Market-Oriented Strategic Planning “ “ The company without a strategy is willing to try anything.” The company without a strategy is willing to try anything.” Michael Porter Michael Porter “ “ If you know the enemy and know yourself you need not If you know the enemy and know yourself you need not fear the results of a hundred battles. fear the results of a hundred battles. ” ” Sun Tzu Sun Tzu
Market-Oriented Strategic Planning. “ The company without a strategy is willing to try anything .” Michael Porter “ If you know the enemy and know yourself you need not fear the results of a hundred battles. ” Sun Tzu. Strategic Marketing Planning. - PowerPoint PPT Presentation
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Market-Oriented Strategic Planning
““The company without a strategy is willing to try The company without a strategy is willing to try anything.” anything.”
Michael PorterMichael Porter
““If you know the enemy and know yourself you need If you know the enemy and know yourself you need not fear the results of a hundred battles.not fear the results of a hundred battles.””
Sun TzuSun Tzu
Strategic Marketing Planning
Companies should look ahead and develop long-term strategies ğ to meet changing conditions in their industries and ensure long-term survival
The task of selecting an overall company strategy for long-run survival and growth ğ “strategic planning”
Marketing’s key role in strategic planning
Strategic Planning
Strategic Planning ğ Managerial process of developing and maintaining a match between the organization’s resources, goals and capabilities and the changing market opportunities.
The aim ğ to shape and reshape company’s businesses and products in order to reach to targeted profits and growth.
Top-management job Part of a broader process: strategic
management
Strategic Planning, Implementation, and Control Process
Measuringresults
Diagnosingresults
Takingcorrective
action
ImplementationImplementationPlanningPlanning
Corporateplanning
Divisionplanning
Businessplanning
Productplanning
Organizing
Implementing
ControlControl
Steps in Strategic Planning
Defining theCompanyMission
Defining theCompanyMission
Setting CompanyObjectivesand Goals
Setting CompanyObjectivesand Goals
Designingthe Business
Portfolio
Designingthe Business
Portfolio
Planning marketingand other functionalstrategies
Planning marketingand other functionalstrategies
C o r p o r a t e L e v e l Business unit, product, and market level
Corporate and Division Strategic Planning
All corporate headquarters undertake four planning activities:
1) Defining the corporate mission2) Establishing the strategic business units
(SBUs)3) Assigning resources to each SBU4) Planning new businesses, downsizing or
terminating older businesses.
Steps in Strategic Planning: Company Mission Statement
A mission statement ğ a statement of the organization’s purpose --- what it wants to accomplish in the larger environment
A clear mission statement ğ acts as “invisible hand” that guides employees to work toward realizing the organization’s goals.
Company Mission
Fundamental questions: What is our
business? Who is the
customer? What do
consumers value?
What should our business be?
A mission statement should be: Neither too narrow nor
too broad Fitting of market
environment Based on distinctive
competencies An “invisible hand” Motivating
Company Mission (cont.)
Limited number of goals
Stress major policies & values
Define competitive scopes
Company Mission (cont.)
“Market-oriented definitions” of a business ğ better than product or technological definitions
A market-oriented mission statement ğ defines the business in terms of satisfying basic customer needs (see examples)
Mission statement ğ to be guided by a “vision” - an almost “impossible dream” that provides a direction for the company for the next 10 to 20 years
Market OrientedMarket Oriented
RealisticRealistic
Fit Market EnvironmentFit Market Environment
Distinctive CompetenciesDistinctive Competencies
MotivatingMotivating
Specific
Company Mission
Characteristics of a Good Mission
Statement:
Characteristics of a Good Mission
Statement:
Company Product-Oriented Definition
Market-Oriented Definition
Amazon.com We sell books, videos, CDs, toys, consumer electronics and other products online
We make the Internet buying experience fast, easy, and enjoyable— we’re the place where you can find and discover anything you want to buy online
Disney We run theme parks We create fantasies—a place where dreams come true and America still works the way it’s supposed to
Nike We sell athletic shoes and apparel
We bring inspiration and innovation to every athlete* in the world (* if you have a body, you are an athlete)
Steps in Strategic Planning: Company Goals and Objectives
Company’s mission ğ needs to be turned into detailed, supporting objectives for each level of management
Mission ğ hierarchy of objectives As specific as possible Marketing strategies ğ must be developed
to support these marketing objectives
Hierarchy of Objectives
Mission Statement
Marketing Objective # 1
Marketing Objective # 2
Marketing Objective # 3
Marketing Strategy
Marketing Strategy
Steps in Strategic Planning: Business Portfolio
Business portfolio ğ collection of businesses and products that make up the company
1)Analyzing its current business portfolio and decide which business should receive more, less or no investment
2)Developing growth strategies to add new products/businesses to the current portfolio
Business Portfolio (cont.)
Portfolio Analysis ğ to identify and evaluate the various businesses that make up the company
To identify key businesses ğ Strategic Business Units (SBUs)
SBU: unit of the company (separate mission and objectives / can be planned independently from other company businesses)
To assess the attractiveness of its various SBUs and decide how much support each deserves
Product / Market Expansion Grid Market Penetration: making more sales to
current customers without changing its products.
Add new stores in current market areas, improve advertising, prices, service or store design.
Market Development: develop new markets for its current products
Identify new demographic or geographic markets. Product Development: offering modified or
new products to current markets. New styles, flavors, colors, or modified products.
Diversification: new products for new markets. Start up or buy new businesses.
Which strategy is this?
Market penetration
Market development
Product development
Diversification2 - 23
Steps in Strategic Planning: Functional Planning
The company’s overall strategic plan ğ establishes what kind of businesses the company will be in future & its objectives for each business.
More detailed planning must take place within each business unit
The major functional departments in each unit ğ must work together to accomplish strategic objectives
Marketing plays a key role
Provide a guiding
philosophy
Inputs to StrategicPlanners
Marketing’s Role in Strategic Planning
Marketing’s Key Role in Strategic Planning
Identify attractive opportu-
nities
Designeffective
strategies
Designeffective
strategies
Build strongvalue chains
Form superior
value delivery networks
Marketing’s Key Role:
Partner Relationship Management
Partner relationship management working closely with partners in other
departments (to form an effective “value chain” that serves the customer) &
partnering effectively with other companies in the marketing system for a superior “value delivery network” to jointly bring greater value to customers
The company needs to look beyond its own value chain in order to create customer value:
Value-delivery network ğ network made up of the company, suppliers, distributors, and customers who partner with each other to improve the performance of the entire sytem
Competition today takes place between the entire value delivery networks!
Statement ANALYSIS Objectives Strategy Program. tation Control
Internal Analysis
(Streng.&Weakness)
Business Unit Strategic Planning
Business Mission ğ each SBU needs to define its specific mission within the broader company mission
External Environment Analysis ğ to build a MIS to monitor:
Key external macroenvironment forces Significant microenvironment actors Trends and important developments ğ to
identify the associated opportunities and threats
Business Unit Strategic Planning
Internal Environment Analysis ğ Each business needs to evaluate its internal strengths and weaknesses periodically
“Checklist for Performing Strengths/Weaknesses Analysis”
Management or an outside consultant ğ reviews the business’s marketing, financial, manufacturing and organizational competencies and rates each factor as strength or weakness
SWOT ANALYSIS
Business Unit Strategic Planning /Example of a Checklist
ı PERFORMANCE IMPORTANCEMain 2nd Moderate 2nd Main High Medium Low