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Principles of Management Week 3 Notes

by: David Meyer

Principles of Management Week 3 Notes MGT 3150 A

Marketplace > Georgia Institute of Technology - Main Campus > MGT 3150 A > Principles of Management Week 3 Notes
David Meyer

GPA 3.8

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About this Document

We started discussing fundamentals of planning including more detail of the strategic planning.
Principles of Management
Dr. Flury
Class Notes
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This 4 page Class Notes was uploaded by David Meyer on Sunday September 11, 2016. The Class Notes belongs to MGT 3150 A at Georgia Institute of Technology - Main Campus taught by Dr. Flury in Fall 2016. Since its upload, it has received 10 views.


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Date Created: 09/11/16
Fundamentals of Planning and Business Strategy    ● 3 things you do in planning  ○ Identify a future state or target  ○ Identify your base case or current situation  ○ Determine how to get from point A to point B  ● Why is planning important?  ● Different types of plans; 4 types:  ○ Strategic  ■ Breadth: Broad; focus on entire organization  ■ Timeframe: multiple years in the future; affected by how dynamic the  industry is  ■ Specificity: more direction than specific plans; I plan on going on vacation  next year, etc.  ■ Frequency of use: brand new plan  ■ Responsibility of senior management to create these plans  ○ Functional  ■ Breadth: Focus more on discipline of operation  ■ Timeframe: detailed at the annual level; some glances at a couple years  in future just to match up  ■ Specificity: medium specificity  ■ Frequency of use  ■ Plans align with the strategic plans  ■ Developed by upper levels of middle management but may include  participation from lower levels  ○ Operational  ■ Breadth: Focus on certain activities; specific  ■ Timeframe: shortest timeframe  ■ Specificity: most specific; I am going to Seattle next year for vacation  ■ Frequency of use  ■ Mostly scheduling; production schedule; sales person call schedule;  budgets  ○ Contingency  ■ Back up plans essentially  ○ Four dimensions that distinguish plans  ■ Breadth: focus  ■ Timeframe: time for plans  ■ Specificity: goals  ■ Frequency of use: how much you reuse old plans  ● Strategic Planning  ○ It is all about beating the competition; competitive strategy  ○ Win by having superior performance  ■ Creating a competitive advantage  ○ The idea is to figure out how to create a competitive advantage, sustain that  advantage, in order to have superior performance and beat the competition  ● Different Methods for strategic planning; 4 steps  ○ Analyze, formulate (corporate and business), implement  ○ Analyze: analyze position relative to external environment; opportunities and  internal capabilities; strengths/weaknesses  ■ Swot analysis: look into future and plan goals and strategies to use  strengths and weaknesses  ○ Implement: communicating strategy to your organization; different capitals and  how to use those resources in the formulation stage   Strategic Planning    ● At the corporate level: set the grand strategy  ○ Growth  ○ Stability  ○ Renewal  ● Business Unit Level  ○ Most people think of strategy at this level  ○ How you will compete in the marketplace  ○ Establish goals for the business; maybe to double revenue  ■ These will lead to more specific goals  ● Functional Level  ○ Functional goals that allow the BU to reach their goals  ● Examples:  ○ GE capital allocations across its four major lines of business  ■ Strategic at the Corporate Level  ○ GM develops a 3 year plan for its chevrolet brand  ■ Strategic at the Business Unit Level  ○ Finance prepares an annual budget for the marketing organization  ■ Operational   ○ P&G reduces prices for Tide detergent  ■ Strategic at the Functional Level  ○ P&G sells it Pampers brand to Lever Brothers  ■ Strategic at the Corporate Level  ● Grand Strategies  ○ Growth Strategy  ■ Intention of the business is to grow revenues or profitability  ■ Not necessarily operational growth; if you can create more revenue  without more operations then you are golden  ■ Want a sustainable competitive advantage:  ○ Stability Strategy  ■ Not much change or external environment is extremely unpredictable  ■ If you are in the growth phase and choose stability then you will follow the  curve and reach decline phase.  ■ The reasons to pursue this strategy:  ● They are in a mature market  ● You have no predictions on what the market will look like  ○ Renewal Strategy (defensive strategy)  ■ Strategies for organizations that are in trouble  ■ Sub strategies:  ● Turnaround: chapter 11 bankruptcy in order to organize and come  out more profitable  ● Divestiture  ● Liquidation: shut the business down; declare chapter 7 bankruptcy  where you find a trustee to maximize the non­protected assets  and supply the capital to the creditors  ● Growth  ○ Emergence  ○ Growth  ○ Maturity: smartphones  ■ Can last a long­time: breakfast cereals  ■ Not dynamic: tobacco, breakfast cereals  ■ Industries consolidate and have fewer competitors; oligopolies  ○ Decline: CD’s 


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