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Company and Marketing Strategy
Chapter: 2
Companywide Strategic Planning
• Strategic Planning
The process of developing and maintaining a strategic fit between organization’s goal and capabilities and its changing marketing opportunities
- Sets stage for the rest of company’s planning
1) Annual Plans
2) Strategic Plans
Steps in Strategic Planning
Setting company objectives and goals
Defining the company’s mission
Designing the business portfolio
Planning marketing and other functional strategies
Business unit, product, and market levelCorporate
Level
Defining a Market-Oriented Mission
• Mission Statement
A statement of the organization’s purpose- what it wants to accomplish in the larger environment
- acts as an invisible hand
- Market oriented mission statement
- Meaningful, specific, yet motivating
- Mission should not state profits
Market Oriented Business Definitions
Company Market- Oriented
DefinitionWal- Mart “Save money, live better”
Life Insurance Corporation of India “Zindagi e saath bhi, zindagi ke baad bhi”
Google We help you organize the world’s information and make it universally accessible and useful
Nokia Connect people
Setting Company Objectives and Goals
• Turn mission into objectives
• How will you go about things
Designing the business portfolio
• Business Portfolio
The collection of businesses and products that make up the company
- Should be a best fit to company’s strengths and weaknesses to opportunities
Step: 1- Analyzing the current business portfolio
Step: 2- Future Portfolio
Analyzing the Current Business Portfolio
• The process by which management evaluates the products and businesses that make up the company
- identify the SBU’s
• Growth Share Matrix
A Portfolio- planning method that evaluates a company's strategic business units in terms of its market growth rate and relative market share. SBUs are classified as stars, cash cows, question marks, or dogs
BCG Growth Share Matrix
Cash Cow Dog
Star Question Mark
Relative market Share
Mar
ket
grow
th r
ate
High Low
Hig
hLo
w
BCG Growth Share Matrix Contd.
• Stars:
- High growth, High share
- Heavy Investment required to sustain share
- Will eventually turn in cash cows
• Cash Cows
- Low Growth, High Share
- Less investment
- a lot of cash produced
BCG Growth Share Matrix Contd.
• Question Marks
- Low share, High Growth
- A lot of investment to hold share
- Which too keep and which to let go
• Dogs
- Low Growth, Low share
- no large sources of cash
Problems with Matrix
• Difficult, time consuming and costly
• No advice on future
Developing strategies for growth and downsizing
• Identify, evaluate and select market opportunities and lay down strategies for capturing them
• Product/market expansion grid
A portfolio- planning tool for identifying company growth opportunities through market penetration, market development, product development, or diversification
The Product/Market Expansion Grid
Market
Penetration
Market
Development Diversification
Product
Development
Existing Products
New Products
Existing Markets
New Markets
The Product/Market Expansion Grid
• Market Penetration A Strategy for company growth by increasing
sales of current products to current market segments without changing the product
• Market Development A Strategy for company growth by identifying
and developing new market segments for current company products
The Product/Market Expansion Grid
• Product Development A strategy for company growth by offering
modified or new products to current market segments
• Diversification A strategy for company growth through starting
up or acquiring business outside the company's current products and markets
• Downsizing
Reducing the business portfolio by eliminating products of business units that are not profitable or that no longer fit the company's overall strategy
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