Page 73 - DCOM102_DMGT101_PRINCIPLES_AND_PRACTICES_OF_MANAGEMENT

Unit 3: Planning

Notes
entry, rivalry from competitors and pricing norms. In regard to substitutes, Wal-Mart in
order to achieve its aim of customer satisfaction has selling goods under its own legal
brand. Wal-Mart’s big box phenomenon has changed the retailing industry in the United
States which is often considered as discount stores and makes profit through high volume
of purchases and low markup on profits (Parnell, 2008). Wal-Mart with its low cost and
ever expanding strategy has made a dramatic impact since 1962 when Sam Walton first
started his business. With this strategy, Wal-Mart has now over 4000 stores and outlets in
US and other countries through acquisition and mergers.
Question
Comment on the strategy adopted by Wal-Mart.

Source: www.articlesbase.com/strategic-planning-articles/strategic-management-a-case-study-of-
walmart-inc-945260.html#ixzz1EC5kw4jX

3.7 Summary

Planning is essential to survive and grow in a fast changing environment. A plan helps a
firm take an advantageous position in the market, in line with its internal capabilities.
To be useful, planning has to be carried out in a systematic way outlining objectives,
developing premises, evaluating options, formulating derivative plans, securing
commitment from people and ensuring a suitable follow up.
Planning helps a firm achieve its goals. It reduces the risks of uncertainty and improves
the quality of decisions. It has a healthy impact on people, too.

To be effective, plans must receive support from people at all levels. They should also
know the pay-offs from planning well in advance.
Planning can take many forms and styles in practice. Both long-range and short-range
plans have to be combined effectively to produce results. Also, there must be effective
monitoring to see whether everything is on track or not.
Objectives have to be set in key areas in every organisation, such as market standing,
innovation, productivity, resources, performance etc.
To be useful, these must be set in an atmosphere of close participation, mutual trust and
confidence.

The strategic management techniques have to be applied to make the implementation of
the plan effectively.

3.8 Keywords

Functional strategies: Functional strategies include marketing strategies, new product
development strategies, human resource strategies, financial strategies, legal strategies, supply-
chain strategies, and information technology management strategies. The emphasis is on short
and medium term plans and is limited to the domain of each department’s functional
responsibility.

Planning: an act of formulating a program for a definite course of action
Strategic business unit: It is a semi-autonomous unit that is usually responsible for its own
budgeting, new product decisions, hiring decisions, and price setting. An SBU is treated as an
internal profit centre by corporate headquarters.
Strategy: an elaborate and systematic plan of action.

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