Strategic Planning And Financial Management – Key Elements And Practices

Elements of a strategic plan

The key elements that comprise within the strategic plan are vision statements, mission statements, detailed goals, objectives, action plans and scorecards. These elements mainly help in tracking the progress to create a strategic plan for the business.

The purpose of business strategy is to define the goal, purpose and objective of the organisation. The tactical strategy is made by the middle level of management, while the operational plans describe day to day running of the company. Thus, three managers coordinate to prepare a business plan and budget for the organisation.

The reviewing of the strategic plan mainly contains the Mission, Vision, Values, Long-term goals and Action plans of the organisation.

True

The preparation of mission, goal and objective statements for a service facility is mainly based on the overall services that are being sold by the organisation. Thus, companies having service sales of websites would use mission, goals and objectives to maximise the level of users. Google is the best example of a service company.

Operational goals and objectives for a service facility are prepared by using the services that are being used by the customers. Hence, Google provides services of free searching, which enables the company to modify the goals and objectives for improving its operations.

Management budget is important as it helps the company reach its strategic goals by analysing the tactical and operational plans.

The seven steps when conducting a feasibility study are as follows.

• Preliminary Analysis
• Defining the scope
• Market research
• Financial assessment
• Roadblocks and alternative solutions
• Reassessment
• Go or no-go decision

Four best practices for a feasibility study are as follows.

• Market analysis
• Program design
• Business model
• Communications plan

True

False

Marketing

Key Performance Indicators help an organization to define and measure the relevant progress towards its goals

The key performance indicators of the organisation are Revenue growth, Revenue per client, Profit margin, Client retention rate, and customer satisfaction. The identification of the key performance indicators is essential, as it allows the management to prepare plans that can help in detecting the performance of the organisation.

The cash flow statement provides information on data regarding cash inflows and outflows of the organisation from its overall operations. With a cash flow statement, organisations are able to determine the level of cash that is left at the end of the finical period for the organisation.

The Financial reports are prepared and presented to provide the current financial status of the organisation while addressing about the income, expenses, assets, liabilities and equity conditions of the company.

True

True

Trends are formed in the financial statement to detect the progress of the organisation and determine whether its capability to sustain operations are declining or appreciating. Investors use the trend in financial statements to determine whether the organisation is financially healthy for investment purposes.

The key areas of the financial statements that can be exposed to risk are market risk, credit risk, liquidity risk, and operational risk. The financial statement indicates about the overall liquidity, credit and operational risk, which can hinder the progress of the organisation in the long run.

Budget Targets in relation to setting the financial plan is the measure of the estimated money for the fiscal period allocated to the operational expense and income of the organisation.

The purpose of business strategy

Stretch targets are mainly the forced measure of an organisation to alter their current processes for achieving a high difficulty level of success.

True

Profit is the total net income that is generated by the organisation after the deduction of all the expenses and taxes. Thus, with profits organisations are able to determine the actual cash inflows of the organisation that is generated after deducting the expenses.

False

The gross profit is obtained after deducting the cost of goods sold by the organisation while ignoring the administrative expenses, while net income is detected after deducting all the expenses of the organisation.

Objectives

Plans

Plans

Dollar

Organisation

Deviate

Strategies

True

The Break-even model utilises the interrelationships between the sales revenue and turnover, the cost to determine the level of output required for achieving a no profit no loss scenario.

The calculation of a breakeven has three areas, which are revenue, variable cost and fixed cost. The example of a breakeven model is as follows.

The service rate is determined by adding together with total costs while multiplying it with the desired profit margin for the automotive workplace.

The six important items that need to be included are as follows.

• Annual leave
• Public holidays
• Personal leaves
• Professional development/upskilling
• Business administration
• Non-billable meetings with potential new clients

The calculation of hours worked at the job each week is by dividing the annual pay with 52, as it would provide the hours and wages for 1 week, which is then divided to determine the hourly rate.

