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Global Management Studies
GMS 200
Shavin Malhotra

Lecture 6: Chapter 8 - Management Planning Became big thing in 1960’s can outdo competition and can do well in uncertain external envir Strategic planning IBM, Google, Microsoft recruits planner and plan for future and where business move to the future; scarce =huge demand Transferring convicts – towards end of 18 century England began sending convicts to Australia Transportations was privately provided but publicly funded Money/ investment made by public Lot of convicts died along the way while on way to Australia b/c of overcrowding, poor nutrition sand little/ no medical treatment Some entrepreneurial captains hoarded food and medicine for the convicts and sold them upon arrival in Australia b/ 1790 & 1792, 12% of convicted deiend to the dismay of many good hearted English me/women who thought that banishment to aurailia How might captians be convinced to take better care of their human cargo? o Gov decide dot pay captin bonus for each convict that walked off the o Simple plan worked moratlity fell to virtually 0 = incetives Chile – hyperinflation During period of hyperinflations in chile the story told that the gov impostition of max price made ti unprofitable for suppliers to sell bread – the leagal max was below cost of production Good becoming more expensive Suppliers found that it was below cost of production there for unprofitable to make bread How will you get out of inflation? o Combine and sell goods together o Sell ingredients and offer service to make didn’t have to process it www.notesolution.com o Cahrgin them to use oven not selling bread but selling a service o Didn’t say anything about the wirght of the bread shorten the loaf they sold = which made it possible to make profit from the bread 500 g to 200 g bread o Impose a min weight on bread Euro Disney As a group make a decision wheter to lauch Euro Disney or not Unitl 1992, walt Disney comp expereing nothing but success 1 park open in californica, Anaheim in 1995 1970 reaped in florida Showed they can be success ill in Tokyo japna Disney execs turned attention in france , paris the self proclaimed capital of European culture in 199 French gov expecting to create 30,000 and contribute $ 1 B a year based on how they did at other locatoion o Land at 1971 price s subsidised o Provide $750 million loan below market rates o Spend millions of dollars on subways and railroads dir to Europe to Disney land o Give incentive and set up operation = bring job, rev and bump up ecomomy o Ex: Brussels will only be 90 mins by train o # of ppl w/in 2-6 hrs of paris site 2 hr drive = 17 million market that can attend 4 hr drive = 41 million 6 dr drive = 109 million 2 hr flight = 310 million www.notesolution.com o To open in 1992 o $4.4 B enterprise over 5000 acres and will grow next 2 yearto an eara 1/5 of prais itself o 6 hotels and 5200 rooms more rooms than Cannes o Projections st 11 million euros will visist Disney land in year alone Normally 12.7 euros visit US diney parks Euro mhave more vac time (4-5 weeks), US (2-3 weeks) All these ppl are 6 hrs of flight time f/ this California got 5.20% of visitors Florida 11.40% Tokyo 13.50% Paris 3.55% Projections was much below the turnover , weren’t overconfident Disney exects too successful • Will be perfect What would you decide? Whoud u go ahed now Later? need more atat to make Stats on how they respond to theme parts , services, Shelve the projects doesn t make sense b/c they have houses within a 2 hr region and theres no reason rent out a house • Euros are cheap Or any other plan www.notesolution.com Would your req any other data for your decision Would you price tickets at par w/ florida or lower or higher than florida? • Lower prices • Need more stats • Diff culture • Look at what time euros take off; synchornize seasons • Demographics children • No changes to the park itself • Paris known for other things than theme park -> make lower prices to attract more Results • 1 yr – 12 M visitors more than projections -> 1 M more • Tickets were priced higher than those in florida • Rev proj were not met • b/c Europeans didn’t stay in the hotel ppl came and left on the same day • a lot of rev come f/ lodging and eating than the ticket prices • euros are more frugal • packed their own food and shunned dthe hotels • hotels expensive and spent only 2 days unlike Us who spend 4 days • most euros use for day excursions and not destination for extended stay cultural probs www.notesolution.com • serve noo alcohol = astonishment where a glass of wine lunch is given • Monday = heavy day, Friday = light day What is a planning? Brianstroming ideas for the future Process of deciding today what has to be done today to be ready for tmrw Make plans now for future Keep in mind what parameters will change and how counter Process of collecting info and making decisions by which management formulates obj and chooses the pattern of action to achieve those obj bases on wat want to achieve and how Pertain with relevant info Why plan? If anything goes wrong it would be easy to react The cost of fixing the prob more costly Improves time managemnt Help achieve goals Planning is time consuming and cost ly make gather at one place, hugely expensive process A lot of org avoid Wat to create val o H.I ansoff (1970) Used 13 separate financial variab le sales, earnings, tatal assest, stock price Compared firms whihch do extensive planning w/ those which do no or very little planning www.notesolution.com Result = comp tha plan outperform other comp on nearly all variables = yes does create val o G.W Gershefski (1970) Must make decision of doing a vs. B Eval if we could be doing so
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