Market-OrientedStrategic Planning
Marketing Management
How important is Planning??
How important are you in Strategic Planning?
- The marketing manager is the most significant functional contributor to the strategic planning. He/she has a leadership role in:- Defining the business mission- Environment Analysis- Competitive and business situations- Developing objectives, goals, and strategies- Defining the product, market, distribution,
and quality plans
Market-Oriented Strategic Planning
Stakeholders
Resources
Processes
Organization
Set strategies to satisfy key stakeholders
…by improving business processes…and aligningResources and organization
Market-Oriented Strategic Planning
Stakeholders –define stakeholders and their needs.› Stockholders – increase in stock prices› Employees – job security› Suppliers – maintain/increase order volume› Distributors – marketing programs› Customers – high-quality products and
services
Market-Oriented Strategic Planning
Processes – you satisfy the needs of your stakeholders by improving business processes
Resources and Organization – to carry out process improvements, you a company needs resources and a flexible organization
Market-Oriented Strategic Planning
Stockholder Satisfaction
Customer Satisfaction
Higher-quality Products and services
Higher-quality Environment
(employee satisfaction)
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Dynamic Relationships among Stakeholder Groups in a High Performance Business
Market-Oriented Strategic Planning
- A managerial process of developing and maintaining a viable fit between the organization’s objectives, skills, and resources, and its changing market opportunities to yield target profit and growth.
Market-Oriented Strategic Planning
Strategic Planning, Implementation, and Control Process
Corporate Planning
Division Planning
Business Planning
Product Planning
Organizing
Implementing
Measuring Results
Diagnosing Results
Taking Corrective
Action
Planning
Implementing
Control
Strategic Planning, Implementation, and Control Process
Corporate Planning- prepare mission statement,
policies, strategies, goals, and frameworkthat will be the basis of plans of all business units.
I. Corporate Planning Define Corporate Mission Establish Strategic Business Units Assign Resources to SBU’s Plan New Businesses
Define Corporate Mission- Fundamental Questions
1. What is our business?2. Who is our customer?3. What is the value to the customer?4. What will our business be?5. What should our business be?
Define Corporate MissionElements of Company Mission1. History – history of aims, policies, and
achievements2. Current Preferences – business direction3. Market Environment – external
influences to the business4. Resources – corporate capabilities5. Distinctive Competencies – Competitive
Advantages
Define Corporate MissionSignificance: Provides employees with a shared
sense of purpose Acts as the “invisible hand” that guides
employees to work independently towards a common goal
Embody what the company is all about
Define Corporate MissionConsider:1. Define major competitive scopes:
- Industry scope – what industry you want to belong to- Products and Applications scope – range of products
the company will participate in- Competencies Scope – range of competencies the
company will master and leverage- Market-Segment Scope – Type of market the company
will serve- Vertical Scope – number of channel levels the company
will engage- Geographical Scope – range of regions, countries or
country groups the company will operate in
Define Corporate MissionShould be:1. Motivating2. Guided by a Vision3. Stress major policies4. Provide direction for the company in
the next five to ten years
Business Definitions- Defining what you are as a business
Dimensions:› Customer groups› Customer needs› Technology
COMPANY PRODUCT DEFINITION
Revlon We Make Cosmetics We Sell HopeXerox We Make Copying Equipment We help improve Office
ProductivityColumbia Pictures We make movies We sell entertainmentCarrier We make air-conditioners We provide climate control in the
home
Assigning Resources to SBUs
Companies define Strategic Business Units for appropriate funding
HQ will then decide which SBU will › Build – increase market share› Maintain – preserve market share› Harvest – increase short term cash flow› Divest – sell or liquidate business
Assigning Resources to SBUs
Boston Consulting Group’s Growth Share Matrix Cash cows - is where a company has high market share in a slow-
growing industry. These units typically generate cash in excess of the amount of cash needed to maintain the business. They are regarded as staid and boring, in a "mature" market, yet corporations value owning them due to their cash generating qualities.
Stars - are units with a high market share in a fast-growing industry. They are graduated question marks with a market or niche leading trajectory. The hope is that stars become next cash cows.
Dogs - units with low market share in a mature, slow-growing industry. These units typically "break even", generating barely enough cash to maintain the business's market share.
