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STRATEGIC PLANNING:
The process of developing and maintaining a strategic fit between the organizations goals and
capabilities and its changing marketing opportunities is called Strategic planning.
Steps in the Strategic Planning:
The mission statement should be market oriented and defined in terms of the
customer needs.
"To be the world's premier consumer products company focused on convenient foods and
beverages. We seek to produce healthy financial rewards to investors as we provide
opportunities for growth and enrichment to our employees, our business partners and the
communities in which we operate. And in everything we do, we strive for honesty,
fairness and integrity."
DESIGNING THE BUSINESS PORTFOLIO
The business portfolio is the collection of businesses and products that make up the
company.
Guided by the companys mission statement and objectives, management must plan its
Business Portfolio. The best business portfolio is the one that best fits the companys
strengths and weakness to opportunities in the environment.
Business Portfolio planning involves two steps.
1. The company must analyze its current business portfolio and decide which business
should receive more, less or no investment.
2. The company must shape the future portfolio by developing strategies for growth and
downsizing.
Step I. Analyzing the Current Business Portfolio:
Portfolio Analysis: The process by which management evaluates the products and
businesses making up the company.
Managements first step is to identify the key businesses making up the company. These
can be called Strategic Business Units (SBUs).
A Strategic Business Unit (SBU) is a unit of the company that has separate mission and
objectives and that can be planned independently from other companys businesses.
The next step in the business portfolio analysis calls for management to assess the
attractiveness of various SBUs and decide how much support each deserves.
The purpose of strategic planning is to find ways in which the company can best use its
strengths to take advantage of attractive opportunities in the environment.
The best known portfolio planning method was developed by the Boston Consulting
Group, a leading management consulting firm.
The BCG Growth Share Matrix:
A portfolio planning method that evaluates a companys strategic business units in terms
of their market growth rate and relative market share.
SBUs are classified as STARS, CASH COWS, QUESTION MARKS, or DOGS.
BCG Growth-Share Matrix
Stars
Cash Cows
Question Marks
Build into STAR via investment if warranted, or reallocate financing and let slip
into DOG status.
Dogs
Difficult to define SBUs and measure market share and growth rate.
Market Penetration:
Add new stores in current market areas; improve advertising, prices, menu, and
service.
Market Development: identify and develop new markets for current products.
Making and selling CDs, testing restaurant concepts, or branding casual clothing.
Downsizing:
Reducing the business portfolio by eliminating the products or business units that are not
profitable or that no longer fit the companys overall strategy.
Marketing strategy: The marketing logic by which the business units hopes to achieve its
marketing objectives.
Customer centered marketing strategy:
Companies know that they cannot profitably serve all consumers in a given market-at least not
all consumers in the same way. There are too many different kinds of consumers with too many
different kinds of needs.
And most companies are in a position to serve some segments better than the others. Thus each
company must divide up the total market, choose the best segments, and design strategies for
profitably serving chosen segments. This process involves three steps.
1. Market Segmentation
2. Target Marketing
3. Market Positioning
I.
Market Segmentation
Market segmentation is the process of dividing a market into distinct groups of buyers
with different needs, characteristics, or behavior who might require separate products of
marketing programs.
A market segment consists of consumers who respond in a similar way to a given set of
marketing efforts.
II.
Target Marketing
Target Marketing involves evaluating each market segments attractiveness and selecting
one or more segments to enter.
Target segments that can sustain profitability.
Alternatively, a company might choose to serve several related segments- perhaps those
with different kinds of customers but with same basic wants.
III.
Market Positioning:
Arranging for a product to occupy a clear, distinctive, and desirable place relative to
competing products in the minds of target consumers.
Process begins with differentiating the companys marketing offer so it gives consumers
more value.
SWOT ANALYSIS
An overall evaluation if the companys strength (S), weakness (W), Opportunities (O), and
Threats (T) is called SWOT analysis.