Introduction to business planning Practical tools, tips, and techniques for ongoing business planning Endorsed by University of Greenwich Business School

Yvonne Tuckley Learning & Development Manager

Why are we doing this session?

Workshop focus Some business managers believe that the creation of a range of marketable products and services is the key to achieving successful exploitation of a chosen market. Of equal importance however, is the approach taken to running the business itself, including the requirement for ongoing business planning As this workshop will demonstrate, business planning is not a one-off activity; it should be a constant feature underpinning everything that an organization does – successful businesses need to plan

Learning objectives To understand the commercial criticality of ongoing business planning activity To explore a range of planning tools and techniques which will assist in helping you to achieve your planning objectives To appreciate the importance of external and internal business analysis

The importance of business planning

To plan or not to plan? GROWTH BUSINESSES n Use a business plan as a ‘living’ document n Manage finances prudently n Understand business risk n View employees as an asset not a cost n Invest in workforce development n Understand competition PROBLEM BUSINESSES n Do not maintain a business plan n Display poor financial management n Fail to plan ahead in a meaningful way n Are poorly organised and managed n conduct inadequate market and competitor research

Dictionary definition of Business Planning Group exercise

Dictionary definition of Competitive Advantage Group exercise

Where do I start?

Where are you now? Internal analysis of the business External analysis of the industry Where do you want to go? Generating options for growth Evaluating options for growth How do we make it happen? Planning, organising and managing

Business planning and analysis: tools and techniques

EXTERNAL ANALYSIS

PESTEL analysis Johnson Scholes and Whittington, 2006 Exhibit 2.2

PESTEL analysis Johnson Scholes and Whittington, 2006 Exhibit 2.2

Identify the elements you might consider for each element of PESTEL Group exercise

Bargaining power of suppliers Threat of development of substitute products Rivalry among competing firms Bargaining power of buyers Threat of entry of new competitors Five forces analysis

INTERNAL ANALYSIS

Porter's value chain Firm Infrastructure Human Resource Management Technological Development Procurement Inbound Logistics Operations Outbound Logistics Marketing & Sales Service MARGIN Supporting Activities Primary Activities Relationship with Suppliers Relationship with Buyers Elapsed Time - Value added time cost

Threshold Resources Threshold Competences Distinctive Resources Distinctive Competences Strategic Capability

Resources THRESHOLD RESOURCES Those resources that an organisation needs to have in order to meet the minimum requirements of its customers For example, an airline needs more than a fleet of planes, it will also need all the supporting structure, including landing and fly-over rights DISTINCTIVE RESOURCES “…those resources that critically underpin competitive advantage and that others cannot easily imitate or obtain.” Johnson et al 2008:97 For example, a strong brand name or reputation

Resource types PHYSICAL Buildings, equipment, machinery (condition, location, age) HUMAN People involved within the firm (age, adaptability, flexibility, skill levels) FINANCIAL Cash, ability to raise funds, credit rating, management of working capital (stock, debtors, creditors) INTANGIBLE Reputation, brand, trade marks, employee know-how, change management and innovation abilities

Competences THRESHOLD COMPETENCES Those minimum competences an organisation requires in order to ensure that resources are deployed efficiently enough to meet minimum customer requirements For example, an airline will need to ensure its operations conform to minimum safety standards DISTINCTIVE (CORE) COMPETENCES “…the linked set of skills, activities and resources that, together, deliver customer value, differentiate a business from its competitors and, potentially, can be extended or developed.” Hamel and Prahalad, in Johnson et al 2011:89 For example, a high level of marketing expertise

24 Valuable?Rare? Costly to Imitate ? Exploitable by the Organization? Competitive implications No-- Competitive Disadvantage YesNo-Competitive Parity Yes No Temporary competitive advantage Yes Sustained competitive advantage

SWOT

Strengths What are your Unique Selling Points (USPs)? What are your Very Strong Points (VSPs)? What do you do better than your competitors? Why do people buy from you?Weaknesses In what areas do you perform poorly? What are the main internal barriers to your continued growth? Are you losing sales? If so, why? What do your competitors do better than you? Opportunities Can you capitalise on new trends within the sector? What PESTEL factors present opportunities? Do you have skills and/or levels of expertise which are transferable? Can you use your strengths to take advantage of opportunities?Threats What external challenges do you face? What PESTEL factors present challenges? What are the main threats from competitors? Does technological change pose problems? Are there issues relating to market demand ?

Where are you now? Internal analysis of the business External analysis of the industry Where do you want to go? Generating options for growth Evaluating options for growth How do we make it happen? Planning, organising and managing

Groove Thinking

Thinking ActionsResults “If you always do what you’ve always done, you’ll always get what you’ve always got!” Why change the way we think?

Techniques to generate ideas

Break THE Rules!

Wouldn’t it be good if…

Individual exercise

Learning objectives To understand the commercial criticality of ongoing business planning activity To explore a range of planning tools and techniques which will assist in helping you to achieve your planning objectives To appreciate the importance of external and internal business analysis

Introduction to business planning Practical tools, tips, and techniques for ongoing business planning Endorsed by University of Greenwich Business School