1. Planning, Strategy, and Competitive Advantage
Chapter 6
Planning, Strategy, and Competitive Advantage

2. Learning Objectives
Identify the three main steps of the planning process and explain the relationship between planning and strategy
Describe the different levels and types of planning and how they lead to competitive advantage

3. Planning and Strategy Planning Strategy
Identifying and selecting appropriate goals and courses of action for an organization
Strategy
A cluster of decisions about what goals to pursue, what goals to pursue, what actions to take, and how to use resources to achieve goals

4. Question? What is a broad declaration of an organization’s purpose ?
Company Bill of Rights
Mission Statement
Business Plan
Executive Summary

5. Planning and Strategy Mission Statement
A broad declaration of an organization’s purpose that identifies the organization’s products and customers and distinguishes the organization from its competitors

6. Three Steps in Planning
Figure 6.1

7. Why Planning is Important
Planning is necessary to give the organization a sense of direction and purpose
Planning is a useful way of getting managers to participate in decision making about the appropriate goals and strategies for an organization

8. Why Planning is Important
A plan helps coordinate managers of the different functions and divisions of an organization to ensure that they all pull in the same direction and work to achieve its desired future state
A plan can be used as a device for controlling managers within an organization

9. Levels of Planning at General Electric
Figure 6.2

10. Levels and Types of Planning
Corporate-Level Plan
Top management’s decisions pertaining to the organization’s mission, overall strategy, and structure.
Provides a framework for all other planning.
Corporate-Level Strategy
A plan that indicates in which industries and national markets an organization intends to compete.

11. Levels and Types of Planning
Business-Level Plan
Divisional managers’ decisions pertaining to divisions long-term goals overall strategy, and structure
Business-Level Strategy
A plan that indicates how a division intends to compete against its rivals in an industry

12. Levels and Types of Planning
Functional-Level Plan
Functional managers’ decisions pertaining to the goals that they propose to pursue to help the division attain its business-level goals
Functional Strategy
A plan that indicates how functional managers intend to increase the value of the organization’s goods and services

13. Levels and Types of Planning
Figure 6.3

14. Time Horizons of Plans Time Horizon The intended duration of a plan.
Long-term plans are usually 5 years or more.
Intermediate-term plans are 1 to 5 years.
Short-term plans are less than 1 year.

15. Discussion Question Which type of plan is the most useful?
Standing Plan
Single-Use Plan
Functional Plan
Strategic Plan

16. Types of Plans Standing Plans Single-Use Plans
Use in programmed decision situations
Single-Use Plans
Developed for a one-time, non-programmed issue

17. Standing Plans Policies Rules Standard operating procedures (SOP)
general guides to action.
Rules
formal written specific guides to action.
Standard operating procedures (SOP)
specify an exact series of actions to follow.

18. Types of Plans Programs Project
integrated plans achieving specific goals.
Project
specific action plans to complete programs.