Project planning, Lecture notes of Project Management

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PROJECT PLANNING

Project planning basically is for the entrepreneur to plan for survival,profit and diversification

AREAS OF PROJECT PLANNING

PLANNING THE PROJECT WORK

PLANNING THE MANPOWER AND

ORGANISATION

PLANNING THE MONEY

PLANNING THE INFORMATION

SYSTEM

FUNCTIONS OF PLANNING

It provides a basis of organising the work

on the project and allocating

responsibilities to individuals

It is a mean of communication and

coordination between all those involved

in the project

It induce people to look ahead

It instill a sense of urgency and time

consiousness

It establishes the basis for monitoring and

control

RATIONALE OF PROJECT PLANNING

a)It is essential to survive in the

most dynamic situations especially in

modern competitive world

b)Planning strengthening the

position of entrepreneur to lead

through right direction for better

survival

c)Planning gives an ”overall

picture” of constraints faced and

enables to coordinate his limited

resources to maximum effort

PRINCIPLES OF PROJECT PLANNING

The factual basis of the project,its customers and its environment should be investigated To make planning realistic,it is necessary to have a clear understanding of one’s business strength and weakness Alternative opportunities based the resources of the project and the anticipated needs of the customer should be developed Planning is process,not an isolated ocassional act,hence plan should be periodically reviewed and not be a mere paper work

PORTFOLIO PLANNING TOOLS

Growth direction

Growth rate

Growth strategies

Placing products in BCG matrix

results in 4 categories in a

portfolio of a company

1)STARS

2)CASH COWS

3)DOGS

4)QUESTION MARKS

BCG as a planning tool

1)The BCG growth share matrix is widely

used as a strategic planning tool giving

planners a sense of direction

2)The matrix facilitates the strategic

planning process and services as a rich

sources of ideas about possible strategic

options

3)In multiproduct

organisation,management can use this matrix

as a guide to allocate limited resources

SPACE FRAMEWORK

Strategic Position And Action

Evaluation

It is an approach to

hammer out an appropriate

strategic posture for a firm and its

individual businesses

This helps in explaining the

current posture of a firm

SPACE Considers 4 dimension

namely

1)Company’s competitive

advantage

2)Company’s financial strength

3)Industry strength

4)Environmental stability

COMPANY’S FINANCIAL STRENGTH 

Return on investment

Leverage and liquidity

Capital required/available

Cash flow

Ease of exit from market

Risk involved in business

INDUSTRY STRENGTH

GROWTH POTENTIAL PROFIT POTENTIAL FINANCIAL STABILITY TECHNOLOGICAL KNOW-HOW RESOURCE UTILISATION CAPITAL INTENSITY EASE OF ENTRY INTO MARKET PRODUCTIVITY,CAPACITY UTILISATION

STEPS IN SPACE

1)AGGRESSIVE POSTURES

An aggressive posture means that firm must fully exploit opportunities available to it,must step into acquisition opportunities, maintain optimum allocation of resources to maintain competitive strength and improve its market share. Here the company enjoys 2 advantages a)a competitive advantage and a considerable financial strength b)attractive industry operating in a relatively stable environment

COMPETITIVE POSTURE

Here the company enjoys a)A competitive advantage but has a limited financial strength b)Belongs to an attractive industry operating in a relatively unstable environment ** It means the company have to enhance competitive advantage by product improvement and differentiation,widen the product line and properly raise and maintain financial resources