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Principles of Marketing, 14/E Philip Kotler,  Gary Armstrong, solutions manual and test bank
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Principles of Marketing, 14e (Kotler)

Chapter 2   Company and Marketing Strategy: Partnering to Build

Customer Relationships

1) Which of the following involves adapting a firm to take advantage of opportunities in its constantly changing environment?

A) long-range planning

B) short-range planning

C) media planning

D) strategic planning

E) annual planning

Answer:  D

Diff: 2        Page Ref: 38

Skill:  Concept

Objective:  2-1

2) When a firm develops and maintains a strategic fit between its goals and capabilities, it is performing ________.

A) mission planning

B) values planning

C) strategic planning

D) business-portfolio planning

E) operations planning

Answer:  C

Diff: 1        Page Ref: 38

Skill:  Concept

Objective:  2-1

3) Which of the following is the first step in strategic planning?

A) set objectives and goals

B) develop the business portfolio

C) define the company mission

D) plan marketing strategies

E) identify threats and weaknesses

Answer:  C

Diff: 1        Page Ref: 39

Skill:  Concept

Objective:  2-1

4) Which of the following is NOT a step in the strategic planning process?

A) defining the company mission

B) setting company objectives and goals

C) designing the business portfolio

D) planning marketing and other functional strategies

E) evaluating all members of the value chain

Answer:  E

Diff: 2        Page Ref: 39

Skill:  Concept

Objective:  2-1

5) Which of the following provides an answer to these questions: What is our business? Who are our customers? What do our customers value? What should our business be?

A) objectives and goals

B) a mission statement

C) a business portfolio

D) marketing and functional strategies

E) operational strategies

Answer:  B

Diff: 2        Page Ref: 39

AACSB:  Communication Abilities

Skill:  Concept

Objective:  2-1

6) ________ should be market oriented and defined in terms of ________.

A) Annual plans; product needs

B) Strategic plans; company needs

C) Long-range plans; company needs

D) Mission statements; customers' needs

E) Objectives; competitors' threats

Answer:  D

Diff: 2        Page Ref: 39

Skill:  Concept

Objective:  2-1

7) A company's mission statement serves as a statement of ________.

A) fact

B) sustainability

C) purpose

D) financial goals

E) employee commitment

Answer:  C

Diff: 1        Page Ref: 39

AACSB:  Communication Abilities

Skill:  Concept

Objective:  2-1

8) Which of the following is NOT a market-oriented business definition?

A) "to nourish lives by making them healthier, easier, and richer"

B) "to sell tools and home repair and improvement items"

C) "to deliver low prices every day"

D) "to be the guardian of our customers' financial dreams"

E) "to bring inspiration and innovation to every athlete in the world"

Answer:  B

Diff: 2        Page Ref: 39

Skill:  Concept

Objective:  2-1

9) All of the following are examples of product-oriented mission statements EXCEPT which one?

A) "We are an online video service."

B) "We run theme parks."

C) "We sell shoes."

D) "We sell lifestyle and self-expression; success and status; memories, hopes, and dreams."

E) "We rent hotel rooms."

Answer:  D

Diff: 2        Page Ref: 39

Skill:  Concept

Objective:  2-1

10) Which of the following is the principle objective of a market-oriented mission statement?

A) to satisfy basic customer needs

B) to satisfy basic supplier needs

C) to satisfy basic stockholder needs

D) to satisfy basic owner needs

E) to satisfy basic partnership needs

Answer:  A

Diff: 2        Page Ref: 39

Skill:  Concept

Objective:  2-1

11) All of the following are accurate guidelines for a company's mission statement EXCEPT which one?

A) A mission statement should be realistic.

B) A mission statement should be narrow.

C) A mission statement should emphasize the company's strengths in the marketplace.

D) A mission statement should be specific.

E) A mission statement should motivate employees.

