Reference no: EM133377966

From the reading: Why It Matters: Planning and Mission Why does a business need to define its mission and engage in planning? Dani Alvarez is a management consultant with the firm Business Advisors. She's sitting in her office one day when the telephone rings. She picks it up and hears the voice of Tom Wilson, an old high school friend. "Hi Dani. This is Tom Wilson from Southside High. Remember me?" They discuss old times for a few minutes, and then Tom gets down to business. "Dani, I need your help. I started a business several years ago, and we're in trouble." Dani quickly searches her memory and recalls that Tom started a business called Sun City Boards several years ago selling high-end surfboards on the West Coast. Last Dani had heard, the business was doing well. "Yeah Tom. I remember when you started your shop, but I thought the business was growing successfully." Tom replies, "We did well the first couple of years, but things haven't been good for a while now. We're losing money, and I'm not sure how much longer I can keep the doors open." Dani assures Tom that she is happy to help and asks him to send a few items over to prepare for a trip to visit his operations. "Just send me a copy of your current business plan, financial forecasts, and annual operating budget." There's a pause on the other end of the line, and then Tom says, "Well, I can send you our bank statements and invoices. We don't have any of the other documents you're asking about." Based on that response, Dani already has a good idea of the organization's problem: an obvious lack of planning that never bodes well for a business. In this module, you're going to learn about the importance of an organization establishing a clear vision and mission and how they guide the business planning cycle. The business plan is the roadmap that guides the organization to success. Let's return our attention to Sun City Boards and its owner, Tom Wilson. Dani travelled to Tom's operations on the West Coast and confirmed her suspicions that the problems the organization is facing are due to a lack of planning. Dani is meeting with Tom to report on her findings and to submit her recommendations. "OK Tom, I've spent the last several days going through your operations and records, and I'm confident that there are actions you can take that will help turn around the business." Tom lets out a long sigh and says, "Dani, you have no idea how glad I am to hear that. So at a high level, what's the problem?" "In a nutshell, the problem with Sun City Boards is that you have lost your focus and there is no clear plan for moving forward." Tom looks confused, so Dani explains. "When you started the business, what was your vision?" Tom answers, "To set people free from the earth ... free to ride the waves." "Perfect!" Dani responds. "And how were you going to do that?" Tom thinks for a moment and then emphatically declares, "We will strive to provide the absolute best in high-end surfboard design and production!" Dani tells Tom that he has just created the vision and mission statements for Sun City Boards. She further explains, "You have to start creating a focused plan that will help the organization deliver on its vision and mission. The reason your company is struggling is that there is no clear roadmap to success." Tom asks, "What do you mean?" Dani continues, "When you started the company you were very successful because you focused on one key thing-making the best surfboards anyone had seen. As a result, everything your business did revolved around that core idea." Tom interrupts, "OK Dani, I think I see where you're headed. When we started making money in the early days, I began to start expanding into other areas without a lot of thought. I listened to salespeople who came in and told me that I should branch out into low-end surf gear, then swimwear, then camping gear. Customers don't know what we're all about anymore. And neither do managers and employees." Dani can see Tom is getting his arms around the concept of vision and mission, so she moves on. Next, she presents her recommendation that Tom and his key leaders should come together regularly to create, review and update Sun City's business plan. This is new to the team, so she gives them a quick example: Define Objectives: Sun City Boards should look to reduce non-core product lines and associated inventory. The minimum margin target is 35 percent across all remaining product lines. Develop Premises: Monitor competitor's plans to implement a new polymer board and determine the potential impact on Sun City's sales. Evaluate Alternatives: Evaluate the opportunity of opening new retail outlets along the West Coast. Also, explore international sales options for high-end surfboards. Identify Resources: Analyze the level of capital necessary to achieve expansion goals and incorporate a plan to close financial gaps in the annual budget. Plan and Implement Tasks: Gantt chart or other project planning tool that outlines the actions necessary to reach the goals outlined earlier. Determine Tracking and Evaluation Methods: Create SMART goals for both managers and employees that align with direction the overall business plan provides. Finally, Dani reminds Tom that a planning process is only a tool and that the plan should be regularly reviewed and updated. Dani warns him that planning is no substitute for taking action, but it is a guide for him and his team as to what actions should be taken. This consulting project has reminded Dani how important it is for an organization to have a clear vision and mission to know where it's headed. Likewise, the planning process is critical to know how it's going to get there. The alternative is like trying to take a cross-country trip without a map you don't know where you might end up. )

1. From the reading select one of the strategic management tools described in the reading, explain how it works, and explain why it will be of value to Sun City Boards. Carefully consider the tools described in the reading to assist with the Objectives and Analysis step of the strategic management process.

2. What is the purpose of the tool? What conclusions will it help Sun City Boards draw?

3. How does the tool work? How does it measure the relevant factors, or how does it derive importance from them?

4. How will your selected tool align with other strategic steps in the process? In other words, when the analysis leads you to a conclusion, how will you use the conclusion in the next step?

5. What specifically does the tool NOT address?