1. Planning for Change Corporate Plans
A2 Business
Planning for Change
Corporate Plans

2. Learning Objectives Explain and assess 1. Corporate Planning
Purpose
Influences – Internal/ External
SWOT / PESTLE
2. Contingency Planning
A2 text Chp 27 p. 444

3. Purposes of Corporate Planning
Clarify direction
Ensure efficient use of resources
Provide a way of measuring progress
Support effective decision-making
Co-ordinate activities
Allocate responsibility
Motivate & guide people
A2 text Chp 27 p. 444 3

4. The planning cycle
SWOT
A2 text Chp 27 p. 444 4

5. Activity Explain the stages of the Planning Cycle Sainsbury’s p. 448
A2 text Chp 27 p. 444

6. Influences on Corporate Planning
Internal and External influences assessed via SWOT.
Auditing
Internal audit looks at current resources
External audit looks at possibilities for development (PESTLE)
A2 text Chp 27 p. 444

7. Kings SWOT Brand reputation Inefficient site
Social or lifestyle change
Economic downturn
A2 text Chp 27 p. 444

8. Some possible strengths
Market share
Economies of scale
High quality
Leadership & management skills
Financial resources
Research and development capabilities
Technological leadership
Brand reputation
Protected IP
Distribution network
Employee skills
High productivity
Flexibility of production
A2 text Chp 27 p. 444 8

9. Some possible weaknesses
Low market share
Inefficient plant
Outdated technology
Poor quality
Lack of innovation
A weak brand name
High costs
Cash flow problems
Undifferentiated product
Inadequate distribution
Quality problems
Low productivity
Skills gap
De-motivated staff
A2 text Chp 27 p. 444 9

10. Possible opportunities
Technological innovation
New demand
Market growth
Demographic change
Social or lifestyle change
Government spending programmes
Higher economic growth
Trade liberalisation
EU enlargement
Diversification opportunity
Deregulation of the market
A2 text Chp 27 p. 444 10

11. Some possible threats New market entrants
Change in customer tastes or needs
Demographic change
Consolidation among buyers
New regulations
Economic downturn
Rise of low cost production abroad
Higher input prices
New substitute products
Competitive price pressure
A2 text Chp 27 p. 444 11

12. Convert into strengths
Weakness
E.g. Outdated technology = Takeover competent competitor
Skills gap
Overdependence on a single product
Poor quality
High fixed costs
A2 text Chp 27 p. 444 12

13. Weaknesses into strengths
Possible Response
Skills gap
Invest in training & more effective recruitment
Overdependence on a single product
Diversify the product portfolio by entering new markets
Poor quality
Invest in quality assurance
High fixed costs
Examine potential for outsourcing or offshoring
A2 text Chp 27 p. 444 13

14. How can a firm manage risk? Snow disruption
A2 text Chp 27 p. 444

15. Different ways to deal with risk
Ignore it (wait and see)
Reduce probability of risk
Reduce or limit the consequences
Share or deflect the risk (e.g. by insurance)
Make contingency plans - prepare for it
Adapt in order to maintain performance
Treat it as an opportunity- particularly if it affects other competitors
A2 text Chp 27 p. 444 15

16. Risk management Identifying what and how things can and might go wrong
Understanding the potential effects if things go wrong
Devising plans to cope with the threats
Putting in place strategies to deal with the risks either before or after their occurrence
A2 text Chp 27 p. 444 16

17. What’s difference between contingency planning and crisis management, if any?
A2 text Chp 27 p. 444

18. Contingency Planning
Minimise the impact of foreseeable yet non-critical events. Usually involves gathering detailed information on predictable situations and using computer models to ask ‘what if’.
Crisis Management is damage limitation involving Public Relations
A2 text Chp 27 p. 444

19. Contingency planning
Businesses prepare contingency plans because things do go wrong from time to time
Contingency planning involves:
Preparing for predictable and quantifiable crises
Preparing for unexpected and unwelcome events
The aim is to minimise the impact of a foreseeable event and to plan for how the business will resume normal operations after the crisis
A2 text Chp 27 p. 444 19

20. Articles – Draw up a contingency plan
Mad cow disease on farm industry
Strikes
Recession
Kings swine flu outbreak
A2 text Chp 27 p. 444

21. Drawing up a contingency plan
Identify possible contingencies
All the possible adverse and crisis scenarios
Specify the likely consequences
Assess of the degree of risk to each eventuality
Determine risk strategy:
To prevent a crisis
to deal with a crisis should one occur
Prepare plan and identify responsibilities
Test the plan (crisis simulation)
A2 text Chp 27 p. 444 21

22. The “what if” question Scenario analysis
This involves constructing multiple but equally plausible views of the future
The scenario consists of a “story” from which managers can plan
Sensitivity analysis
Involves testing the effect of a plan on alternative values of key variables
e.g. the effect of a 25% loss of capacity
A2 text Chp 27 p. 444 22

23. Learning Objectives Explain and assess 1. Corporate Planning
Purpose
Influences – Internal/ External
SWOT / PESTLE
2. Contingency Planning
A2 text Chp 27 p. 444