Answer:  B

Diff: 3        Page Ref: 40

AACSB:  Communication Abilities

Skill:  Concept

Objective:  2-1

12) Revlon has clearly defined its "mission" of selling lifestyle and self-expression. In order for the firm to launch its strategic plan, the mission needs to next be turned into detailed ________ that guide each level of the company.

A) sets of strategies

B) sets of tactics

C) product mixes

D) supporting objectives

E) sets of promotional tools

Answer:  D

Diff: 3        Page Ref: 40

Skill:  Concept

Objective:  2-1

13) The collection of businesses and products that make up a company is called its ________.

A) strategic business unit

B) mission statement

C) strategic plan

D) business portfolio

E) operational factor

Answer:  D

Diff: 1        Page Ref: 40

Skill:  Concept

Objective:  2-2

14) Business portfolio planning involves two steps: ________ and ________.

A) identifying SBUs; assessing the attractiveness of SBUs

B) analyzing the current business portfolio; shaping the future business portfolio

C) identifying internal strengths; identifying external opportunities

D) conducting a SWOT analysis; establishing marketing controls

E) identifying growth opportunities; evaluating growth opportunities

Answer:  B

Diff: 2        Page Ref: 40

Skill:  Concept

Objective:  2-2

15) Paul Pierce is busy working with other managers evaluating the products and businesses making up their company. Paul is engaged in ________.

A) defining the company's mission statement

B) preparing a business portfolio

C) portfolio analysis

D) marketing planning

E) marketing control

Answer:  C

Diff: 2        Page Ref: 42

Skill:  Concept

Objective:  2-2

16) Which of the following can be a company division, a product line within a division, or sometimes a single product or brand?

A) a market

B) the BCG

C) an SBU

D) a PLC

E) a value delivery network

Answer:  C

Diff: 2        Page Ref: 42

Skill:  Concept

Objective:  2-2

17) After management has identified the key businesses making up its company, what is the next step in portfolio analysis?

A) identifying businesses in which to invest

B) assessing the attractiveness of its SBUs

C) deciding whether to harvest any businesses

D) completing short-range planning

E) identifying SBUs

Answer:  B

Diff: 2        Page Ref: 42

Skill:  Concept

Objective:  2-2

18) The best-known product portfolio planning method was developed by ________.

A) the Boston Consulting Group

B) Philip Kotler

C) the SWOT Consulting Group

D) the SRI Consulting Firm

E) James P. Hess

Answer:  A

Diff: 2        Page Ref: 42

Skill:  Concept

Objective:  2-2

19) Most portfolio analysis methods evaluate SBUs on two dimensions, namely ________ and ________.

A) market share; strength of the SBU's position

B) market diversification; relative market share

C) market or industry attractiveness; strength of the SBU's position

D) market growth rates; profits

E) market penetration; market development

Answer:  C

Diff: 2        Page Ref: 42

Skill:  Concept

Objective:  2-2

20) In the Boston Consulting Group approach, ________ provides a measure of market attractiveness.

A) relative market share

B) market development

C) market penetration

D) market growth rate

E) market segmentation

Answer:  D

Diff: 2        Page Ref: 42

Skill:  Concept

Objective:  2-2

21) In the Boston Consulting Group approach, ________ serves as a measure of company strength in the market.

A) relative market share

B) market development

C) market diversification

D) market growth rate

E) market segmentation

Answer:  A

Diff: 2        Page Ref: 42

Skill:  Concept

Objective:  2-2

22) The BCG growth-share matrix classifies four types of SBUs. They are ________, ________, ________, and ________.

