Corporate planning is concerned with every aspect of an organisation and is developed at the highest management level. In some cases this will involve activities spread throughout a number of different countries and the work of thousands of people. By its nature, then, a corporate plan will be wide-reaching and not too detailed. It will be longer-term than operational plans and also it will need to be more flexible in order to allow for changes in the organisation's environment over time. Fayol made the following points in regard to planning:
(:) Plans have objectives and are guided by policies.
(:) Planning is a process made up of closely linked stages.
(:) There are methods and techniques which can be used in planning.
(:) Short-range planning is easier than long-range.
It is important, therefore, to carry out careful analysis of the factors which make up the external environment. These could include:
(:) analysis of the current market size and its rate of change, in order to assess its future movement;
(:) market research of existing and potential clients in order to determine current and future expectations;
(:) an investigation of current and emerging competitors, an assessment of potential competitors, in each case with respect to their strengths and weaknesses;
(:) an analysis of the stability of own market share and likely trends;
(:) consideration of the effectiveness of the distribution system;
(:) a review of supplier network, in particular a detailed analysis of major suppliers, and of patterns of selling;
an analysis of any agencies which the organisation uses, looking at trends in agency practice and cost-effectiveness in particular. With regard to agencies of major importance this needs to be very detailed, as with the analysis of competitors.
An example of the value of analysing market size and adjusting future business to cater for an expanding niche was shown by Torex, a computer software company which appeared to be bucking the trends in the computing sector. At a time when many commercial customers were cancelling or postponing IT spending, Torex's customers, who were mainly healthcare providers such as the NHS, were expanding their systems and making funds available for systems development. Torex was only a small company compared with others in the market but, with plenty of room to grow, it produced rapidly rising profits and a matching market reputation.
A company which reviewed its market sector and made a strategy shift was the engineering firm Weir, who chose to concentrate their efforts on the manufacture of pumps and valves. This rather mundane work offered a wide client base from such applications as paper mills to oil refineries, in a growing market. It also opened up possibilities of follow-up services. As a consequence of this change of strategy the company greatly improved its position. Unilever provides us with an example of coping with the problems of dealing with unreliable agencies. They put up for sale their relatively new home cleaning business, known as My home, because they failed to find a reliable supply of cleaning staff. As a spokesperson for Unilever has said, "finding good Mrs Mops is a hard job". My home was intended to be used as a way of promoting Unilever household cleaning products. However, with only a few thousand customers, the trial, which was intended to run for at least another year before a decision about its future was taken, was brought to a premature end.
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