Planning Planning is the establishment of objectives, evaluation and selection of policies, strategies tactics and action required to achieve them. A Forecast is a prediction about a future course of events.

Planning is an essential aspect of good management. Plans conform to a common format. Review of the current situation – (Situational audit) A Statement of aims, objectives and targets to be achieved. A statement of strategies, and tactics to be undertaken to achieve objectives Procedures for monitoring progress and where necessary taking corrective action.

Planning spectrum Aspects - Strategic, tactical and operational planning Time horizon Purpose Impact Focus Degree of certainty Information requirements Level of detail Long term Ends orientated Irreversible Whole organisation Low Poorly defined Broad issues only Short term Means orientated Reversible Parts of the organisation Greater Well defined Very detailed

Situational Audit It is necessary to analyse the current situation before deciding on a course of action. The analysis involves an investigation of the external environment, competitors and internal strengths and weaknesses. (PEST)

PEST Analysis PEST analysis is the name given to an analysis of the external environment. PEST stands for Political – legal, economic, sociocultural and technological environment

Political-legal Government stability, taxation, government spending, industrial relations policy, relations with other countries, employment and consumer law, competition policy, environmental protection and foreign trade regulations. Economic Inflation, unemployment, income, interest rates, cyclical fluctuations, economic growth, exchange rates, price of inputs. Sociocultural Demographic trends, income distribution, levels of education, lifestyles, attitudes to work and leisure, mobility of population. Technological New discoveries, technological development, technology transfer, rates of obsolescence.

SWOT Analysis A SWOT analysis looks at the strengths, weaknesses, opportunities and threats to a firm. The Strengths and weaknesses are internal to the firm. The opportunities and threats are external to the firm.

SWOT Matrix

SWOT Checklist Internal: Strengths and weaknesses People - skills, training, attitudes; Organisation – structure and relationship; Products – quality, lifecycle, cost; Production – capacity, quality; Finance – cash flow, balance sheet, profit; Credentials – reputation, customer perception. External: Opportunities and threats Markets – trends; Technology – income, employment, exchange rates, interest rates; Society – demography, social attitudes; Law – pollution, employment protection, consumer law, product liability; Natural resources - availability, cost.