Business Planning Assignment: Exploring Purpose and Strategy

This homework assignment explores the purpose and key components of business planning. It addresses various aspects, including the importance of a well-defined business plan, strategic planning processes, and the essential elements that should be included in a business plan. The assignment delves into market analysis, competitor assessment, and the development of marketing and operational strategies. It further examines the impact of strategic plans on stakeholders, the role of vision statements, and the application of SWOT analysis for project success. Additionally, the assignment discusses performance measurement processes, emphasizing the importance of continuous improvement and the management-by-exception principle. The document provides a comprehensive overview of business planning concepts and their practical application.

Running head: PURPOSE OF BUSINESS PLANNING (QUESTION ANSWERS)
Purpose of Business Planning
Name of the Student
Name of the University
Author note

1PURPOSE OF BUSINESS PLANNING
Table of Contents
Task 1...............................................................................................................................................3
Answer to question 1.......................................................................................................................3
Answer to question 2.......................................................................................................................3
Answer to question 3.......................................................................................................................4
Answer to question 4.......................................................................................................................4
Answer to question 5.......................................................................................................................6
Answer to question 6.......................................................................................................................8
Answer to question 7.......................................................................................................................8
Answer to question 8.......................................................................................................................9
Answer to question 9.....................................................................................................................11
Answer to question 10...................................................................................................................12
Answer to question 11...................................................................................................................15
Answer to question 12...................................................................................................................16
Task 2.............................................................................................................................................18
Mission:.....................................................................................................................................18
Values Respect:.........................................................................................................................19
Caring:.......................................................................................................................................19
Excellence:.................................................................................................................................19
Innovation:.................................................................................................................................19

2PURPOSE OF BUSINESS PLANNING
Objectives..................................................................................................................................19
Strengths..............................................................................................................................20
Weaknesses........................................................................................................................20
Opportunities........................................................................................................................20
Threats..................................................................................................................................20
Marketing strategy.........................................................................................................................20
Task 3.............................................................................................................................................22
Task 4.............................................................................................................................................23
References......................................................................................................................................25

3PURPOSE OF BUSINESS PLANNING
Task 1
Answer to question 1
A well-thought-out business plan lets others know how the man who made the plan is serious,
and that you can handle all that running a business entails. It can also give you a solid roadmap
to help you navigate the tricky waters. The seven components a person must have in the business
plan include:
Executive Summary
Business Description
Market Analysis
Organization Management
Sales Strategies
Funding Requirements
Financial Projections
All of these elements can help a person to build his business, in addition to
showing lenders and potential backers that you have a clear idea of what he
is doing.

4PURPOSE OF BUSINESS PLANNING
Answer to question 2
Strategic planning is a systematic process that helps a eperson set an ambition for his business'
future and to determine how best to achieve it. Its primary purpose is to connect three key areas
which are:
 mission - defining the business' purpose
 vision - describing what a person wants to achieve
 plan - outlining how a person want to achieve his ultimate goals
Strategic planning is different to business planning. It requires stepping back from t day-to-day
operations and articulating where the business is heading, by setting long-term goals, objectives and
priorities for the future.
Answer to question 3
Key elements that should be included in a business plan are:
1. Business concept. Describes the business, its product and the market it
will serve. It should point out just exactly what will be sold, to whom and
why the business will hold a competitive advantage.
2. Financial features. Highlights the important financial points of the
business including sales, profits, cash flows and return on investment.
3. Financial requirements. Clearly states the capital needed to start the
business and to expand. It should detail how the capital will be used, and
the equity, if any, that will be provided for funding. If the loan for initial
capital will be based on security instead of equity, you should also specify
the source of collateral.
4. Current business position. Furnishes relevant information about the
company, its legal form of operation, when it was formed, the principal
owners and key personnel.
5. Major achievements. Details any developments within the company that
are essential to the success of the business. Major achievements include
items like patents, prototypes, location of a facility, any crucial contracts
that need to be in place for product development, or results from any test
marketing that has been conducted.
Answer to question 4
Research the Industry

