The nature of strategic planning
Strategic planning is the managerial process of creating and maintaining a fit between the organization’s objective and recourses and the evolving market opportunities. The goal of strategic planning is long-run profitability and growth.
Strategic business units=subsidiary. Eg. Coca Cola (parent company) and Zico.
There are 3 most common strategic alternatives:
1. Ansoff’s opportunity matrix- matches product with markets a. Market penetration: would try to increase market share among customers. Eg. Coca Cola steels Pepsi customers. b. Market development: attracting new customers to existing product. Eg. Convince people who do not drink coca to consume Coca Cola. c. Product development: creating new product to the existing customers. Eg. Diet Cola d. Diversification: introducing new product to the new market. 2. The Boston Consulting Group Model
e. Question mark is low rapid growth with poor profit margin. This is the first time the SBU enter the market. Thus, there are a lot of uncertainty. f. Star is the market leader and growing fast. The best marketing tactic is to protect existing market share by reinvesting earning in product improvement, better distribution, more promotion, and production efficiency. Management should capture the new users as they enter the market. g. Cash cow is generate more cash than it needs to maintains its market shares. Low growth market, but the product dominant market share. Cash cow is the leader of its categories. h. Dog is low growth potential and small market shares. Most dogs eventually will leave the marketplace. Business Mission Statement
Mission statement- a statement of the firms business based on a careful analysis of benefits sought by present and potential customers and an analysis of existing and anticipated environment conditions. Mission statement is a blue print and guide fo the organization (internal). Too narrow- marketing myopia. Marketing myopia is defining business in terns of goods and services rather than in terms of the benefits that customers seeks. Too broad- no direction.
Just right- focus on markets served and benefits customers seek.
Conducting a situation analysis.
a. Current: Strengths and Weakness- for internal (organization has control over). b. Potential environment: Opportunities and Threats (external).
Competitive advantage- the set of unique features of a company and its products that is perceived by the target markets as significant and superior to the competition. a. Cost advantage is low cost competitor in industry while maintaining satisfactory profit margin. a. Experience curves
b. Efficient labor
c. No-frills goods and services
d. Government subsidies
e. Product design
g. Product innovations
h. New methods of service delivery
b. Product/service differentiation advantage- beyond price (reliability or luxury brand). Exists when a firm provides something unique that is valuable to buyers beyond simply offering low price. c. Niche advantage- the advantage achieved when a firm seeks to target and effectively serve a small segment of the market. d. Sustainable competitive advantage- cannot be copied or at least extremely difficult.
Marketing plan objectives
A marketing objectives is a statements of what is to be accomplished through marketing activities. a. Realistic.
d. Compared to a benchmark- comparing something current period result to the previous period or the competitor. The target market
Marketing strategy is the activities of selecting and describing one or more target markets and developing and maintaining a marketing mix that will produce mutually satisfying exchanges with target markets. Start with MOA (Marketing...