CORPORATE PLANNING MODULE

Concept:

1967 model: Corporate Health parameters (Refer: Michigan Survey Research Centre for General Electric, USA

Sr.Nos. Parameters 1 Sales: Volume, value, number

At present S1

Optimum possible S2 Gap(S3-S2)

Objectives S3

2.

Market share (M.S.)

M.S.1 G1 PBT1 E.S.1 M.S.G.1

M.S.2 G2 PBT2 E.S.2 M.S.G.2

Gap

M.S.3 G3 PBT3 E.S.3 M.S.G.3

3.

Rate of market growth (G)

Gap

4 5.

Profit before tax (PBT) Employee satisfaction (E.S.) / Morale/ Market standing (Goodwill) Relation with the Power at a point of time Customer Satisfaction Index

Gap Gap

6.

Gap

7.

P1 C.S.I.1

P2 C.S.I.2

Gap

P3 C.S.I.3

Add

Gap

PRODUCT MARKET GROWTH MATRIX / BUSINESS DEVELOPMENT MODEL [ADAPTED FROM IGOR ANSOFF]

Short-term I - Sales optimisation Increased sales, Rate of usage, New outlets/usage, Elimination of non-profitable product-lines, Relevant product lines (Width, depth, consistency)

Medium-term II - New product development

Emphasis on existing (Technical) capacities and strengths

(Capacity optimisation)

III - Long term Market development

IV -

Very long term Diversification

Concentric -

Non-concentric

SWOT analysis, Idea Generation Technique

Four sub-segments :I II III IV : : : : Present markets present products, Present markets new products, New markets present products, New markets new products.

1. Michigan Survey Research Centre in 1967 functioned as Management Consultants to General Electric, USA, for a period of six months. During this in-depth Consultancy assignment, they developed seven parameters (The eighth one was added by the undersigned much later). Internationally, these parameters serve as Corporate Planning Module, which are often termed as Health of any organization. Also, to help in Diagnosis, Prognosis and even partly Objective setting of any organization, this Module is used extensively in the real world. Simultaneously, Igor Ansoffs Product-market mix helps in decision making by the Management of any organization regarding the various Strategic dimensions, which can serve as viable alternatives for an organization to survive and grow. For example: In the second column, 8 Parameters have been given. (Enclosed module). In the third column, at a point of time, using the Diagnostic concept (Refer: Problem Solving Approach), the status of the organization, parameter-wise, has been assessed and reflected. [Refer: S1 for parameter-1]. In column number-4, using the concept of Prognosis i.e. optimum utilisation of available resources, once again at a point of time, say for Parameter No.1, S2 is the given status. In column number-5, for example, is S3 i.e. what the firms Management is aspiring to (Definition: Short term, quantifiable, achievable targets. This can also be for mid term and long term) Using column numbers 4 and 5, the Gap (S3 S2) has been estimated for parameter number-1. This methodology will be applicable for all parameters. Based on the above-mentioned Gap analysis, the concept of Strategy will be applicable, ie: The process of matching available resources with identified markets needs and wants. [Refer: The strategic approach adopted by Ms.Disha in the Disha caselet]. Finally, next point will be clear definition of the Tactical Issues i.e. the 6 Ps [Refer: Jerome McCarthy and Prof. Robert Lauterborn] P1: P2: P3: P4: P5: P6: Product Price Place Promotion Process People.

The sixth step will be Management Information System (MIS) i.e. the process of formal followup, feedback and consequent replanning a continuous process Linkage with Igor Ansoffs Product-market mix: (Enclosed module) The Management of any organization, using this module, has a number of strategic options to achieve their objectives and ensure achievement of above-mentioned Gap analysis. These are: Option-1: market: Cell-I Option-2: optimization of Option-3: Concentrate only on present available resources and known Think about product developments (Cell-II) to ensure capacity all available resources. Long term (Cell-III)

Go in for new market development with available resources and minor strategic adjustments.(Horlicks for women, children of different age brackets). Option-4: Diversification (Cell-IV)

4.1 Concentric diversification will evolve around known technologies and known markets (An example: Metal Box (I) Ltd. can think about flexible packaging in addition to existing rigid packaging) 4.2 Non-concentric diversification: Tap totally unknown new market opportunities, where risks are probable rewards (Benefits) may also be very high. (An example: ITCs forays in hotel industry, edible oil industry, which are different from existing tobacco industry). Combination of the above. (Permutation combination). : Which route will you decide on? Why? How will you implement? To sum-up: Using the Diagnostic modules, as mentioned above, Management of any proactive organization has to achieve its clearly laid down objectives via an Optimum Strategic Route. [Refer: Cost-benefit analytical technique]. I hope this explanation will be relevant to you all during your deliberations on Tuesday dated 23/8/2011.

high but

totally

Best of luck,

Sincerely,

Prof.(Dr.) P.K.Ghosh Professor of Management Enclosed: Two modules. C.C.: For all students : C.C.: Ms. Mousumi Chaudhuri Deputy Manager, Academic Coordinator:
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