A) product; price; promotion; placement

B) sales; market share; price; promotion

C) stars; cash cows; question marks; dogs

D) planning; implementing; leading; controlling

E) market penetration; market development; product development; diversification

Answer:  C

Diff: 2        Page Ref: 42

Skill:  Concept

Objective:  2-2

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Water-Resources Engineering, 2/E  David A. Chin solutions manual
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Successful Project Management, 5th Edition instructor  manual and  test bank

• includes Microsoft® Project 2010
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 Instructor Manual

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Identifying and Selecting Projects

TRUE/FALSE

     1.   The initiating phase of the project life cycle starts with recognizing a need.

ANS:  T

	Feedback
Correct	The initiating phase of the project life cycle starts with recognizing a need, problem, or opportunity for which a project or projects are identified to address the need.
Incorrect	The initiating phase of the project life cycle starts with recognizing a need, problem, or opportunity for which a project or projects are identified to address the need.

PTS:   1                    DIF:    E                    OBJ:   1. Discuss how projects are identified

KEY:  Knowledge

     2.   Every project that is identified is selected to be completed.

ANS:  F

	Feedback
Correct	Sometimes organizations have several needs and limited funds and cannot select every project to be completed.
Incorrect	Sometimes organizations have several needs and limited funds and cannot select every project to be completed.

PTS:   1                    DIF:    E                    OBJ:   1. Discuss how projects are identified

KEY:  Knowledge

     3.   Unexpected events are reasons for an organization to decide to initiate a project.

ANS:  T

	Feedback
Correct	Projects are identified in various ways during an organization's strategic planning; in response to unexpected events, or as a result of a group of individuals deciding to organize a project to address a particular need. Projects are initiated after the project is identified.
Incorrect	Projects are identified in various ways during an organization's strategic planning; in response to unexpected events, or as a result of a group of individuals deciding to organize a project to address a particular need. Projects are initiated after the project is identified.

PTS:   1                    DIF:    E                    OBJ:   1. Discuss how projects are identified

KEY:  Analysis

     4.   Quantitative benefits of a project are the intangible benefits of completing a project such as employee morale.

ANS:  F

	Feedback
Correct	Quantitative benefits include the financial benefits. Intangible benefits such as employee morale are qualitative and may have an indirect effect that is immeasurable.
Incorrect	Quantitative benefits include the financial benefits. Intangible benefits such as employee morale are qualitative and may have an indirect effect that is immeasurable.

PTS:   1                    DIF:    E                   

OBJ:   2. Explain how projects are prioritized and selected           KEY:  Knowledge

     5.   Disadvantages for doing a project may have a positive impact on an organization.

ANS:  T

	Feedback
Correct	One disadvantage for doing a project could be the extensive amount of investment necessary for the project. The organization could experience a positive impact by gaining market share or increasing organizational capacity from completing the project.
Incorrect	One disadvantage for doing a project could be the extensive amount of investment necessary for the project. The organization could experience a positive impact by gaining market share or increasing organizational capacity from completing the project.

PTS:   1                    DIF:    M                  

OBJ:   2. Explain how projects are prioritized and selected           KEY:  Analysis

     6.   Projects that are not similar cannot be compared when making a selection to move forward with a project.

ANS:  F

	Feedback
Correct	The set of criteria for evaluation should include quantitative and qualitative factors that are important to the organization and will help to set the priority level of the projects.
Incorrect	The set of criteria for evaluation should include quantitative and qualitative factors that are important to the organization and will help to set the priority level of the projects.

PTS:   1                    DIF:    M                  

OBJ:   2. Explain how projects are prioritized and selected           KEY:  Analysis

     7.   The reaction of an advocacy group is categorized as a negative consequence for a project.

ANS:  F

	Feedback
Correct	The reaction of an advocacy group could be favorable and be a positive benefit.
Incorrect	The reaction of an advocacy group could be favorable and be a positive benefit.

PTS:   1                    DIF:    M                  

OBJ:   2. Explain how projects are prioritized and selected           KEY:  Application

     8.   Surveys of stakeholders can be used to gather only quantitative data.

ANS:  F

	Feedback
Correct	Surveys of stakeholders can be used to gather quantitative and qualitative date necessary to make a decision about going forward with a project.
Incorrect	Surveys of stakeholders can be used to gather quantitative and qualitative date necessary to make a decision about going forward with a project.