Question marks - (also known as problem children) are business operating in a high market growth, but having a low market share. They are a starting point for most businesses. Question marks have a potential to gain market share and become stars, and eventually cash cows when market growth slows.
Assigning Resources to SBUs
Boston Consulting Group’s Growth Share Matrix
Planning New Business- Existing SBUs will project sales- HQ will have target sales for the year- Divested businesses will result to a
sales gap which will need replacement- New businesses will fill the gap of
divested businesses
Planning New Businesses
0 5 10 150123456789
10
Desired Sales
Strat Plan Gap
Projected Sales
Planning New Businesses Companies can fill the gap in 3 ways:
1. INTENSIVE GROWTH: Identify opportunities to achieve growth within the company’s current businesses
2. INTEGRATIVE GROWTH: Identify opportunities to build or acquire businesses that are related to the company’s current businesses
3. DIVERSIFICATION GROWTH: Identify opportunities to add attractive businesses that are unrelated to current businesses.
New Business Strategies INTENSIVE GROWTH OPPORTUNITIES
› Market Penetration Strategy – increase the market share of its current portfolio in their current markets
› Market Development Strategy – look for new markets whose need might be met by its current products
› Product Development Strategy – new product posibilities
New Business Strategies INTEGRATIVE GROWTH Backward
Integration – acquiring suppliers or service providers› Forward Integration – acquiring distributors› Horizontal Integration – acquiring
competitors
New Business Strategies DIVERSIFICATION GROWTH
› Concentric Diversification – new products that have technological marketing synergies with existing product line
› Horizontal Diversification – new products that might appeal to existing customers
› Conglomerate Diversification – no relationship with products or customers
II. Business Strategic Planning
Business Mission
External Environment Analysis
Internal Environment Analysis
Goal Formulation
Strategy Formulation
Tactics/Program Formulation
Implementation
Feedback and Control
Business Mission Define Specific Mission of the Business
within the broader company mission› More specific scopes
Product applications Competencies Market segments Vertical positioning geography
Internal Analysis Strength and Weakness Analysis
› Asses which business activities your business unit is very good at and very bad at on the department level
› Examine resource utilization› Define needed process improvements› Must be done periodically by management
External Analysis Opportunities and Threats Analysis
› Made up of the actors and forces that affect the company’s ability to develop and maintain successful transactions and relationships with its target customers
Macro and Micro Environment Forces
External Analysis Purpose:
› Look for Market Opportunities – an area of need which a company can perform profitably
› Look for developments in the environment that may pose as a threat to your operations Market Threat – is a challenge posed by an unfavourable trend that would lead to a decrease in sales in the absence of marketing action
Goal FormulationGoals are specific objectives set by management for the planning periodS - M -A - R - T -
Goal FormulationGoals are specific objectives set by management as to what they want to happen to the company for the period
S - pecificM - easurableA - ttainableR - eallisticT - imebound
Goal FormulationPurpose is to set objectives for:
› Profitability› Sales growth› Market share improvement› reputation
Strategy Formulation- Goals indicate where they want the
business to go, Strategies are ways how to get there- Types of Strategies
- Overall Cost Leadership – focus is to lower costs in critical business processes
- Differentiation – achieve superior performance in a benefit valued by customers
- Focus – focuses on narrow market segments rather than going for the larger markets
Program FormulationPrograms or Tactics are detailed specific activities based on set Strategies for the Goals.
› Purpose: Set activities that support the strategies Set programs that ensure the goals that
were formulated by the management will be met
Goal, Strategy, and Program Formulation
Be one of the Major Players in the Industry
Increase Market Presence Expenditure
by 5%
Increase Market Share by 10%
Invest in Advertising
Launch New
Product
Increase Sales
Image Model
Prime Time Ads
Improve portfolio
Corporate Mission
Marketing Objectives Marketing
Strategy
Marketing Program
Implementation Implementation of set plans according
to a Business Calendar – set schedules of activities according to priority and feasibility› Calendar must be followed strictly not to
hamper attainment of set goals
Feedback Control During implementation, management
should monitor activities and new developments in the environment.› Purpose:
Track if Business Calendar is being followed Check for process improvements when
developments in the environment arise.
Questions?