Contingency planning is mainly the overall preparation that the organization conducts for the response towards an event of an emergency. Thus, the event can be major or smaller scale such as court dispute incurring small fines by the organisation, as it controls the issues faced from uncertain payments.

Holding costs are mainly the overall storage of unsold inventory by the organisation, where the firm’s holding costs include storage space, labour, and insurance.

Rework costs are the expenses conducted by the organisation on repairs or adjustment of the defective item sold to the customers. Rework costs hinder the profits of the organisation.

True

All these answers are correct

Legal

Subcontractor

Services

Conditions

The major purpose of a business plan is to create a growth strategy along with determining the future financial needs of the organisation. Moreover, the business plan is used by the company to detect the prospect and evaluate the impact of the plan n future cash flows.

Preparation of the strategic plan and then the sub plans, which are as follows.

• Review or develop Vision & Mission
• Business and operation analysis
• Develop and Select Strategic Options
• Establish Strategic Objectives
• Strategy Execution Plan
• Establish Resource Allocation
• Execution Review

1. Mission

1. Review and update

Managers must review and update the automotive workplace business plan, as there are relevant changes and development in the automotive industry, which the business plan needs to cope with while conducting operations. The management of the organisation needs to notice the non-review and update of the automotive workplace business plan.

Five types of advertising the business could target are as follows.

• Social Media Advertising
• Pay-Per-Click Advertising
• Mobile Advertising
• Print Advertising
• Broadcast Advertising

During the development of the tactical plan, relevant advertisements are conducted to target the marketing of the business. Hence, the advertising source needs to be conducted before the launch of the product or services of the organisation. However, the advertisement needs to be aggressive during the first 3 years of the product to capture the maximum of the markets by the organisation after which the advertisement would be dependent on the trend on the demand from customers.

True

The six ways to reduce business costs in an automotive workplace are as follows.

• Consolidating the purchases, while negotiating better pricing
• Getting competitive prices from vendors
• Reviewing the vendors regularly
• Make variable expenses rather than fixed expenses
• Implementing fiscal discipline as the core company value
• Researching and improving ways to cut costs

Five examples of reducing a budget deficit in an automotive workplace are as follows.

• The budget deficit can be reduced in the automotive workplace by increasing revenues from the operations
• In addition, the budget deficit can be reduced, when the overall variable cost of controlled and reduced for the automotive workplace
• The budget deficit occurs from wrong assumptions made by the managers, which can be controlled by using a flexible budgeting system.
• The budget deficit can occur due to external factors, which can increase the cost of goods and labour
• The fall in demand for goods and services due to a loss in market share can also lead to a budget deficit.

The four steps to preparing a business case are as follows.

• Researching the market, competition and alternatives
• Comparing and finalizing the business along with the project management approaches
• Compiling the data for the strategies, goals and objectives
• Documenting all the relevant process

All these answers are correct.

True

The financial analysis helps the manager prepare the business case, as it directly corrects and evaluates all the data regarding the business, which can be studied by other aspirants detecting a similar problem. Hence, financial analysis allows managers to prepare adequate business cases for future use.

References:

Engert, S., & Baumgartner, R. J. (2016). Corporate sustainability strategy–bridging the gap between formulation and implementation. Journal of cleaner production, 113, 822-834.

Luthra, S., Garg, D., & Haleem, A. (2016). The impacts of critical success factors for implementing green supply chain management towards sustainability: an empirical investigation of Indian automobile industry. Journal of Cleaner Production, 121, 142-158.

Stadtler, H., Stadtler, H., Kilger, C., Kilger, C., Meyr, H., & Meyr, H. (2015). Supply chain management and advanced planning: concepts, models, software, and case studies. springer.

Tyagi, S., Choudhary, A., Cai, X., & Yang, K. (2015). Value stream mapping to reduce the lead-time of a product development process. International journal of production economics, 160, 202-212.

Order an Essay Now & Get These Features For Free:

Turnitin Report

Formatting

Title Page

Citation

Outline

Place an Order