5PURPOSE OF BUSINESS PLANNING
Understand the industry in which you plan to operate, researching historic performance
and growth forecasts. The Timmons model of opportunity recognition, a popular
technique for evaluating an industry, can help you assess market demand, market size
and margin analysis (Bryman and Bell 2015).
Analyze the Market
Define your target market. Use demographic and psychographic information to better
understand what your customers want, how they want to receive it and how you can
best reach them. This information will help you improve your offering, and it forms the
foundation for your marketing plan (Bryman and Bell 2015).
Size Up Your Competitors
Determine your direct and indirect competitors and consider how your product or
service compares to theirs. Note key attributes and success factors, evaluating your
business against the competition, and then identify your competitive advantage or
develop one using the information obtained in the competitor analysis.
Design Your Company
Choose your company's name, location and business model. Determine how you will sell
your product or service to your customer and how you will protect your competitive
advantage. If you plan on securing a patent, apply for one early because the process
can take more than a year.
Create a Marketing Strategy

6PURPOSE OF BUSINESS PLANNING
Develop a plan for reaching your target customer. It should contain information on
advertising channels, distribution avenues, pricing and product attributes. Include a
sales forecast that will provide the foundation for your business' financial plan.
Plan Your Operations
Determine how you will manufacture or deliver your product or service. Decide where to
locate your business and anticipate how your operations will change as demand grows.
Decide how ownership will be distributed and how investors and employees will be
compensated. Begin to build your team.
Determine Your Financial Needs
Calculate how much must be invested to start your business. You will need to fund
operations until the business can sustain itself. Keep in mind that actual sales are
usually lower, and expenses higher, than forecast. Decide which, if any, outside sources
of funding your business will utilize, and draft a plan for securing those funds.
Answer to question 5
The strategic plan impacts many, both outside as well as inside the organization. To varying
degrees these relationships must be recognized during various planning phases, including the
communication of the plan. Some of the possible stakeholders are:
 End Consumers
 household
 demographic segments
 psychographic segments
 purchasing behavior segments

7PURPOSE OF BUSINESS PLANNING
 commercial & industrial
 product use
 alternative products
 purchasing behavior segments
 industry classification
 Key Customer groups, if not direct to end consumer
 distributors
 retailers
 product transporters
 intermediary storage
 Employees
 internal, specify level
 sales force
 support personnel for outside relationships
 contractors (not really employees, but still impacted)
 Stockholders (owners)
 Board of Directors
 Financial community
 lenders (long & short term)
 banks
 Suppliers
 Interest groups
 community (local residents)

8PURPOSE OF BUSINESS PLANNING
 environmental
 social advocates
 industry trade groups
 other (specify)
 Public organizations
 governmental (specify)
 media
 non-profit (local, regional, national, world)
 schools
 public service & other charities
 Children
 school projects
Answer to question 6
Business plan defines the work your company intends to do. One element, the vision statement,
outlines your purpose, requirements and goals at the beginning of the plan. Developing a vision
for your plan involves identifying your business requirements so that you can state your
intentions clearly (Swamidass 2016). Doing so will enable you to obtain business sponsorship.
Obtaining funding and investment for your business endeavors often depends on your ability to
articulate your goals in a realistic manner. By defining your vision and requirements up front,
you can prevent changes to your requirements. Constantly changing requirements causes rework
and the waste of precious and costly resources (Hair Jr et al. 2015). Making a compelling
business vision plan ensures your business receives the funding and resources you need to make
your business successful. Like mission statements, vision statements help to describe the