PTS:   1                    DIF:    M                  

OBJ:   2. Explain how projects are prioritized and selected           KEY:  Application

     9.   The project charter is also called a project authorization or a project initiation document.

ANS:  T

	Feedback
Correct	The project charter is sometimes called a project authorization or a project initiation document.
Incorrect	The project charter is sometimes called a project authorization or a project initiation document.

PTS:   1                    DIF:    E                   

OBJ:   3. Identify and describe at least eight elements of a project charter  

KEY:  Knowledge

   10.   The project title should be a code word even if the project is not confidential.

ANS:  F

	Feedback
Correct	The project title should be concise and communicate a vision for the end result of the project, unless confidentiality is necessary and a code name is used.
Incorrect	The project title should be concise and communicate a vision for the end result of the project, unless confidentiality is necessary and a code name is used.

PTS:   1                    DIF:    E                   

OBJ:   3. Identify and describe at least eight elements of a project charter  

KEY:  Knowledge

   11.   The project purpose in the project charter may include prior documents for selecting the project.

ANS:  F

	Feedback
Correct	The project purpose in the project charter summarizes the need and justification for the project and may reference prior documents for the rationale for the project.
Incorrect	The project purpose in the project charter summarizes the need and justification for the project and may reference prior documents for the rationale for the project.

PTS:   1                    DIF:    E                   

OBJ:   3. Identify and describe at least eight elements of a project charter  

KEY:  Knowledge

   12.   The project description in the project charter is a high-level description of the project and references more detailed documents regarding key performance requirements.

ANS:  T

	Feedback
Correct	The project description in the project charter provides a high-level description of the project and may include the major tasks, major phases, and a work breakdown structure.
Incorrect	The project description in the project charter provides a high-level description of the project and may include the major tasks, major phases, and a work breakdown structure.

PTS:   1                    DIF:    E                   

OBJ:   3. Identify and describe at least eight elements of a project charter  

KEY:  Knowledge

   13.   The project objective in the project charter indicates the deliverable, schedule, and budget for a project.

ANS:  T

	Feedback
Correct	The project objective in the project charter states what is expected to be accomplished and can include the expected time frame and the funds authorized.
Incorrect	The project objective in the project charter states what is expected to be accomplished and can include the expected time frame and the funds authorized.

PTS:   1                    DIF:    E                   

OBJ:   3. Identify and describe at least eight elements of a project charter  

KEY:  Knowledge

   14.   The success criteria in the project charter indicate the expected benefits of the project including what the expectations are for project success.

ANS:  T

	Feedback
Correct	The success criteria or expected benefits in the project charter indicate the quantitative benefits of the project.
Incorrect	The success criteria or expected benefits in the project charter indicate the quantitative benefits of the project.

PTS:   1                    DIF:    E                   

OBJ:   3. Identify and describe at least eight elements of a project charter  

KEY:  Knowledge

   15.   Funding statements in a project charter may be broken into the amount authorized by project phase.

ANS:  T

	Feedback
Correct	The funding amount listed in a project charter indicates the total amount of funds authorized for the project.
Incorrect	The funding amount listed in a project charter indicates the total amount of funds authorized for the project.

PTS:   1                    DIF:    E                   

OBJ:   3. Identify and describe at least eight elements of a project charter  

KEY:  Knowledge

   16.   The major deliverables in the project charter describe the details of the work packages in the work breakdown structure.

ANS:  F

	Feedback
Correct	The major deliverables in the project charter state what is expected to be completed at the end of the project.
Incorrect	The major deliverables in the project charter state what is expected to be completed at the end of the project.

PTS:   1                    DIF:    E                   

OBJ:   3. Identify and describe at least eight elements of a project charter  

KEY:  Knowledge

   17.   The acceptance criteria describe the criteria necessary for the sponsor to approve the deliverables.

ANS:  T

	Feedback
Correct	The acceptance criteria for a project describe the quantitative criteria for each major deliverable.
Incorrect	The acceptance criteria for a project describe the quantitative criteria for each major deliverable.

