly
Processes include:
- Operational
- Productivity improvements
- Quality management
- Planning and efficiency
How does R&D interact with porter’s generic strategies?
- product innovation could be a source of differentiation.
- Process innovation could further enable differentiation or deliver cost leadership.
How does R&D interact with porters value chain
- R&D will be included within technology development and could result in improved differentiation or lower cost of production
How does R&D interact with ansoff’s matrix
Ansoff’s matrix: R&D is found in all four quadrants:
– Market Penetration through product refinement, development of loyalty schemes
processes, improvement to customer service and so on, thereby increasing sales.
– Market Development through refinement and adaptation of product to different
markets.
– Product Development and Diversification through creation of new products, either for
existing customers or entirely new markets
How does R&D interact with Industry and product life cycles
Industry and product life cycles: introduction of new products, improvement of products
during growth stage to stay competitive, refinement of production processes to maximise
return during maturity phase and replacement of products approaching obsolescence.
What is innovation? What factors create a culture of innovation?
Generation of new ideas of how to do business.
Factors:
- Leadership: senior management encourage the exploration of new ideas
- Culture: Employees are encouraged to try new ideas out
- People: Team-based approaches encourage participation
- Structure: Flexibile organisational structures facilitate new ways of working and building relationships
- Communication: management encourage free sharing of ideas.
