1 Describe the three steps of the planning process and the relationship between planning and strategy.

1. The Nature of the Planning Process
   Planning is the process of identifying and selecting goals and actions for the organization.
   1. Levels of Planning
      1. Corporate-level plans – top management decides the organization's mission and goals in terms of the industries and markets.
      2. Business-level plans – the long-term goals of the division that are intended to achieve the goals of the corporate-level plans.
      3. Functional-level strategy – actions that departments plan to do to allow the organization to achieve its goals.
   2. Who plans? – at the business level, planning is the responsibility of divisional managers.
   3. Time horizon of plans
      1. Long-term plans – five or more years
      2. Intermediate-term plans – one to five years
      3. Short-term plans – one year or less
   4. Standing plans and single-use plans
      1. Standing plans – useful for situations involving programmed decisions.
      2. Single-use plans – useful for dealing with nonprogrammed decisions
   5. Why planning is important – planning forces managers to consider the future and how to prepare for it.
      1. Planning forces managers to participate in decision-making.
      2. Planning gives the organization direction and purpose.
      3. A plan coordinates the activities of managers in different functional areas to ensure that they work together effectively.
      4. A plan can be used to control the performance of managers.
   6. Scenario planning (contingency planning) – a forecast of possible future conditions and how the organization should respond to them.

2 Explain the role of planning in predicting the future and in mobilizing organizational resources to meet future contingencies

2. Determining the Organization's Mission and Goals
   1. Defining the business – Who are our customers? What customer needs are we satisfying? How are we satisfying these customer needs?
   2. Establishing major goals – primary goals give the organization a direction and purpose.

3 Outline the main steps in SWOT analysis.

3. Formulating strategy
   1. SWOT analysis – the process of identifying the organization's strengths, weaknesses, opportunities, and threats as the first step in creating strategy at all levels of the organization.
   2. Porter's five forces model
      1. Rivalry among organizations in the industry
      2. Potential entry into the industry
      3. Power of suppliers
      4. Power of customers
      5. Threat of substitute products

4 Differentiate among corporate-, business-, and functional-level strategies.

4. Formulating Corporate-level Strategies
   1. Concentration on a single business – an attempt to develop a strong competitive position in an industry.
   2. Diversification – producing new goods or expanding to a new type of business or industry.
      1. Related diversification – entering a new business or industry in order to create a competitive advantage in the organization's existing businesses.
      2. Unrelated diversification – expanding into a new industry that is not related at all to the company's existing businesses.
   3. International expansion
      1. Global strategy – marketing the same standardized product in every country with the same basic approach.
      2. Multidomestic strategy – customizing products and marketing strategies to fit the conditions in each country.
      3. Importing and exporting
         1. Exporting – producing the company's products domestically and then selling them to companies that are in other countries.
         2. Importing – buying products from companies that are in other countries.
      4. Licensing and franchising
         1. Licensing – a company receives a fee for allowing a foreign company to manufacture and distribute some of its products.
         2. Franchising – a company sells the rights to use its name and procedures to another company for an initial fee and a share of the revenues of that newly-created franchise.
      5. Strategic alliances – managers share resources and profits with a foreign company
      6. Joint venture – two or more companies agree to share the investment and profits for a new business.
      7. Wholly owned foreign subsidiary – a company creates its own production and marketing capabilities in a foreign country without help from a local company in that country.
   4. Vertical integration – a company owns more than one level of the distribution channel for a product
5. Formulating Business-level strategies
   1. Low-cost strategy – producing goods and services at a lower cost level than competitors.
   2. Differentiation strategy – trying to gain a competitive advantage by creating products or marketing strategies that are different from competitors
   3. Stuck in the middle – inability to decide on what type of strategy to pursue
   4. Focused low-cost and focused differentiation strategies
      1. Focused low-cost strategy – serving a small number of market segments in an attempt to become the lowest-cost company serving those segments.
      2. Focused differentiation strategy – serving a small number of market segments but trying to be different from the competition in the company's products and marketing strategies.
6. Formulating Functional-level strategies
   The company attempts to improve its functional areas in order to create more value for its customers.

5 Describe the vital role played by strategy implementation in determining managers' ability to achieve an organization's mission and goals.

7. Planning and Implementing Strategy
   An organization assigns responsibility to managers for implementing the organization's strategy, develops detailed actions plans for this strategy, sets a time frame for implementation, allocates resources, and holds managers accountable for the achievement of the organization's goals.