Chapter 1 Flashcards
Planning
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 an action plan?
An action plan is typically created fora one-year time frame, and is aimed at the achievement of specific goals. They must focus on how the objectives established in the strategic plan are to be achieved.
Define a top-down approach to planning, and the advantages and disadvantages to this approach.
In a top-down approach, management is responsible for developing the mission, strategies, objectives, and goals. Advantages are that management retains control. Disadvantages are lack of employee buy-in.
Define a bottom-up approach to planning, and the advantages and disadvantages to this approach.
In a bottom-up approach, management is still responsible for developing the mission and strategies, but individual business units are responsible for developing objectives and goals. Advantages are employee buy-in. Disadvantages are management feels they do not have control, and any input by them may be resisted by employees.
What are the 7 Components of a Strategic Plan?
Scanning the External Environmental Analyzing the Internal Environmental S.W.O.T. Analysis Defining a Corporate Focus Developing Strategies Developing Objectives Setting Goals
What is the purpose of scanning the external environment?
Assess threats and opportunities surrounding the brokerage.
Explain the difference, using examples, of the near environment and the distant environment.
Near: Things the brokerage has some control over
(customers & prospects, market segments, competitors.)
Distant: Things the brokerage has no control over (economy, demographics, technology.)
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.
What is the purpose of an internal environmental analysis?
Determine strengths and weaknesses by assessing the use of human resources, financial resources, and other resources.
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?