9PURPOSE OF BUSINESS PLANNING
organization's purpose. Vision statements also include the organization values. Vision statements
give direction for employee behavior and helps provide inspiration. Strategic plans may require a
marketing strategy, which could include the vision statement to also help inspire consumers to
work with the organization.
Answer to question 7
The term "SWOT" is an acronym for the words "strengths", "weaknesses", "threats" and
"opportunities". A S.W.O.T framework involves composing lists of the internal strengths and
weaknesses a business that is relevant to a certain project and then creating lists of opportunities
and threats that exist outside of the company that could impact the project. For example, consider
a tech company wants to increase its sales by expanding its product offerings. If the company
owns a patent on a new type of computer processor technology, the patent could be listed as
strength, but if it the company does not have the resources to engineer and produce a prototype
of the new processor, managers might list lack of capital as a weakness. Venture capitalists often
invest in businesses with new ideas that have the potential for large growth, so the potential to
attract venture capital could be listed as on opportunity. If competitors are in the process of
developing similar technologies it could constitute a threat. Once all four lists are composed,
managers can brainstorm ways to maximize strengths, limit weaknesses, take advantage of
opportunities and avoid or reduce threats. The purpose of a Strengths, Weaknesses,
Opportunities, and Threats framework is to get managers thinking about everything that could
potentially impact the success of a new project. Failure to consider a key strength, weakness,
threat or opportunity could lead to poor business decisions. For example, if the tech company
with the patent for a new processor did not recognize the threat that its competitors were
developing similar products, it might overestimate the sales potential of the new processor and

10PURPOSE OF BUSINESS PLANNING
take on debt to fund the development of the processor only to discover that the new product does
not bring in enough revenue to pay off the debt. In other words, a strengths, weaknesses,
opportunities, and threats brainwork can help managers avoid making costly mistakes and
determine which projects are most likely to succeed.
Answer to question 8
Performance measurement is the process of collecting, analyzing and reporting information
regarding the performance of an individual, group, organization, system or component. One of
the most important aspects to be considered in relation to performance measurement process is
that the performance measures work qualitatively to provide the useful information about
products, processes and services that are produced in a business. Hence, implementing
performance measures is a great way to understand and manage and improve what a business
organization does.
The measurement of performance is a continuous process which involves checking the
performance against the standards that have been fixed to be followed. It leads to compare the
actual performance with the established standards. A manager needs to supervise, observe and
control the activities of his subordinates while he is involved in studying various summaries or
reports, so that he may manage the work in an effective manner getting the things accomplished
in a desirable manner. It requires the manager to constantly check the performance in order to
take corrective actions in case of deviations ensuring that such deviations do not occur gain.
Thus the Performance measurement is an ongoing, continuous improvement operation.
As stated above, the process of performance measurement leads to compare the actual
performance with the standards. This in turn helps managers to understand the extent at which

11PURPOSE OF BUSINESS PLANNING
the performance is getting deviated from the expected ones. This way determining whether
performance matches standards entails evaluating the differences and take necessary actions to
improve the performance. However, while analyzing deviations, it is important to consider that
some deviations in performance can be expected and so controlling by exception is useful in this
way. It is therefore important that a manager should concentrate on exceptional deviations
instead of trying to control each and every deviation. According to management by exception
principle by Fredrick W. Taylor, Managers should concentrate on only exceptional deviations
instead of trying to correct each and every deviation. It is also worth mentioning the saying, “If
you try to control everything, you may end up controlling nothing.”
The importance of performance measurement system lies in the fact that it not only improves the
performance, but also the productivity of a business entity by reducing costs. It is a good way to
align the activities with the plans being established. It provides necessary feedback that the
activities may be guided accordingly by allowing managers to implement best practices. It may
thus be said that performance measurement process is a great way to understand, manage and
improve the overall functioning state of a business organization. If done effectively and
efficiently, it drives success in business definitely.
Answer to question 9
Survey customers
 Surveying customers is the only probable way of getting customer feedback unless they
contact you.
 Most people are busy and have no time to pass redress (Swamidass 2016).
 You can provide survey through several ways such as emails and use of phone calls.