13. Business Planning and Functional strategies Flashcards
What is the outline of a business plan?
(a) Cover sheet
(b) Statement of purpose
(c) Table of contents
(1) The business • Description of business • Marketing • Competition • Operating procedures • Personnel • Business insurance • Financial data
(2) Financial data • Loan applications • Capital equipment and supply list • Statement of financial position • Break-even analysis • Pro-forma income projections (forecast income statements) Three-year summary – Detail by month, first year – Detail by quarters, second and third years – Assumptions upon which projections were based • Pro-forma cash flow ◦ Follow guidelines for letter (e)
(3) Supporting documents
◦ Tax returns of the business and owners for last three years
◦ Personal financial statement (all banks have these forms)
◦ In the case of a franchised business, a copy of franchise contract and all supporting documents provided by the franchisor
◦ Copy of proposed lease or purchase agreement for building space
◦ Copy of licences and other legal documents
◦ Copy of resumes of all owners and senior managers
◦ Copies of letters of intent from suppliers, etc
What is the role of the finance function?
(a) Finance is a resource, which can be deployed so that objectives are met.
(b) A firm’s objectives are often expressed in financial or semi-financial terms.
(c) Financial controls are often used to plan and control the implementation of strategies.
What are the strategic contributions of the finance function?
- Ensuring that resources of finance are available.
- Integrating the strategy into budgets for revenues, operating costs and capital expenditure over a period.
- Establishing the necessary performance measures, in line with other departments for monitoring strategic objectives.
- Establishing priorities
- Assisting in the modelling process.
What can finance professionals do as Business Partners?
- Provide ‘real time’ support in the form of detailed data and information
- Assist departmental managers in analysing both financial and non-financial performance data
- Help with the preparation of departmental business cases for new projects
- Support departmental heads in understanding investment appraisals
- Collaborate with departmental managers in the preparation of departmental budgets
- Assist departmental managers in designing departmental information systems
What are the sections of a marketing plan?
- The executive summary
- Situation analysis
- Objectives and goals
- Marketing strategy
- Strategic marketing plan
- Tactical marketing plan
- Action plan
- Budgets
- Controls
What is the process of corporate planning in relationship to marketing?
- Set objectives
- Internal appraisal (strengths and weaknesses)
- External appraisal (opportunities and threats)
- Gaps
- Strategy
- Implementation
- Control
Describe the marketing control process.
- Development of objectives and strategies
- Establishment of standards
- Evaluation of performance
- Corrective action
What are the requirements that a proper marketing audit should satisfy?
- It should take a comprehensive look at every product, market, distribution channel and ingredient in the marketing mix.
- It should not be restricted to areas of apparent ineffectiveness such as an unprofitable product, a troublesome distribution channel, or low efficiency on direct selling.
- It should be carried out according to a set of predetermined, specified procedures.
- It should be conducted regularly.
Define Human resource management.
A strategic and coherent approach to the management of an organisation’s most valued assets: the people working there who individually and collectively contribute to the achievement of its objectives for sustainable competitive advantage
What are the goals of HRM?
- Serve the interests of management, as opposed to employees
- Suggest a strategic approach to personnel issues
- Link business mission to HR strategies
- Enable human resource development to add value to products and services
- Gain employees’ commitment to the organisation’s values and goals
What are the parts of the HR plan?
- Recruitment plan
- Training plan
- Redevelopment plan
- Productivity plan
- Redundancy plan
- Retention plan
What are the benefits of succession planning?
- The development of managers at all levels is likely to be improved if it takes place within the context of a succession plan.
- Continuity of leadership is more likely, with fewer dislocating changes of approach and policy.
- Assessment of managerial talent is improved by the establishment of relevant criteria.
What are the features of successful succession planning?
- The plan should focus on future requirements, particularly in terms of strategy and culture.
- The plan should be driven by top management.
- Management development is as important as assessment and selection.
- Assessment should be objective and preferably involve more than one assessor for each manager assessed.
- Succession planning will work best if it aims to identify and develop a leadership team rather than merely to establish a queue for top positions.
What are the benefits of staff appraisal?
- A forum for agreeing objectives for the coming year that ensure the individual pursues goals that are congruent with the business strategy
- An opportunity to outline or respond to difficulties affecting the individual’s performance
- Provision of feedback will motivate and develop the individual
- Identifies personal development needs of the individual, eg, for future roles
- Identifies candidates for succession and development
What are the aspects of process research?
- Processes are crucial in service industries (eg, fast food), as part of the services sold.
- Productivity: efficient processes save money and time.
- Planning: if you know how long certain stages in a project are likely to take, you can plan the most efficient sequence.
- Quality management for enhanced quality.
How can a creative environment be maintained?
- Leadership
- Culture
- People
- Structure
- Communication
Define operations management.
Is concerned with the design, implementation and control of the processes in an organisation that transform inputs (materials, labour, other resources, information and customers) into output products and services.
What concepts will operational planning include?
- Setting operational objectives that are consistent with the overall business strategy
- Translating business strategy or marketing strategy into operations strategy
- Assessing the relative importance of different competitive factors.
- Assessing current operational performance by comparison with the performance of competitors.
- Formulating strategy could be based on other types of gap analysis
- Emphasising the iterative process of strategy selection:
What are six items that should be incorporated into an organisation’s operations strategy?
- Capability required
- Range and location of operations
- Investment in technology
- Strategic buyer-supplier relationships
- New products/services
- Structure of operations
What are the four Vs of operations?
- Volume
- Variety
- Variation in demand
- Visibility
What are the types of capacity planning that may be used?
- Level capacity plan is a plan to maintain activity at a constant level over the planning period
- Chase demand plan aims to match capacity as closely as possible to the forecast fluctuations in demand.
- Demand management planning: reduce peak demand by switching it to the off-peak periods
- Mixed plans
What is capacity control?
Capacity control involves reacting to actual demand and influences on actual capacity as they arise.
What IT/IS applications are used in manufacturing operations?
- Materials requirements planning (MRP I): converts estimates of demand into a materials requirements schedule.
- Manufacturing resource planning (MRP II): a computerised system for planning and monitoring all the resources of a manufacturing company
- Enterprise resource planning (ERP) software: includes a number of integrated modules designed to support all of the key activities of an enterprise.
Define Just-in-time manufacturing?
An approach to planning and control based on the idea that goods or services should be produced only when they are ordered or needed. Also called lean manufacturing.