PTS:   1                    DIF:    E                   

OBJ:   3. Identify and describe at least eight elements of a project charter  

KEY:  Knowledge

   18.   Meeting the acceptance criteria listed in the project charter means the customer is satisfied.

ANS:  F

	Feedback
Correct	Meeting the acceptance criteria means the deliverable has met the quantitative criteria; it does not mean that the customer is satisfied with the performance of the project team or the final deliverable.
Incorrect	Meeting the acceptance criteria means the deliverable has met the quantitative criteria; it does not mean that the customer is satisfied with the performance of the project team or the final deliverable.

PTS:   1                    DIF:    E                   

OBJ:   3. Identify and describe at least eight elements of a project charter  

KEY:  Knowledge

   19.   A milestone schedule lists target dates for phases of a project.

ANS:  T

	Feedback
Correct	A milestone schedule lists the target dates or times for the achievement of key events for the project. These key events could be deliverables or phases.
Incorrect	A milestone schedule lists the target dates or times for the achievement of key events for the project. These key events could be deliverables or phases.

PTS:   1                    DIF:    E                   

OBJ:   3. Identify and describe at least eight elements of a project charter  

KEY:  Knowledge

   20.   The project justification includes the key assumptions for the project.

ANS:  T

	Feedback
Correct	The key assumptions include those in the base for the project justification and rationale, and include assumptions about resources for the project.
Incorrect	The key assumptions include those in the base for the project justification and rationale, and include assumptions about resources for the project.

PTS:   1                    DIF:    E                   

OBJ:   3. Identify and describe at least eight elements of a project charter  

KEY:  Knowledge

   21.   The constraints for a project include the requirement to outsource due to the organization's lack of having expertise with its own staff.

ANS:  T

	Feedback
Correct	The project's constraints describe requirements or limitations for the project.
Incorrect	The project's constraints describe requirements or limitations for the project.

PTS:   1                    DIF:    E                   

OBJ:   3. Identify and describe at least eight elements of a project charter  

KEY:  Knowledge

   22.   The project charter should include as many risks as can be brainstormed to be sure to have enough funds for contingencies.

ANS:  F

	Feedback
Correct	The project charter should identify major risks, which include any risk that the sponsor thinks has a high likelihood of occurrence or a high degree of potential impact.
Incorrect	The project charter should identify major risks, which include any risk that the sponsor thinks has a high likelihood of occurrence or a high degree of potential impact.

PTS:   1                    DIF:    E                   

OBJ:   3. Identify and describe at least eight elements of a project charter  

KEY:  Knowledge

   23.   Project approval requirements state when the sponsor wants to review the progress of the project and make decisions about moving to the next phase.

ANS:  T

	Feedback
Correct	The approval requirements define the limits of authority of the project manager.
Incorrect	The approval requirements define the limits of authority of the project manager.

PTS:   1                    DIF:    E                   

OBJ:   3. Identify and describe at least eight elements of a project charter  

KEY:  Knowledge

   24.   If the project manager is selected in the initiating phase of the project, then the project manager is likely to participate in the development of the project charter for the project.

ANS:  T

	Feedback
Correct	The project manager section of a project charter identifies the person from the organization that is assigned as the project manager. This person may prepare the project charter if selected early enough in the project life cycle.
Incorrect	The project manager section of a project charter identifies the person from the organization that is assigned as the project manager. This person may prepare the project charter if selected early enough in the project life cycle.

PTS:   1                    DIF:    E                   

OBJ:   3. Identify and describe at least eight elements of a project charter  

KEY:  Knowledge

   25.   A project should have weekly project status review meetings supplemented with written project reports.

ANS:  F

	Feedback
Correct	The project's reporting requirements state the frequency and content of project status reviews and reports. The frequency should be often enough for the sponsor to approve the deliverables and for the project team to reduce problems due to project delays. This may be daily, weekly, or even monthly and is dependent upon the project.
Incorrect	The project's reporting requirements state the frequency and content of project status reviews and reports. The frequency should be often enough for the sponsor to approve the deliverables and for the project team to reduce problems due to project delays. This may be daily, weekly, or even monthly and is dependent upon the project.

