MKTG Week #2:1. Strategic Planning for Competitive Advantage: Chapter 2a. Strategic Business Units (SBU’s)i. Large companies may manage a number of very different businesses called, SBUs. 1. SBU’s have the following Characteristics:a. Distinct Mission and specific target marketb. Control of its own resourcesc. Own competitorsd. Single/Collection of businessese. Plans independently from other SBUs. b. Ansoff’s Opportunity Matrixi. Market Penetration1. Increase market share among existing customersii. Market Development1. Attract new customers to existing productsiii. Production Development1. Creation of new products for present marketsiv. Diversification 1. Strategy of increasing sales by introducing new products into new markets. c. Boston Consulting Group Modeli. Portfolio Matrix: classifies each SBU by its present or forecast growth and market share.1. Stars: fast: growing market leadera. Star SBU’s usually have large profits but need a lot of cash to finance rapid growth.2. Cash Cows: An SBU (strategic business units) that generates more cash than it needs to maintain its market share.a. In a low-growth market, but the product has a dominant market share. b. Used to support with cash, all other SBU’s except Dogs.i. Usually Support two other SBU’s3. Problem Children (?): shows rapid growth but poor profit margins.a. Has a low market share in a high-growth industry4. Dogs: Low growth potential and a small market share. a. Most eventually leave the marketplace. ii. Four Basic Strategies1. Build: Firm may decide to use financial resources to achieve goals.a. Problem Children2. Hold: If the SBU is successful the goal is the too maintain the market share so the firm can take advantage of the cash flowa. Cash Cow3. Harvest: Increase short-term cash return without too much concern for the long-run impact. a. Especially worth while when more cash isneeded from a cash cow with long-run prospects that are unfavorable because oflow market growth rateb. All SBU’s except Stars4. Divest: Getting rid of SBU’s with low shares of low-growth markets is often appropriate.a. Problem Children, Dogsd. Marketing Plani. Mission Statement: answers the question, “What business are we in?”ii. Situation or SWOT analysis1. A firm should identify its:a. Internal Use onlyi. Strengthsii. Weaknessesb. External Usei. Opportunities ii. Threatsiii. Objectivesiv. Target Marketing Strategy 1. Marketing Mix (4 P’s)a. Product: Brand Ingredients, size, shape, color, container, labelb. Place(Distribution): Logistics, warehouse,trucks, forklifts, stores, locationsc. Promotion: ADV, TV, Radio, sponsorships,coupons, rebates, special sales/eventsd. Price: Costs, Profits, Allowances, discounts, cash terms, shelf pricev. Implementation Evaluation Control e. Cost Competitive Advantagei. Experience Curveii. Efficient Laboriii. No-Frills Goods and Services1. No extras, bare minimumiv. Government Subsidiesv. Product Designsvi. Reengineeringvii. Production Innovationsviii. New Methods of Service Delivery f. Product/Service Differentiation Competitive Advantagei. Exists when a firm provides something that is unique and valuable to buyers beyond offering a low price g. Niche Competitive Advantagei. Seeks to target and effectively serve a single segment of the market. h. Building Sustainable Competitive Advantagei. One that cannot be copied by the competitioni. Setting Marketing Plan Objectivesi. Statement of what is to be accomplished through marketing activities.ii. Stated objectives should be:1. Realistic2. Measurable3. Time Specific4. Name Specific5. Dollar Specific6. Compared to a Benchmarkj. Target Marketi. Marketing Opportunity Analysis (MOA)1. Description and estimation of the size and sales potential of market segments that are of interest to the firm and the assessment of key competitors in these market