Chapter 2 Nature of Strategic Planning Strategic Planning managerial process of creating and maintaining a fit between the organization s objective and resources and evolving market opportunities Goal is long run profitability and growth Strategic Business Units Large companies may manage a number of very different businesses Distinct mission and specific target market Control over its resources Its own competitors Single business or collection of related business Plans independent of other SBUs in total organization Strategic Alternatives Ansoff s Opportunity Matrix o Market Penetration try and increase market share among existing customers Ex Using cream cheese on more than just bagels o Market Development attracting new customers to existing products New uses for old products stimulate more sales McDonald s opening in China Russia Japan o Product Development Strategy entails the creation of new products for present markets rely on target audience McDonalds introduce yogurt parfaits salads and fruits o Diversification A strategy of increasing sales by introducing new products into new markets Can be risky Boston Consulting Group Model o Portfolio Matrix Classifies each SBU by its present or forecast growth and market share Star a business unit that is fast growing market leader Cash Cow business unit that generates more cash than it needs to maintain its market share Problem Child business unit that shows rapid growth but Dog business unit that has low growth potential and small poor profit margins market share o After classifying the company s SBU must create strategy Build if it has Star potential organization may decide to give up short term profits and use financial resource to achieve this goal Hold if SBU is successful cash cow preserve market share so that organization can take advantage of positive cash flow Harvest Appropriate for all SBU s except stars increase short term cash return without too much concern for long run impact Divest Getting rid of SBUs with low shares of low growth markets General Electric Model Best candidate for investments where they are in the Market Attractiveness and Business Position Marketing Plan Planning Market Planning Marketing Plan o Business Mission Statement SWOT analysis Objectives Marketing Strategy Price Product Promotion Distribution implementation evaluation control Defining Business Mission Answers Question What Business Are We In Focuses on Market rather than Good or Service o Marketing Myopia business in terms of goods and service SBUs may also have a mission statement Conducing Business Analysis SWOT Analysis o Strengths things company does well o Weaknesses things company doesn t do well o Opportunities Conditions in external environment for strengths o Threats Conditions in external environment that do not favor strength or areas of weaknesses Environmental Scanning collection and interpretation of forces events and relationships in environment o 6 forces social demographic economic technological political and legal and competitive Competitive Advantage Cost o Obtain inexpensive raw materials o Create efficient scale of plant operations o Design products for ease of manufacture o Control overhead costs o Avoid marginal customers Product Service o Brand names o Strong dealer network o Product reliability o Image o Service Niche Competitive Advantage used by small firms to target and effectively serve segment of market Setting Marketing Plan Objectives Marketing objective a statement of what is to be accomplished through marketing activities o Realistic develop objectives that can be met o Measurable need to be able to quantitavely measure whether or not an objective I met o Time Specific what time should the objective be met o Compared to a benchmark Marketing Mix 4 Ps Product Place Promotion Pricing Product Strategies physical unit package warranty service brand Place making products available when and where customers want them storing and transporting raw materials Promotion Strategies advertising public relations sales promotion and image value personal selling Pricing Strategies what a buyer must give up in order to obtain a product the most flexible Following Up on Marketing Plan Implementation process that turns marketing plan into action assignments Evaluation and Control evaluation entails gauging the extent to which marketing objectives have been achieved during specific time period Control provides the mechanism for evaluating marketing results
View Full Document
Unlocking...