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Unit 6: Strategic Planning for Management Control

6. Final review and approval: The revised plan usually is discussed at length in a meeting of Notes
senior corporate officials. Final approval comes from the Chief Executive Officer. The
approval should come prior to the beginning of the budget preparation process, because
the strategic plan is an important input to that process.
7. Tools used: Tools used for analysing and deciding on new programme are NPV, IRR,
specialized techniques (e.g: Risk analysis, sensitivity analysis, game theory, optimum
pricing models, contingent claim analysis, decision three analysis, etc.) and internal
guidelines and procedures for submission of capital expenditure programs. For ongoing
programs, analytical tools can be identified as value chain analysis and zero base review.

Analytical techniques that aid programming process can be identified as computer model,
activity based costing, variable cost analysis and productivity gain etc.

Self Assessment

Fill in the blanks:
8. The analysis is done both by the ………….. and by the marketing, production and other
functional executives at headquarters through discussions.
9. Comparisons with ………………….., with the performance of other companies or with
standard costs for certain types of activities may indicate opportunities for improvement.



Case Study MTV’s Growth Strategy

Introduction
More than one billion people around the world see MTV every day, according to its
American parent Viacom. Although there are global stars, like Madonna and Eminem,
MTV mainly broadcasts through 40 national or regional music channels, each with a
distinctive chart sound. This case explores the reasons why MTV’s strategy is more local
than global.

Programme Content
When MTV began in 1981, it broadcast largely to its American home audience and its
programme content was primarily music videos. By 2005, the US was still MTV’s largest
and most profitable market. But the programming had moved from simply music to
include reality television programmes like the activities of The Osbournes and the baiting
of celebrities on Punk’d. Nevertheless, music was still the central theme and the MTV
Annual Music Awards were still able to cause controversy.

MTV pioneered the reality television format in 1992 with a programme called The Real
World. It was about a group of young people living in an apartment in New York. It was
originally planned to use actors but the company did not have sufficient funds, so it
observed real people at zero cost instead. The company had the same low-budget, free-
wheeling culture in 2005 - except for the vast sum it paid the Osbournes to have television
cameras follow them for months. This was all part of the way of staying creative and in
touch with its young target audience.
MTV was a major part of the global media company Viacom and it was under pressure to
deliver profits. Tom Freston, 45-year-old chief executive of MTV Networks, was aware of
Contd...

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