Business 1.9
Corporate Planning and Implementa1on
9.1 Corporate Planning
1. Components of corporate plans
A typical corporate plan will include:
v The overall objectives of the organisation to be achieved within a given
time frame may be profit related or sales growth-related
v The strategy to be used to attempt to meet these objectives. E.G. - to
achieve sales growth, the business could consider the choices as analysed
by the Ansoff matrix:
• increase sales of existing products – market penetration
• develop new markets for existing products – market development
• research and develop new products for existing markets – product
development
• diversify – new products for new markets.
v The objective for each department will be set out based on the overall
objective
v Once the strategies have been implemented, the results should be
measured and evaluated.
v The results are then compared with the original objectives.
Process of:
SeHng corporate
objecIves
Deciding on strategies to
achieve it.
ImplemenIng the planned
strategies
Monitoring and
evaluaIng the results
, 2. Potential benefits of corporate plans
v Senior managers have a clear focus and sense of purpose for what they
are trying to achieve. Strategies are then chosen with the best chance of
achieving them
v The plan helps to communicate this sense of purpose and focus to all
within the business - important for corporate plans to be effective.
v The original objectives can be compared with actual outcomes to see
how well the business’s performance matched its aims.
v When effectively done, preparing for and producing the corporate plan
forces senior managers to consider the organisation’s strengths and
weaknesses in relation to the business environment.
3. Potential limitations of corporate plans
v The best-laid plans of any business can be made obsolete by rapid and
unexpected internal or external changes.
v Does not render planning useless as part of the planning process is to
look ahead to consider how to respond to unforeseen events
v However, if a business refuses to make any variations or adaptations to it
then the inflexibility has a bad effect on the business
v The corporate planning process should be as adaptable and flexible as
possible to allow corporate plans to continue to be relevant and useful
during periods of change.
4. The main internal influences on a corporate plan
v Financial resources: Can it be afforded?
v Operating capacity: Will this be sufficient if expansion plans are approved
by directors?
v Managerial skills and experience: This may be a major constraint on the
plan’s success, especially if the diversification strategy is chosen.
v Employee numbers and skills: Workforce planning is key
v Culture of the organisation
5. The main external influences on a corporate plan
v Macroeconomic conditions: Expansion may have to be put on hold during
a recession.
v Central bank and government economic policy changes.
v Likely technological changes: These could make plans very outdated.
v Competitors’ actions: The competitive nature of the market.
Corporate Planning and Implementa1on
9.1 Corporate Planning
1. Components of corporate plans
A typical corporate plan will include:
v The overall objectives of the organisation to be achieved within a given
time frame may be profit related or sales growth-related
v The strategy to be used to attempt to meet these objectives. E.G. - to
achieve sales growth, the business could consider the choices as analysed
by the Ansoff matrix:
• increase sales of existing products – market penetration
• develop new markets for existing products – market development
• research and develop new products for existing markets – product
development
• diversify – new products for new markets.
v The objective for each department will be set out based on the overall
objective
v Once the strategies have been implemented, the results should be
measured and evaluated.
v The results are then compared with the original objectives.
Process of:
SeHng corporate
objecIves
Deciding on strategies to
achieve it.
ImplemenIng the planned
strategies
Monitoring and
evaluaIng the results
, 2. Potential benefits of corporate plans
v Senior managers have a clear focus and sense of purpose for what they
are trying to achieve. Strategies are then chosen with the best chance of
achieving them
v The plan helps to communicate this sense of purpose and focus to all
within the business - important for corporate plans to be effective.
v The original objectives can be compared with actual outcomes to see
how well the business’s performance matched its aims.
v When effectively done, preparing for and producing the corporate plan
forces senior managers to consider the organisation’s strengths and
weaknesses in relation to the business environment.
3. Potential limitations of corporate plans
v The best-laid plans of any business can be made obsolete by rapid and
unexpected internal or external changes.
v Does not render planning useless as part of the planning process is to
look ahead to consider how to respond to unforeseen events
v However, if a business refuses to make any variations or adaptations to it
then the inflexibility has a bad effect on the business
v The corporate planning process should be as adaptable and flexible as
possible to allow corporate plans to continue to be relevant and useful
during periods of change.
4. The main internal influences on a corporate plan
v Financial resources: Can it be afforded?
v Operating capacity: Will this be sufficient if expansion plans are approved
by directors?
v Managerial skills and experience: This may be a major constraint on the
plan’s success, especially if the diversification strategy is chosen.
v Employee numbers and skills: Workforce planning is key
v Culture of the organisation
5. The main external influences on a corporate plan
v Macroeconomic conditions: Expansion may have to be put on hold during
a recession.
v Central bank and government economic policy changes.
v Likely technological changes: These could make plans very outdated.
v Competitors’ actions: The competitive nature of the market.
