PRESENTATION FOR MEMBERS OF ICAI DUBAI CHAPTER 24 th October 2015 OBJECTIVES OF BUSINESS Profitability sole motive of business all other objectives are subservient to profit motive Survival ID: 647418
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BUSINESS PLANNING PROCESS
PRESENTATION FOR MEMBERS OF ICAI DUBAI CHAPTER24th October 2015Slide2
OBJECTIVES OF BUSINESS
Profitability: sole motive of business; all other objectives are subservient to profit motiveSurvival: function of nature of ownership, nature of business competence of management, general and industry conditions, financial strength of the enterprise, etc.Stability: cautious and conservative objective
Growth
:
increase
in assets, manufacturing facilities, increase in sales volume
Efficiency
:
doing
things in best possible manner; utilizing resources in a most suitable combination to get highest
productivitySlide3
BUSINESS PLANNING PROCESSSlide4
FRAMEWORK OF STRATEGIC MANAGEMENT
Stage One: Beginning – starting point – Where are we now? – situational analysis in the environmental context – SWOT AnalysisStage Two: End – destination – Where we want to be? – vision and missionStage Three: Means – How to get there?Stage Four: Evaluation – Which is the best way? – SWOT AnalysisStage Five: Control – How can we ensure arrival at the destination?Slide5
STRATEGIC PLAN
Long TermBig PictureEnvironmental ScanVision – WhatMission – WhyCore Values - HowSlide6
COMPONENTS OF BUSINESS ENVIRONMENT
External – factors outside the organisation which provides opportunities or poses threatsInternal – factors within the organisation which impart strengths or cause weaknesses of a strategic natureSlide7
PESTLE ANALYSIS
P – Political – political stability, ideologies, taxation policy, regulatory bodies, government policies, government term and change, thrust areas of political leadersE – Economic – situation, trends, market and trade cycles, specific industry cycles, end-user drivers, interest and exchange rates, inflation and unemployment, consumer spendingS – Socio-cultural – lifestyle trends, demographics, attitudes and opinions, brand image, buying patterns, ethnic/religious factors, media views and perception
T – Technological – replacement technology, maturity of technology, manufacturing maturity, innovation potential, technology access, licensing, patents, intellectual property rights
L – Legal – business and corporate laws, employment law, competition law, health & safety law, international treaty and law, regional legislation
E – Environmental – ecological/environmental issues, environmental hazards, environmental legislation, energy consumption, waste disposalSlide8
VISION
Vision is the ultimate goal, dream and the guiding star of the OrganisationNIKE"To bring inspiration and innovation to every athlete* in the world"* If you have a body, you are an athlete.
TOYS ‘R’ US
"Our Vision is to put joy in kids’ hearts and a smile on parents’ faces."
AMAZON
"Our vision is to be earth's most customer centric company; to build a place where people can come to find and discover anything they might want to buy online."
IKEA
Ikea’s Vision “Affordable solutions for better living”.Slide9
MISSION
Mission is focused on present business scope – “who we are and what we do” – the reasons for our existenceMission describes who our customers are and what we produce as outcome for themMission amplifies what brings the firm to this business or why it is there, what existence it seeks and what purpose it seeks to achieve as a business firmMission defines the role that an organisation plays in the society
Mission should be inclusive to include all stakeholdersSlide10
CORE VALUES
Describes how the business should be conductedDesired culture of the organisationPrinciples that guide the behaviour of the people involved in the organisationSlide11
EXPECT THE UNEXPECTEDSlide12
ANNUAL BUSINESS PLAN
Strategies/GoalsAction Plan – who, who else, what support, by when, measurement criteria, statusInfrastructure requirementsResources RequiredOrganisation Structure (good for atleast two years)Slide13
AMAZING SENTENCE
I do not know where family doctors acquired illegibly perplexing handwriting; nevertheless, extraordinary pharmaceutical intellectuality counterbalancing indecipherability transcendentalizes intercommunication's incomprehensibleness.Slide14
DISRUPTIVE INNOVATIONSlide15
PORTER’S FIVE FORCES MODEL
Competitive Analysis – five forces model of competitionThe five forces are:Rivalry among existing firmsNew entrantsSubstitute productsSuppliers bargaining powerCustomer bargaining powerSlide16
STRATEGY
Shutting doors first and then keeping only one door open Strategy seeks to relate the goals of the organization to the means of achieving themStrategy is partly planned and partly reactiveSlide17
LEAD OR FOLLOWSlide18
COMPETE OR COLLABORATESlide19
MERGER/ACQUISITIONSlide20
GROW OR SHRINKSlide21
DIVERSIFICATIONSlide22
FINANCIAL BUDGET
Revenue PlanWorking Capital CycleCash Flow StatementStatement of Profit or LossStatement of Financial PositionAssumptions and MilestonesSlide23
BUSINESS PLAN PACKAGE
Strategic PlanAnnual Business PlanOrganisation StructureAssumptions and MilestonesRisk AssessmentFinancial Budget
Key to success
: Monthly Review of the
Plan Vs. Actuals to take corrective actions, if anySlide24
WARREN BUFFETT’S RULES
Rule No.1 – Do not lose any of your shareholders’ money
Rule No.2 – Do not forget rule No.1Slide25
THANK YOU
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