PTS:   1                    DIF:    E                   

OBJ:   3. Identify and describe at least eight elements of a project charter  

KEY:  Knowledge

   26.   The sponsor designee is the project manager of the project.

ANS:  F

	Feedback
Correct	The sponsor designee is the individual who the sponsor designates to act on behalf of the project sponsor and the project manager is accountable to this person.
Incorrect	The sponsor designee is the individual who the sponsor designates to act on behalf of the project sponsor and the project manager is accountable to this person.

PTS:   1                    DIF:    E                   

OBJ:   3. Identify and describe at least eight elements of a project charter  

KEY:  Knowledge

   27.   The approval date for the project is the project start date.

ANS:  T

	Feedback
Correct	The approval signature and date in the project charter indicate that the sponsor has officially or formally authorized the project and the date is considered to be when the clock starts ticking for accomplishing the key milestones for the project.
Incorrect	The approval signature and date in the project charter indicate that the sponsor has officially or formally authorized the project and the date is considered to be when the clock starts ticking for accomplishing the key milestones for the project.

PTS:   1                    DIF:    E                   

OBJ:   3. Identify and describe at least eight elements of a project charter  

KEY:  Knowledge

   28.   All projects require a project charter to start the project.

ANS:  F

	Feedback
Correct	Projects that are informal or done in response to an unexpected event may not be appropriate for a project charter.
Incorrect	Projects that are informal or done in response to an unexpected event may not be appropriate for a project charter.

PTS:   1                    DIF:    E                    OBJ:   4. Prepare a project charter

KEY:  Knowledge

   29.   A request for proposal is required for projects that are completed by an external contractor to an organization.

ANS:  F

	Feedback
Correct	Projects that are informal or done in response to an unexpected event may not be appropriate to have a request for proposal.
Incorrect	Projects that are informal or done in response to an unexpected event may not be appropriate to have a request for proposal.

PTS:   1                    DIF:    E                    OBJ:   5. Prepare a request for proposal

KEY:  Knowledge

   30.   Part of preparing a request for proposal is soliciting the request to potential bidders on the project.

ANS:  T

	Feedback
Correct	Organizations may have a list of potential bidders or may advertise in selected newspapers or websites.
Incorrect	Organizations may have a list of potential bidders or may advertise in selected newspapers or websites.

PTS:   1                    DIF:    E                    OBJ:   5. Prepare a request for proposal

KEY:  Knowledge

   31.   A request for proposals helps the organization decide which contractor to use.

ANS:  T

	Feedback
Correct	A request for proposals helps the organization decide which contractor to use.
Incorrect	A request for proposals helps the organization decide which contractor to use.

PTS:   1                    DIF:    E                    OBJ:   5. Prepare a request for proposal

KEY:  Knowledge

   32.   The purpose of preparing a request for proposal is to state, comprehensively and in detail, what is required, from the contractor's point of view, to address the identified need.

ANS:  F

	Feedback
Correct	The purpose of preparing a request for proposal is to state, comprehensively and in detail, what is required, from the customer’s point of view, to address the identified need.
Incorrect	The purpose of preparing a request for proposal is to state, comprehensively and in detail, what is required, from the customer’s point of view, to address the identified need.

PTS:   1                    DIF:    E                    OBJ:   5. Prepare a request for proposal

KEY:  Knowledge

   33.   A good RFP allows contractors or a project team to understand what the customer expects.

ANS:  T

	Feedback
Correct	A good RFP allows contractors or a project team to understand what the customer expects.
Incorrect	A good RFP allows contractors or a project team to understand what the customer expects.

