Market-Oriented Strategic Planning

Objectives Resources

Skills

Opportunities

Market-Oriented Strategic Planning

Objectives Resources

Profit and Growth

Skills Opportunities

Corporate & Division Strategic Planning

Define the corporate mission Establish strategic business units (SBUs) Assign resources to SBUs Plan new business, downsize older businesses

Strategic-Planning, Implementation, and Control Process

Planning
Corporate planning Division planning Business planning Product planning

Implementation
Organizing

Control
Measuring results

Diagnosing results Implementing

Taking corrective action

Good Mission Statements:

Limited number of goals Stress major policies & values Define competitive scopes

The Boston Consulting Groups Growth-Share Matrix

Market Growth Rate
20%18%16%14%12%10%8%6%4%2%0
10x

Stars

Question marks

5
Cash cow

?2
7

Dogs

8 6
4x 2x 1.5x 1x .5x .4x .3x .2x .1x

Relative Market Share

Market Attractiveness: CompetitivePosition Portfolio Classification

MARKET ATTRACTIVENESS Low Medium High Strong
5.00 5.00 Hydraulic pumps 3.67 Clutches Flexible diaphragms Fuel pumps Relief valve 1.00 Invest/grow Selectivity/earnings Harvest/divest

BUSINESS STRENGTH Medium

3.67 Joints

2.33

Weak

1.00

Aerospace fittings

2.33

The Strategic-Planning Gap

Desired sales Diversification growth Integrative growth Intensive growth Current portfolio

Sales

Strategicplanning gap

5 Time (years)

10

Three Intensive Growth Strategies: Ansoffs Product/Market Expansion Grid

Existing products New products

Existing markets

1. Market penetration

3. Product development

New markets

2. Market development

4. Diversification

Business Strategic-Planning Process

Goal Formulation
External Environment (opportunity & threat) Analysis

Strategy Formulation

Business Mission

Program Formulation

Implementation Internal Environment (Strengths/ weaknesses) analysis)

Feedback and control

Opportunity Matrix
Success Probability
High Low

Attractiveness

High

Low

Threat Matrix
Probability of Occurrence
High Low

Seriousness

High

Low

The Value-Delivery Process

(a) Traditional physical process sequence

Make the product

Design Procure Make product

Sell the product

Price Sell Advertise/ Distribute Service promote

(b) Value creation & delivery sequence

Choose the Value Provide the Value Communicate the Value

Strategic marketing

Tactical marketing

Factors Influencing Company Marketing Marketing Strategy

intermediaries

Demographic/ economic environment

Product

Technical/ physical environment

Suppliers

Place

Target Price customers

Publics

Promotion

Political/ legal environment

Social/ cultural environment

Competitors

The Marketing Plan

Executive Summary & Table of Contents Current Marketing Situation Opportunity & Issue Analysis Objectives Marketing Strategy Action Programs Projected Profit-and-loss Controls

KOTLER on Marketing
It is more important to do what is strategically right than what is immediately profitable.