This revision presentation provides business students with an overview of the role of planning in business strategy. It highlights the key parts to the strategic planning process and considers the main business benefits of effective planning.

1. Corporate
Planning

2. What is planning?
Planning is a process of

3. What is a plan?
A plan is a
statement of
intended
means to
accomplish a
goal

4. Types of plan in business
• Strategic plan - sets out the overall
direction for the business in broad scope
• Business plan – the actions that a business
will take to compete
• Operational plan
– Details how the overall objectives are to be
achieved
– Specifies what senior management expects from
specific departments or functions

5. Levels of planning
Strategic Business Operational
Level Business wide Business unit Functional area
Focus Direction and Direction and Resources and
strategy for strategy for the action for
whole business business unit functional area
Nature Broad and More detail on Specific to the
general goals and tasks function
Time Long term 1-2 years Up to one year
horizon 3+ years

6. Some purposes of planning

7. The business benefits of planning
Planning gives: Planning helps
• Certainty • Shape thoughts
• Confidence • Think through
• Route map scenarios
• Evidence to others of • Co-ordinate activities
our thoughts • Identify SWOT
• Examine risks
• Communicate ideas

8. A plan is more than a forecast
• Forecasts are predictions - they concern
events and trends over which the
business has little or no control
• Plans are about what the business
intends to do
• But forecasts (especially sales forecasts)
are essential in planning

9. Top down or bottom up planning?
Top down planning Bottom up planning
• Decisions taken at the top • Involves all levels of
• Lower level managers managers and others
have little input • Ensures all are involved and
• Plans are passed down all issues considered
the line for • Functional managers able to
implementation suggest and evaluate plans
• Planers are able to focus • A danger of having too
on strategic issues but narrow a perspective
can be divorced from the without seeing the “big
detail picture”

10. Key planning questions
• Where are we now?
• How did we get here ?
• Where would we like to be?
• How do we get there?
• Are we on course to achieve our
targets?

11. The planning process
• Analyse the external environment
• Analyse the internal environment
• Define the business and mission
• Set corporate objectives
• Formulate strategies
• Make tactical plans
• Build in procedures for monitoring and
controlling

12. The planning cycle

13. Where are we now?
• The purpose of situational analysis is to
determine which opportunities to pursue
• PEST / PESTEL analysis - identify and analyse
trends in the environment
• Competitor analysis – understand and, if
possible, predict the behaviour of competitors
• Audit of internal resources
• SWOT analysis: build on strengths ,resolve
weaknesses, exploit opportunities, confront
threats

14. Situational analysis
• Analysing the present situation is the prelude to
devising objectives and strategies for the future
• We need to understand where we are and
where we have come from before planning the
future
• But we must always be careful to avoid paralysis
by analysis
• This describes a situation in which no decisions
are made because of the disproportionate
amount of effort that goes into the analysis
phase

15. Where are we going?
• Vision
– Non-specific directional and motivational guidance for the
entire business
– What will the business be like in five years time
• Mission statement
– An business’s reason for being
– It is concerned with the scope of the business and what
distinguishes it from similar businesses
• Objectives
– SMART objectives
• Goals
– Specific statements of anticipated results

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