3 Levels Of Business Planning

3 Levels Of Business Planning-15
Plans in one area are to be modified’ to meet the constraints imposed by another parts of the business.

Plans in one area are to be modified’ to meet the constraints imposed by another parts of the business.

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In most of the organizations there are three levels of strategies: corporate, business and functional levels. Corporate Level Strategy Corporate level strategy is fundamentally concerned with the selection of businesses that the organization should compete and with the development and coordination of that portfolio of business.

It includes all the objectives and scope of the organization to satisfy stakeholder’s expectation.

It is the senior executive who tries to avoid operational problems of tactical planning and who views the future in terms of longer time horizon].

Following the ‘growth-vector matrix’ of Ansoff, a company while pursuing growth strategy as a part of its corporate planning may adopt any of two approaches: expansion and diversification.

Chang and others have added two more approaches: acquisition and merger, and international operation.

Strategy is not just for top executives, middle and lower level managers too must be involved in strategic-planning process to the extent possible.Strategic actions, when appropriately taken and pursued, may accidently or deliberately extend the ‘maturity’ stage of PLC.Levitt gives an example of various stages in the life cycle of oil:(a) Crude oil for medicine,(b) Paraffin for lighting,(c) Paraffin for space heating,(d) Petrol for internal combustion engines,(e) Oil for central heating, and(f) Petro-chemical industry.For example, many firms make ‘belt buckles’; however, one small firm designs speciality ‘belt buckles’ with corporate logos for companies.Product life cycle (PLC) is another concept which is of value for taking strategic actions.Corporate Planning (CP) is essentially an ‘assessment of the future and making provisions to meet the future—exploiting the opportunities the future might bring and combating the threats it may hold’.It is a systematic planning to reason how a company will get where it wants to go.Certain key factors such as ROI, sales per person and other trends are observed constantly for internal studies. In contrast, a company in fashion industry producing women’s dresses has to concentrate on strategic issues for one year or so, as the business activities are to be adjusted in the light of consumer tastes and preferences.External developments relating to general economic conditions, technological advances, consumer habits, competition and many other factors are closely studied since they may require revisions in planning at any time. The strategic planning phase of C P process governs the acquisition, use, and disposition of resources to achieve corporate goals.This action taken at an earlier point of the PLC curve could help postpone the day of maturity.This exemplifies that PLC can be extended by introducing existing products to new markets and that such action is strategically vital as the product moves into maturity (the top point of the curve) associated with low growth or actual decline in both sales and profits.


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