Strategiese en bedryfsrekeningkundige beplanning in die nywerheid

Abstract

INTRODUCTION. Theories and views on this subject are both proliferous and confounding. In this study an attempt is made to provide a practical framework for strategic planning for industry, especially the smaller industry. A practical framework is selected after a brief review of the frameworks of the following authors who are regarded as representative. (i) ANSOFF, I. (ii) WELSCH, G.A. (iii) ARGENTI, J. CORPORATE STRATEGY; PENGUIN BOOKS LTD., ENGLAND. BUDGETING, PROFIT PLANNING AND CONTROL; 3RD EDITION, PRENTICE HALL. CORPORATE PLANNING; 3RD EDITION; GEORGE ALLEN & UNWIN LIMITED, LONDON. Argenti's framework is accepted for the major part. The viewpoint s of the following authors were incorporated where the writer felt that their views were more pertinent: (i) KATZ, R.L. MANAGEMENT OF THE TOTAL ENTERPRISE; 1970; PRENTICE HALL. (ii) DRUCKER, P.F.: MANAGING FOR RESULTS; 3RD EDITION, PAN BOOKS LIMITED, LONDON.

The Framework Selected. The specific framework was selected because of the following pertinent reasons: (i) It proves to be both practical and comprehensive; (ii) It succeeds in establishing a golden thread of logic from company objective to company strategy in quantitative terms, a characteristic often lacking in works on this subject. The function of strategic and accountant planning is to decide on what the long term objectives of the enterprise are and what has to be done to achieve these objectives . The objective of the enterprise is taken as the Discounted Cash Flow return on Shareholders Capital. The specific quantitative figure should be established by the shareholders. This profit objective is used to arrive at the Company' s pretax profit necessary to maintain the profit objective over the planning period. Analysis is made of revenue, costs and volumes and projections are made of the trends discovered. Projections include the behaviour of product life cycles and all factor s both internal and external that might affect profit. A forecast zero (" O" ) is made on the basis that established trends will continue as if the Company will do "nothing new" (ARGENTI page 105 ) . For each forecast the range of error must be calculated and incorporated to portray the estimated accuracy. The difference between the forecast company profits and the profit target are established. These pose the objectives of the company in the coming years.

Company "constraints" which are self-imposed and possibly limiting moral policies are noted. Consequently a survey and analysis is made of company means, that is, a list of possible actions that the company might take in order to achieve the profit target, keeping in mind the "constraints" (ARGENTI, page 136). These actions include investigation of possible opportunities for existing and new products. A checklist is used to place existing products and product lines into their . proper perspective in order to weed out weaknesses and to build on strengths or competitive advantage. This is recognised as the crux of the investigation. Evaluation of alternatives should be done by the discounted cash flow method. Those that will achieve company objectives are selected. The application of the framework is shown in two parts. Firstly, the application of the total framework on one company. Secondly, the identification of competitive advanges and disadvantages of two other companies.