PTS:   1                    DIF:    E                    OBJ:   5. Prepare a request for proposal

KEY:  Knowledge

 CHAPTER 2: Identifying and Selecting Projects

Chapter Concepts. 2

Learning Outcomes. 2

Project Management Knowledge Areas from PMBOK® Guide

Teaching Strategies. 2

Lecture Notes. 3

1. Real-World Project Management Examples. 3

Vignette A: King County and Phoenix Schools Prioritized Safe Routes to School 3

Vignette B: Spokane Builder and Others Propose Methow Project 3

2. Project Identification. 4

3. Project Selection. 4

4. Project Charter 5

5. Preparing a Request for Proposal 6

6. Soliciting Proposals. 7

7. Critical Success Factors. 8

8. Summary. 8

Questions. 9

Internet Exercises. 10

Case Study # 1 A Midsize Pharmaceutical Company. 10

Answers to Case Questions. 11

Group Activity. 11

Case Study # 2 Transportation Improvements. 11

Answers to Case Questions. 11

Group Activity. 12

Optional Supplemental Activities. 12

Chapter Concepts

This chapter discusses the initiating phase of the project life cycle. Based upon this chapter, students will become familiar with:

·        How projects are identified and selected

·        A project charter

·        How to outsource projects using a request for proposal

·        The proposal solicitation process

Learning Outcomes

After studying this chapter, the learner should be able to:

1.      Discuss how projects are identified

2.      Explain how projects are prioritized and selected

3.      Identify and describe at least eight elements of a project charter

4.      Prepare a project charter

5.      Prepare a request for proposal

Project Management Knowledge Areas from PMBOK® Guide

Concepts in this chapter support the following Project Management Knowledge Areas of

A Guide to the Project Management Body of Knowledge (PMBOK® Guide):

Project Integration Management

Project Procurement Management

Teaching Strategies

1.      The first vignette reinforces the need for a systematic approach to identify the project's needs and to evaluate data collected from sites. Project identification is the start of the project life cycle. Have students describe systematic processes they use for evaluation.

2.      The second vignette reinforces that the need, problem, or opportunity for a project may not always have a formal RFP developed to request proposals. Proposals are sometimes sent unsolicited. The sponsor needs to have evaluation criteria for evaluation of the proposal just as would be developed in the RFP. Have students describe when they have suggested a solution for a problem and how the organization or person evaluated their suggestions.

3.      Have the students read the case studies in class and answer the questions in groups of three or four. Next, select five participants to act out the group activity. This is an excellent way to stimulate class discussion and interest. This is a good case study to do right before you lecture on this chapter and then again after you lecture on the chapter. The difference in responses “before” and “after” will reinforce the topics covered.

4.      Ask your students whether they have ever seen an RFP or written an RFP.

5.      Ask your students to identify situations in the real world that would require an RFP. Ask them to describe in detail what the RFP might look like.

Lecture Notes

1. Real-World Project Management Examples

Vignette A: King County and Phoenix Schools Prioritized Safe Routes to School

The National Center for Safe Routes to School, a clearinghouse for the Federal Highway Administration’s Safe Routes to School Program, developed a three-step project identification process to determine the highest-priority locations and countermeasures for Safe Routes to School projects.

·        First step - prioritize schools that could benefit from the projects

o   Highest priority to schools with history of child pedestrian-related crashes

o   Other factors were public and school officials' concerns for safety and routes to school

·        Other considerations project identification were traffic volume, travel speed, existing infrastructure, and road crossings, geography, socioeconomic distribution, and costs of implementations

·        Funded less expensive countermeasures to have as greatest benefit to the most number of students and schools

·        Two schools identified

o   King County, Washington - used a worksheet to gather information in a systematic and consistent manner

o   Phoenix, Arizona - tested prioritization tool and schools do annual reports for needs

·        Use same metrics to have side-by-side comparison to show the greatest need

A systematic approach to project identification is the start of the project life cycle, with the recognition of the need, problem, or opportunity and the identification of a project or projects to solve a problem or address an expressed need. This systematic approach has been very effective when used to evaluate, prioritize, and select projects that are completed by internal teams and by contractors.

