exam 2 review

exam 2 review - 1 MGT 300: Exam 2 Review Chapter 4:...

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1 MGT 300: Exam 2 Review Chapter 4: Planning and Decision Making D.G. Yuengling & Son, Pottsville, Pennsylvania. Yuegling sales are up 225% in the last 6 years. America’s oldest brewery since 1831 doubled production capacity from 250,000 to 500,000 barrels of beer a year but if keep pushing for more the old brewery will break. CEO says problem of running risk of losing customer base because we don’t have any product on the shelves. Shortages so bad advertising budget has been cut from $3 to $2 a barrel. What could they do? 1. Add new storage and finishing tanks to increase production by 10%. 2. Outsource production to another company (would be more cost-effective, but would beer produced in other factories taste different) 3. Buy another brewery, but not many for sales and those that are would be expensive and require significant upgrades. 4. Build a new factory capable of producing 1.2 million barrels of beer per year, but that would cost $50 million and take 3 years. 5. “Do nothing,” company is already profitable, has low overhead costs, and is very efficient. Toyota plans to meet 15% of its market share by 2010 through geography and trucks. Achieving this goal would move them from 4 th largest car maker in the U.S. ahead of DaimlerChrysler, which has a 14.1 mkt share. In terms of geography opportunity to increase sales in Midwest (currently 5%share) It will have to add an additional new truck plant in San Antonia, TX. - Benefits and Pitfalls of Planning (Some people love planning because can only see its benefits, while others dislike it because can only see its disadvantages. Both views are correct) -Benefits of Planning- helps benefit both for COMPANIES and INDIVIDUALS *One of the best ways to improve organizational and individual performance. Companies that plan have larger profits and faster growth. Intensified effort (one with specific plan will work harder), persistence (working harder for longer periods, direction( persistent efforts toward activities that help accomplish their goals), and creation of task strategies (encourages people to think of better ways to do their jobs). -Planning Pitfalls 1. Impedes change and adaptation . Sometimes companies become so committed to achieving the goals set forth in their plans, or on following the strategies and tactics spelled out in them, that they fail to see that their plans aren’t working or that their goals need to change. Ex: Sony with flat screens 2. False sense of certainty. For plans to work, the assumptions on which they are based must hold true. If the assumptions turn out to be false then the plans based on them are likely to fail. 3. Detachments of planners. Plans are meant to be guidelines for actions, not abstract theories. Planners need to be familiar with the daily details of their businesses if they are to produce
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This note was uploaded on 02/11/2009 for the course AC 210 taught by Professor All during the Spring '08 term at Alabama.

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exam 2 review - 1 MGT 300: Exam 2 Review Chapter 4:...

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