Plan Go through research (so take it out) Set homework New topic Laptops – research task Introduce new grid Set additional research BUSS4.8 Planning for Change

Research examples Internal and External Growth and Retrenchment: External Growth: Clintons cards – Birthdays. Irn Bru – Fruitshoot Google – Motorola BMW – Rover Audi – Ducati British Airways – Iberia News Corporation – BskyB. Kellogs – Pringles Tata – Jaguar Land Rover Morrisions – Safeway Nike – Umbro Booker - Makro Unilever – Ben and Jerrys JD Sports – Blacks Lesuire Coop – Somerfield Kraft – Cadburys Liberty Global – Virgin Media Facebook – Instagram Internal Growth: H&M Primark Dominos Retrenchment: Nokia Thomas Cook Carrefour TESCO – Fresh and Easy. Blackberry

Practise Comparing and Contrasting examples of retrenchment strategies Failure Success

Homework Finish Organic 1 bad and good and Takeovers/ merger 1 bad and good + Killer paragraph. Are stakeholders are always worse off following a merger or takeover? (40 marks) Intro – Plan (Triangle) – Use frame - refer to hooks through out answer Tips – don’t retell the story – refer to hooks 3 times in answer. Add unlike, it depends and overall….

Managing Change Planning for Change Revitalising general Motors is like teaching an elephant to tap dance. You find the sensitive spot and start poking. H Ross Perot Changing the direction of a large company is like trying to turn an aircraft carrier. It takes a mile before anything happens. And if it was a wrong turn, getting back on course takes even longer. Al Ries BUSS4.8 Planning for Change

In this topic you will learn about: Purposes of corporate plans ◦ Including contingency plans Assessing internal and external influences on corporate plans Assessing the value of corporate plans BUSS4.8 Planning for Change

Corporate Plans BUSS4.8 Planning for Change Corporate Plan A detailed, medium to long term plan outlining the actions a business will take to achieve its corporate objectives Corporate Aims and Objectives Corporate Strategies Functional Objectives and Strategies Revision Opportunity: Draw a grid as shown opposite on to A3 paper. Write down everything you can remember from BUSS3 under each heading. Share your notes to fill in as much of the grid as possible. HR Finance Operations Mgt. Marketing

Purpose of Corporate Plans Clear sense of direction ◦ Directors and all staff if communicated effectively ◦ Encourages accountability Prior consideration to key strengths and weaknesses Identifies and gives consideration to range of strategic options Encourages progress to be tracked/ reviewed BUSS4.8 Planning for Change Preparing a corporate plan Detailed corporate plan Monitoring of corporate plan Review Discuss the benefits of each stage

Influences on Corporate Plans Internal ◦ Resources  Financial  Workforce  Operational capacity ◦ Culture ◦ Leadership ◦ Managerial skills/ expertise External ◦ Competitor actions ◦ Economic environment ◦ Political and Legal environment ◦ Social environment ◦ Technological environment BUSS4.8 Planning for Change The whole of BUSS4 looks at the external environment and managing change all aspects of which will influence corporate plans

Value of Corporate Plans Value Shows strategic thinking and planning ◦ Shared with  Employees  Potential investors  Other stakeholders “Joined up” thinking and planning Common sense of direction Limitations ◦ Responsiveness to change ◦ Must be flexible ◦ Can not predict future ◦ Can not avoid the unexpected! BUSS4.8 Planning for Change

Contingency Planning What is contingency planning? The process by which organisations try to prepare for unexpected and potentially disastrous events ◦ 1.Identify potential disasters Oil tanker sinking ◦ 2. Assess likelihood of it occurring ◦ 3. Measure impact – Bad PR, job losses ◦ 4. Plan to recover What is crisis management? ◦ The manner in which an organisation responds to an unexpected and potentially disastrous event BUSS4.8 Planning for Change A CRISIS RARELY GOES AS PLANNED! What steps can a restaurant take to avoid a crisis? What are the costs to a business? Can a crisis be avoided? How important is it to limit any damage?

The process of developing a contingency plan Acceptance Catalogue Possibilities Crisis Plan Testing Review Preventative Measures What contingency plans exist in your school or college? How do you test and review these? Business Impact Analysis may form an important part of this (see next slide) BUSS4.8 Planning for Change

Business Impact Analysis Potential Threats ◦ What could go wrong? Probability ◦ How likely is it to happen? Estimated effect ◦ What will the cost to the business be?  Financial and reputation Speed ◦ How quickly will it impact on the business functions? ◦ How quickly can the business respond? Mission Critical Functions ◦ Will it stop the business performing its main function? BUSS4.8 Planning for Change

Contingency Plans Value Sense of security Limits damage Speeds up recovery process Preventative measures can be part of CSR Limitations Costly and time consuming ( needs dry runs and extra training) ◦ Including opportunity cost Needs reviewing Lack of predictability BUSS4.8 Planning for Change Fifa has a contingency plan in case South Africa is not ready for the World Cup. Should there be a Contingency plan in case London is not ready for the 2012 Olympics?

Contingency Plan Cadbury’s testing out of date Cadbury’s withdraws products made in China Cadbury’s is fined In each case: Identify the cause of each event Identify the potential threat What actions could have been taken to prevent these events? Rank each event on a scale of 1 – 10 in terms of seriousness to the future success of Cadbury’s. Justify your answer BUSS4.8 Planning for Change

Task One: Corporate Planning Corporate Planning You have been given a copy of the corporate plan for Thomas Cook outlined by Harriet Green since she has taken over at the company. Using the information and the sheets you have been given, complete the following tasks: What are the key objectives she wants to achieve at Thomas Cook? (who / what) What strategies has she put in place to help them achieve the objectives she has set? (what / how) What are the main influences on Thomas Cook corporate plan? You can produce a SWOT analysis to help you identify these. Why was a new corporate plan needed at Thomas cook? What are the main benefits for Thomas Cook of introducing a new corporate plan? (which shows) As part of your research complete the same task for 2 other businesses. (Most businesses that have been struggling / undergone a recent change in leadership will often clearly outline their new corporate plans e.g. Nokia, Royal Mail, Sony.)

Task Two: Contingency Planning Contingency Planning As part of your research you need examples of: Two businesses that have had contingency plans in place and the consequences (benefits) to them of having them when they were needed. Two businesses that did not contingency plan and the consequences for them. Read the following articles and complete the ‘who / what / why / which shows that’ grid for all the articles and you will have the four examples that you need! train-you-could-imagine Euro star did not contingency plan! train-you-could-imagine RBS did not contingency plan! Cadburys had a contingency plan! A government that contingency plans! Contingency planning at Cannon!

Activity – Food contamination scare It is important at times of a crisis that communication is handled carefully and that everyone within the organisation understand their own roles and responsibilities. You work for a large food manufacturer who as part of the contingency planning process has identified the potential of contaminated food leaving the factory as a major threat. In teams decide on the major roles and responsibilities of each of the company’s functional areas if this potential threat was to happen: ◦ Marketing ◦ Finance ◦ Human Resources ◦ Operations Management Write a short press release explaining to the public what actions are being taken upon discovery of a case of food contamination BUSS4.8 Planning for Change

Essay US Entrepreneur, Warren Buffet, once said “Preparation is everything. Noah did not start building the ark when it was raining.” With reference to businesses you have studied, to what extent do you agree that planning and preparation are key to the success of business today. BUSS4.8 Planning for Change