Vignette B: Spokane Builder and Others Propose Methow Project

In Spokane, Washington, affordable housing is a problem for some employees of the local businesses. To have an affordable house, they have to make a long commute to work in the Methow Valley. To help address this problem, a development company is proposing to develop and construct a $10 million to $12 million affordable housing project on a seven-acre parcel two blocks from the business district.

·        Recognition of a problem that needs to be solved in initiating phase of project

·        Problem identification by those affected and data gathering in market survey

·        Evaluation criteria are being developed to prioritize and select the project

·        Some projects do not have an RFP, yet they still require evaluation criteria for the proposals submitted; no RFP was created in this case

2. Project Identification

·        The initiating phase of the project life cycle starts with recognizing a need, problem, or opportunity for which a project or projects will be identified to address the need.

·        Identified in various ways:

o    during an organization’s strategic planning, as part of its normal business operations,

o   in response to unexpected events,

o   or as a result of a group of individuals deciding to organize a project to address a particular need

·        It is important to clearly define the need. This may require gathering data about the need or opportunity to help determine whether it is worth pursuing.

·        Sometimes organizations identify several or many needs but have limited funds and people available to address all those needs. In such cases, the company must go through a decision-making process to prioritize and select those projects that will result in the greatest overall benefit.

3. Project Selection

·        Project selection involves evaluating various needs or opportunities, and then deciding which of those should move forward as projects to be implemented.

·        The benefits and consequences, advantages and disadvantages, plusses and minuses of each opportunity need to be considered and evaluated. These factors can be quantitative and qualitative, tangible and intangible. Each person's decision will be a combination of quantitative evaluation and "gut" feelings based upon experience.

·        The steps in project selection are to:

o   Develop a set of criteria against which the opportunity will be evaluated. For example:

§  Alignment with company goals

§  Anticipated sales volume

§  Increase in market share

§  Establishment of new markets

§  Anticipated retail price

§  Investment required

§  Estimated manufacturing cost per unit

§  Technology development required

§  Return on investment

§  Human resources impact

§  Public reaction

§  Competitors’ reaction

§  Expected time frame

§  Regulatory approval

§  Risks

o   List assumptions that will be used as the basis for each opportunity.

§  For example, if one opportunity is to build an on-site day care center for children and elderly relatives of company employees, one assumption might be that the company would be able to obtain a bank loan to build such a center.

o   Gather data and information for each opportunity to help ensure an intelligent decision regarding project selection.

§  For example, it may be necessary to gather some preliminary financial estimates associated with each opportunity, such as estimated revenue projections and implementation and operating costs.

§  In addition to gathering hard data, it may also be necessary to obtain other information such as responses from various stakeholders who would be affected by the opportunity.

o   Evaluate each opportunity against the criteria.

§   Once all the data and information has been collected, analyzed, and summarized for each opportunity, it should be given to all the individuals who are responsible for performing the evaluation. It is beneficial to have several individuals participating in the evaluation and selection decision in order to get various viewpoints.

·        Figure 2.1 depicts a project evaluation and selection form to evaluate three possible projects. Have students describe the positive and negatives of possible scenarios for a development project.

4. Project Charter

·        Once a project has been selected, it is formally authorized using a project charter, sometimes called a project authorization or project initiation document.

o   Provides sponsor approval to go forward with the project and commits the funding for the project

o   Summarizes the key conditions and parameters for the project and establishes the framework for developing a detailed baseline plan for performing the project

o   Includes many of the following elements

§  Project title

§  Purpose

§  Description

§  Objective

§  Success criteria or expected benefits

§  Funding

§  Major deliverables

§  Acceptance criteria

§  Milestone schedule

§  Key assumptions

§  Constraints

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