corporate starategic planning

7/27/2019 corporate starategic planning

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Corporate and Division Strategic Planning

Defining the corporate mission

Establish SBUs

Assigning resources to each SBUsAssessing growth opportunities


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Defining the Corporate Mission


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Mission Statement

The reason for companys existence and itsresponsibilities to stakeholders

The customer needs that are satisfied by the firmsproducts or services( areas of product and marketinvolvement)

The extent of specialization within each product-marketarea

Amount of product-market diversification desired by themanagement.

Management's performance expectation from thecompany

Other general guidelines for overall business strategy

( such as technologies to be used & role of R&D)


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3 major characteristics of a good mission

statement

Focus on limited number of goals Focus on major policies and values the company

wants to honor

Defines the competitive scopes in which the company

will operateIndustrial Scope

Products & Application Scope

Competence Scope

Market Segmentation Scope

Vertical Scope

Geographical Scope


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DHL

DHL will become the acknowledged global leader in the

express delivery of documents and packages. Leadership

will be achieved by establishing the industry standards ofexcellence for quality of service and by maintaining the

lowest cost position relative to our service commitment in

all markets of the world.

McDonalds UK mission Statement

To be the United Kingdoms number one favourite quick

service restaurant. The company will be led by the needs

of our customers and commitment to the welfare and

development of our staff. Mcdonalds will provide great

tasting food, backed by excellent operators and friendlyservice in a relaxed, safe and consistent restaurant

environment. Our customers will be serviced in a caring,

welcoming and professional manner. These goals will be

implemented in a way which optimises the highest

operational standards with efficiency and profitability.


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Defining the Business


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XeroxWe make copying equipment- We help

improve office productivity

Columbia Pictures

We make movies- We market

entertainment

Encyclopaedia BritannicaWe sell encyclopaedias-We

distribute information


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Assigning Resources to SBUs

The Growth Share Matrix ( BCG Matrix)

Strategies

Build, Hold, Harvest, Divest


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SBU Characteristics

Serves a homogeneous set of markets

with a limited number of related

technologies

Serves a unique set of product- markets

Has control over the factors necessary

for successful performance, such asR&D, production, marketing, and

distribution

Has responsibility for its own profitability


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Planning New Business/ Downsizing

older ones

Intensive Growth

Integrative growthBackward integration

Forward integration

Horizontal integration

Diversification

Downsizing and Divesting Old Business


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Business Unit Strategic

PlanningBusiness Mission

SWOT Analysis

External Environment analysisOpportunities

Threats

Internal environment AnalysisStrengths

Weaknesses


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Opportunity Matrix

Success Probability

High Low

High

Low


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Threat Matrix

Probability of Occurrence

High Low

High

Low


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Performance -Importance Matrix

Performance

Low High

High

Low


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Goal Formulation-Hierarchical,quantifiable,realistic, consistent

Strategic FormulationsMarket Strategy

Overall cost LeadershipDifferentiation

Focus

Strategic Alliances

Product& Service AlliancePromotional Alliance

Logistics alliances

Pricing Collaborations


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Program Formulation

Implementation


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Shared

Values

Skills

Style

Staff Systems

Strategy

Structure


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Feedback And Control


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The Marketing Process

The Value Delivery Sequence

Steps in the Planning Process

Analyzing Market OpportunitiesDeveloping Market Strategies

Planning Marketing Programs

Managing the Marketing Effort


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Contents of a Marketing Plan

1. Executive Summary

2. Situation Analysis

Current Marketing Scenario/Market Summary

Target Market, Market Demographics,BehaviourFactors,Market Needs, Market Trends, Market Growth

SWOT Analysis

Competition

Product Offering KSF

Critical Issues


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3. Marketing Strategy

Mission

Marketing Objectives

Financial Objectives Target Market

Positioning

Strategies

Marketing Mix

Marketing Research


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4.Financials

Break Even Analysis

Sales Forecasts

Expense Forecast

5. Controls

Implementation

Marketing Organisation

Contingency Planning


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PORTERS 5 FORCES MODEL

Rivalry Among

Existing FirmsBargainingpower Of

Suppliers

Bargainingpower Of

Buyers

Threat of New Entry

Threat of Substitute

Product & Services


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The Forces

New entrants, potentialentrants and the threat ofentry;

Substitute products/services;Buyers and Buyer power;

Suppliers and supplier power;

Competitors and the nature ofinter-firm rivalry.


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What is the threat of entry into the industry and

from where does it arise?

Where are present and potential substituteproducts/services located and what is their impactor likely impact on the organization and theindustry?

Who are the buyers and what is the extent of theirpower with regard to the organization?

Who are our suppliers and what is their powerwith regard to the organization?

Who are our present and potential competitorsand how intense is (or will be) present andpotential competitive rivalry?


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Potential entrants. Threat of entry depends on theextent of barriers to entry

Is the potential customer base sufficient to supportnew operations?

How heavy is the capital investment requirement inthe industry? Is finance available?

Is there a strong brand image to overcome?

How costly will be access to distribution channels? What operating cost advantages might existing

competitors hold (e.g. experienced staff, patentprotection, etc.) ?

Is there governmental/legislative protection afforded to

existing organizations? How vigorously will existing operators react against

new entry attempts?


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Substitutes products/services will be more

prevalent if:

Customers perceive other offers to

perform the same function as ours;

Substitute products offer higher value

for money

Substitute products earn higher

profits.


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Buyer power is likely to be high if:

There is a concentration of buyers;

There are alternative sources of supply;

Buyers have access to useful information

and then to shop around;

There is a threat of backward integration if

the buyer does not obtain satisfactory

supplies and prices.


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Supplier power is likely to be high if:

There is a concentration of suppliers;

The costs of switching from one supplier

to another are high;Suppliers are likely to integrate forward if

they do not obtain the price/profits they

seek;

The organization has little countervailingpower.


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Intensity of rivalry will be greater If:

Competitors are of equal size and areseeking dominance;

The market is mature and subject to shake

out activities;

High fixed costs provoke price wars tomaintain capacity;

Product homogeneity necessitates activity to

maintain share;


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Eight most significant potential

competetive advantage

A superior product benefit

A percieved advantage

Low cost operations

Legal advantage

Superior contacts

Superior knowledge

Scale advantages

Offensive attitudes


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Creating Barriers to Entry

Product Differentiation Advantage

Superior quality,Superior levels ofservice,strong brand names,high levels of brandloyalty,distribution strengths

Absolute cost advantageInvestment in R&D,high levels of productiontechnology,patents, previleges access to scarceresources,vertical integration,distribution access

and efficiency

Scale related advantageHigh production and sales level

Documents

corporate starategic planning