1. BUSINESS PLANNING PROCESS PRESENTATION FOR MEMBERS OF ICAI DUBAI CHAPTER 24 th October 2015

2. OBJECTIVES OF BUSINESS Profitability: sole motive of business; all other objectives are subservient to profit motive Survival: function of nature of ownership, nature of business competence of management, general and industry conditions, financial strength of the enterprise, etc. Stability: cautious and conservative objective Growth: increase in assets, manufacturing facilities, increase in sales volume Efficiency: doing things in best possible manner; utilizing resources in a most suitable combination to get highest productivity

3. BUSINESS PLANNING PROCESS

4. FRAMEWORK OF STRATEGIC MANAGEMENT Stage One: Beginning – starting point – Where are we now? – situational analysis in the environmental context – SWOT Analysis Stage Two: End – destination – Where we want to be? – vision and mission Stage Three: Means – How to get there? Stage Four: Evaluation – Which is the best way? – SWOT Analysis Stage Five: Control – How can we ensure arrival at the destination?

5. STRATEGIC PLAN Long Term Big Picture Environmental Scan Vision – What Mission – Why Core Values - How

6. COMPONENTS OF BUSINESS ENVIRONMENT External – factors outside the organisation which provides opportunities or poses threats Internal – factors within the organisation which impart strengths or cause weaknesses of a strategic nature

7. PESTLE ANALYSIS P – Political – political stability, ideologies, taxation policy, regulatory bodies, government policies, government term and change, thrust areas of political leaders E – Economic – situation, trends, market and trade cycles, specific industry cycles, end-user drivers, interest and exchange rates, inflation and unemployment, consumer spending S – Socio-cultural – lifestyle trends, demographics, attitudes and opinions, brand image, buying patterns, ethnic/religious factors, media views and perception T – Technological – replacement technology, maturity of technology, manufacturing maturity, innovation potential, technology access, licensing, patents, intellectual property rights L – Legal – business and corporate laws, employment law, competition law, health & safety law, international treaty and law, regional legislation E – Environmental – ecological/environmental issues, environmental hazards, environmental legislation, energy consumption, waste disposal

8. VISION Vision is the ultimate goal, dream and the guiding star of the Organisation NIKE "To bring inspiration and innovation to every athlete* in the world" * If you have a body, you are an athlete. TOYS ‘R’ US "Our Vision is to put joy in kids’ hearts and a smile on parents’ faces." AMAZON "Our vision is to be earth's most customer centric company; to build a place where people can come to find and discover anything they might want to buy online." IKEA Ikea’s Vision “Affordable solutions for better living”.

9. MISSION Mission is focused on present business scope – “who we are and what we do” – the reasons for our existence Mission describes who our customers are and what we produce as outcome for them Mission amplifies what brings the firm to this business or why it is there, what existence it seeks and what purpose it seeks to achieve as a business firm Mission defines the role that an organisation plays in the society Mission should be inclusive to include all stakeholders

10. CORE VALUES Describes how the business should be conducted Desired culture of the organisation Principles that guide the behaviour of the people involved in the organisation

11. EXPECT THE UNEXPECTED

12. ANNUAL BUSINESS PLAN Strategies/Goals Action Plan – who, who else, what support, by when, measurement criteria, status Infrastructure requirements Resources Required Organisation Structure (good for atleast two years)

13. AMAZING SENTENCE I do not know where family doctors acquired illegibly perplexing handwriting; nevertheless, extraordinary pharmaceutical intellectuality counterbalancing indecipherability transcendentalizes intercommunication's incomprehensibleness.

14. DISRUPTIVE INNOVATION

15. PORTER’S FIVE FORCES MODEL Competitive Analysis – five forces model of competition The five forces are: – Rivalry among existing firms – New entrants – Substitute products – Suppliers bargaining power – Customer bargaining power

16. STRATEGY Shutting doors first and then keeping only one door open Strategy seeks to relate the goals of the organization to the means of achieving them Strategy is partly planned and partly reactive

17. LEAD OR FOLLOW

18. COMPETE OR COLLABORATE

19. MERGER/ACQUISITION

20. GROW OR SHRINK

21. DIVERSIFICATION

22. FINANCIAL BUDGET Revenue Plan Working Capital Cycle Cash Flow Statement Statement of Profit or Loss Statement of Financial Position Assumptions and Milestones

23. BUSINESS PLAN PACKAGE Strategic Plan Annual Business Plan Organisation Structure Assumptions and Milestones Risk Assessment Financial Budget Key to success: Monthly Review of the Plan Vs. Actuals to take corrective actions, if any

24. WARREN BUFFETT’S RULES Rule No.1 – Do not lose any of your shareholders’ money Rule No.2 – Do not forget rule No.1

25. THANK YOU follow-up queries: tpanand@motivaluate.com tpanand@motivaluate.com Please visit my blog: tpanand.blogspot.com (TP Talks)