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FORMULATION
Prof. Snehal Chincholkar
STRATEGIC PLANNING
is the managerial process of developing and
maintaining a strategic fit between the organization's
objectives and resources and its changing market
opportunities.
Org Objectives
Strategic Fit
Resources
Changing Environment
Corporate
Mission &
Objectives
Strategy:
Corporate
Business
Functional
Operating
Plans
STRATEGIC MARKETING
Marketing Strategy is a series of integrated
actions leading to a sustainable competitive
advantage.
John Scully
Strategy Formulation
Vision & Mission
Opportunities & Threats
Strengths & Weaknesses
Long-Term Objectives
Alternative Strategies
Strategy Selection
Fred R. David
Prentice Hall
3C
Corporate
Competitor
Customer
Strategic Marketing Decisions
Where to compete
How to compete
When to compete
CORPORATE
Business Definition
By defining a business from a
customer or market perspective
an organization is appropriately
viewed as:
not
a product-producing or service delivery
enterprise.
VISION
It guides the business towards the intention of its future.
The Vision should be
Informed
Shared
Competitive
Enabling
VISION
Nike: To be the number one athletic company in the world
in the 1960s it was Crush Adidas
Alzheimers Association: Our vision is a world without
Alzheimers
San Diego Zoo: To become a world leader at connecting
people to wildlife and conservation
CORPORATE MISSION
Broad purposes of the organization
General criteria for assessing the long-term organizational
effectiveness
Driven by heritage & environment
Mission statements are increasingly being developed at the SBU
level as well
Business Mission
Underscores the scope of an organizations operations apparent in its
business definition
Reflects managements vision of what the organization seeks to do
Most statements describe:
the organizations purpose
customers, products/services, markets, philosophy, and
technology
EXAMPLES OF CORPORATE
MISSION (CONTD)
MARRIOTTS Mission Statement:
We are committed to being the best lodging and food service
company in the world, by treating employees in ways that create
extraordinary customer service and shareholder value.
Facebook: Facebooks mission is to give people the power to
share and make the world more open and connected
CORPORATE CULTURE
Business Goals
Goals or objectives convert the organizations mission into tangible actions
and results that are to be achieved, often within a specified time frame.
Three
major categories of goals:
1. Production
2. Financial
3. Marketing
Production Goals
Apply to the use of
manufacturing and service
capacity and to product and
service quality.
Financial Goals
Focus on return on
investment, return on sales,
profit, cash flow, and
shareholder wealth.
Marketing Goals
market share
marketing productivity
sales volume
profit
customer satisfaction
customer value creation
Company vision
Hierarchy of Goals
Company vision
Mission statements
Hierarchy of Goals
Company vision
Mission statements
Strategic objectives
Hierarchy of Goals
Measurable
Specific
Appropriate
Realistic
Timely
Challenging
Resolve conflicts that arise
Yardstick for rewards and
incentives
Company vision
Mission statements
Strategic objectives
Hierarchy of Goals
COMPETITION
OTHER CHARACTERISTICS OF
COMPETITIVE ADVANTAGE
Substantiality
Is it substantial enough to make a difference?
Sustainability
Can it be neutralized by competitors quickly?
Ability to be leveraged into visible business attributes that will influence
customers
(Source: Strategic Marketing Management, Aakers)
EXAMPLE
The following is a Five Forces analysis of The Coca-Cola Company in relationship to its Coca-Cola brand.
Threat of New Entrants/Potential Competitors : Medium Pressure
Entry barriers are relatively low for the beverage industry: there is no consumer switching cost and zero capital requirement. There is an increasing
amount of new brands appearing in the market with similar prices than Coke products
Coca-Cola is seen not only as a beverage but also as a brand. It has held a very significant market share for a long time and loyal customers are not very
likely to try a new brand.
Threat of Substitute Products : Medium to High pressure
There are many kinds of energy drink s/soda/juice products in the market. Coca-cola doesnt really have an entirely unique flavor. In a blind taste test,
people cant tell the difference between Coca-Cola and Pepsi.
The Bargaining Power of Buyers : Low pressure
The individual buyer no pressure on Coca-Cola
Large retailers, like Wal-Mart, have bargaining power because of the large order quantity, but the bargaining power is lessened because of the end
consumer brand loyalty.
The Bargaining Power of Suppliers : Low pressure
The main ingredients for soft drink include carbonated water, phosphoric acid, sweetener, and caffeine. The suppliers are not concentrated or
differentiated.
Coca-Cola is likely a large, or the largest customer of any of these suppliers.
Rivalry Among Existing Firms: High Pressure
Currently, the main competitor is Pepsi which also has a wide range of beverage products under its brand. Both Coca-Cola and Pepsi are the predominant
carbonated beverages and committed heavily to sponsoring outdoor events and activities.
There are other soda brands in the market that become popular, like Dr. Pepper, because of their unique flavors. These other brands have failed to reach
the success that Pepsi or Coke have enjoyed.
CUSTOMER
MARKETING AUDIT
Marketing audit is a comprehensive, systematic, independent, and periodic
examination of a companysor business unitsmarketing environment, objectives,
strategies, and activities with a view to determining problem areas and opportunities
and recommending a plan of action to improve the companys marketing
performance
Philip Kotler
SITUATION ANALYSIS
Internal Analysiscompany; capability etc.
External Analysiscustomers, market definition, industry structure
SWOT Analysis
Systematic
Sequential diagnostic steps
Independent
Internal & external auditors
Periodic
Performed at regular intervals