Chapter 1 - Planning

Question 1

4 Characteristics of a plan

Answer 1

1. Simplicity.
   - must be simple.
2. Practicality.
   - realistic.
3. Severability.
   - aggregate of parts.
4. Flexibility.
   - must allow for mid term changes.

Question 2

2 Disadvantages of bottom-up approach

Answer 2

1. Management may feel they lack control.

2. Business units fully into “their” plan, not accepting of changes made by management.

Question 3

Near environment

Answer 3

• Factors over which brokerage may have an influence.
• Main tool used is profiling.
• client profiling.
• market profiling.
• competitor profiling.

Question 4

Distant environment

Answer 4

Factors critical to long term survival.
Brokerage has no control or influence. 
-economy
-social/demographic forces
-technological change
-government action

Question 5

Advantages/Disadvantages to top-down approach

Answer 5

• Management feels firmly in control and in charge.

- Employees had no part in developing. it’s “managements” plan.

Question 6

3 Keys to successful implementation

Answer 6

1. Controlling implementation.
   - mobilize resources, get the right people to the right place.
2. Linking budgets to strategies, objectives, and goals.
3. Motivating for implementation.
   - common problem is that employees are not focused on accomplishing same objectives.

Question 7

Characteristics of action plan

Answer 7

• Consists of specific tasks to support the strategic plan.
• Apply to particular business unit.
• One year timeline
• Detailed
• Focus on how strategic plan will be achieved.

Question 8

Define Mission

Answer 8

Defines where brokerage is headed.

-What will we achieve?

Question 9

Define Strategy

Answer 9

Long term (3-5 years) battle plan. 
-Describes how brokerage intends to achieve mission.

Question 10

Define Objective

Answer 10

Refines broad mission and strategies into concrete actions.

Question 11

Analyzing the internal environment - What does the brokerage need to know?

Answer 11

• What it does better than competitors.
• What strengths aren’t being used effectively.
• What it’s weaknesses are.
• Financial strength.
• How strong human resources are.

Question 12

Defining a corporate focus

Answer 12

VVM

• Vision
• Value
• Mission

Question 13

What is the purpose of the strategic plan?

Answer 13

• Asses the future.
• Structure for dealing with risks/uncertainty.
• Consider backup plans for responding to change.
• Determine the purpose and direction of the brokerage.

Question 14

Competitor profiling.

Answer 14

Gathering information such as size, financial condition, location, products, service, and public image.

Question 15

Market profiling.

Answer 15

Identifying and analyzing factors in the market which may affect the brokerage.

Question 16

Client profiling.

Answer 16

Gaining an understanding of the clients to better serve their needs.

Question 17

2 major tools used to control implementation.

Answer 17

• Implementation program.

- Progress report.

Question 18

Components of a strategic plan

Answer 18

• Scan external environment
• Analyze internal environment
• SWOT
• Corporate focus
• Develop strategies
• Develop objectives
• Setting goals