Chapter 1 Flashcards
4 Characteristics of a plan
Simplicity.
- must be simple.
Practicality.
- realistic.
Severability.
- aggregate of parts.
Flexibility.
- must allow for mid term changes.
Near environment
Factors over which brokerage may have an influence.
Main tool used is profiling.
client profiling.
market profiling.
competitor profiling.
Advantages/Disadvantages to top-down approach
Management feels firmly in control and in charge.
- Employees had no part in developing. it’s “managements” plan.
2 Disadvantages of bottom-up approach
Management may feel they lack control.
2. Business units fully into “their” plan, not accepting of changes made by management.
Distant environment
Factors critical to long term survival.
Brokerage has no control or influence.
-economy
-social/demographic forces
-technological change
-government action
3 Keys to successful implementation
Controlling implementation.
- mobilize resources, get the right people to the right place.
Linking budgets to strategies, objectives, and goals.
Motivating for implementation.
- common problem is that employees are not focused on accomplishing same objectives.
Characteristics of action plan
Consists of specific tasks to support the strategic plan.
Apply to particular business unit.
One year timeline
Detailed
Focus on how strategic plan will be achieved.
Define Mission
Defines where brokerage is headed.
-What will we achieve?
Define Strategy
Long term (3-5 years) battle plan.
-Describes how brokerage intends to achieve mission.
Define Objective
Refines broad mission and strategies into concrete actions.
Analyzing the internal environment - What does the brokerage need to know?
What it does better than competitors.
What strengths aren’t being used effectively.
What it’s weaknesses are.
Financial strength.
How strong human resources are.
Defining a corporate focus
VVM
Vision
Value
Mission
What is the purpose of the strategic plan?
Asses the future.
Structure for dealing with risks/uncertainty.
Consider backup plans for responding to change.
Determine the purpose and direction of the brokerage.
Competitor profiling.
Gathering information such as size, financial condition, location, products, service, and public image.
Market profiling.
Identifying and analyzing factors in the market which may affect the brokerage.
Client profiling.
Gaining an understanding of the clients to better serve their needs.
2 major tools used to control implementation.
Implementation program.
- Progress report.
Components of a strategic plan
Scan external environment
Analyze internal environment
SWOT
Corporate focus
Develop strategies
Develop objectives
Setting goals
Define “Planning”
Planning is the process of establishing the results to be achieved and formulating ways to achieve them.
What is a strategic plan?
A strategic plan is a broad plan which applies to the brokerage as a whole. It typically spans over three-five years, and outlines how a brokerage intends to fulfill its mission.
What is the purpose of scanning the external environment?
Assess threats and opportunities surrounding the brokerage.
What are the three types of profiling?
Competitor Profiling: Location, financial stability, products offered, public image.
Market Profiling: Forecast marketplace factors, analyze the market and in which it and its competitors compete.
Client Profiling: Nature & characteristics of clients via database,market research, surveying and random sampling.
Explain the purpose of a S.W.O.T. analysis and what information is obtained by preparing it.
Match strengths and weaknesses to threats and opportunities to capitalize on opportunities and defend against threats. S×O: Greatest potential, S×T: Can deal with threat easily, no action, W×O: Future potential, W×T: Critical area, allocate resources.
Why is it important to define a corporate focus?
Committing carefully considered statements to writing increases the probability that they will be realized. Important for employees, shareholders, and clients alike.
What questions are answered in a vision statement?
What target are we aiming for? What does the future look like for our brokerage? What’s special about our future vision?
What questions are answered in a value statement?
What values have we used as the foundation for our business? Are all our values fixed and long-term? What words define our values?
What questions are answered in a mission statement?
What is the organization’s purpose? What is their long-term direction and point of reference for all employees of the brokerage?
What are strategies?
Long-term battle plan.
Describes how the brokerage intends to achieve its mission. Strategies should bridge the gap between the conceptual mission and the more detailed action plan, and are developed after appraisal of the S.W.O.T. analysis.
What are objectives?
Refine the strategies.
Outline concrete actions to support the strategies and overall mission. There may be multiple objectives for each strategy.
What are goals?
Specific details.
Goals are the final step in the strategic planning process. Goals express in specific terms what objectives express in general terms and strategies express conceptually.
Explain the five characteristics of goals.
Specific: Clearly state what is to be accomplished
Measurable: To determine if it was accomplished
Action-oriented: Clear in what is expected
Realistic: Not unattainable
Timely: Completion date or time frame
How do you implement the strategic plan?
Direct, control & mobilize human, financial, and other resources to support the plan.
> Implementation Program
Organize resources to translate plan into specific activities. Start & end dates should be identified.
> Progress Report
Monitor to identify items not on schedule and to allow for necessary corrections.
Explain the importance of linking budgets to strategies, objectives, and goals.
The brokerages budget should support the achievement of the plan, rather than strictly limiting expenditures. If one element of the plan is not supported by the budget, further elements of the plan may be incapable of being implemented.
How do you motivate for implementation?
The first step to ensuring employees are motivated are to ensure they are aware of the plans, objectives, and goals. Secondly, linking the objectives to individual performance expectations will motivate the employee.
