Contents

Strategy ................................................................................................................................................... 2
Marketing Strategy ................................................................................................................................. 2
Components of a Strategy(SORSS) .......................................................................................................... 2
Levels of Strategy .................................................................................................................................... 3
The marketing plan ................................................................................................................................. 4
Situation Analysis .................................................................................................................................... 5
Formulation of a strategy ....................................................................................................................... 5
The Balance score card model of SWOT analysis ................................................................................... 6
The product Matrix ................................................................................................................................. 6
Corporate Strategy Decisions ................................................................................................................. 6
The Ansoff Matrix ................................................................................................................................... 7
The BCG Matrix(Growth-Share Matrix) .................................................................................................. 8
GE/McKinsey Matrix(Business Position Matrix) ..................................................................................... 9
SBU Level Strategy ................................................................................................................................ 10
Michael porter’s generic strategy ......................................................................................................... 10
Robert Miles and Charles Snow ............................................................................................................ 11
7 Domain of market attractiveness ...................................................................................................... 11
Strategy
A strategy is a fundamental pattern of present and planned objectives, resource allocation
and interaction of the organisation with market, competitors and other external
environmental factors.

Marketing Strategy
It is the overall game plan of a business of reaching people and convert them into customers
rather, loyal customers and apostles.
A marketing strategy contains a lot of information about the company, its past
performance and future plans, its value proposition, key marketing messages, information
about target segment, product launches and other high-level elements that are crucial to the
company. It plays a crucial role in development of a marketing plan. However, a marketing
strategy should always be of long lifespan than an individual marketing plan because a
marketing strategy preaches the value proposition and key elements of a company’s brand
which shouldn’t change often.

Components of a Strategy(SORSS)

A strategy includes following elements/components

1. Scope
2. Objectives & Goals
3. Resource Deployment
4. Sustainable Competitive Advantage
5. Synergy

1. Scope: It refers to the breadth of the strategic domain of an organisation i.e. number
of industries, types of industries, location of industries, product lines, existing and
potential market segment. It should reflect the managements view of the firm’s
purpose or mission.
2. Goals and Objectives: A strategy should include the desired level of accomplishments
in various dimensions of performance such as volume growth, profit, ROI, brand
equity with various products in various markets.
3. Resource Deployment: Resources such as Land, Labour and Money are always limited.
Hence, a proper allocation of resources across businesses, markets, products and
functions is needed
4. Sustainable competitive advantage identification: The company has to compete and
sustain in the market. For this the managers must be able to identify the distinctive
competencies, relative strengths of the business which will act as an advantage in
competing with the competitor and sustaining in the market and are difficult to
replicate. These competencies are called sustainable competitive advantages.
5. Synergy: Synergy exists when a firm’s businesses, markets, products, resources and
competencies reinforce one another so that the total performance of the firm as a
 whole is greater than their individual performances. Synergy can be knowledge based,
corporate based, or resource based.

Levels of Strategy

Strategy is at the heart of business. A good strategy and a proper implementation of it, can
make your business rise above others. If any of the two goes wrong, the business will
experience a fall. Given below are the 3 levels of strategies generally used by businesses. Only
when all three of these levels are carefully considered and implemented, your business will
be able to get on and sustain on the right path towards a prosperous future
A. Corporate Strategy
B. SBU Level Strategy
C. Functional Level Strategy

Corporate Strategy

SBU Strategy SBU Strategy SBU Strategy

Marketing & Sales

Mfg Strategy
Strategy Functional Level

Strategy

Accounting/Control
R&D Strategy
Strategy

A) Corporate Level Strategy

 First level of strategy
 Oversees everything you do
 Outlines what business you are going to engage in and how you plan to enter
and win those markets
 Managers need to co-ordinate activities related to multiple SBUs
 Decisions about the goals, objectives and resource deployment are the main
focus of a corporate level strategy
 Various high-level activities such as diversification, forward and backward
integration, market development etc are also a part of this strategy
 B) SBU Level Strategy:
 A step down from the corporate strategy level
 More specific and related to smaller businesses within large organisations
 Identifying Sustainable advantage and determine strategy accordingly
C) Functional Level Strategy:
 Day to day strategy that keeps the organisation moving in the right direction
 Varies from one functional department to other
 Functional departments such as marketing, HR, operations, finance etc.
 Marketing Strategy: The primary focus is to allot marketing resources & plan
marketing activities effectively to accomplish the firm’s objectives within a
specific product market.
 Interrelated to strategies at all level
At all levels, the components(SORSS) of strategy remains same.

The marketing plan

A marketing plan is a business document outlining your marketing strategy and tactics. It is generally
made and focussed on a specific period of time say 12 months and covers a variety of marketing
related details such as costs, goals and actions

Unlike a typical business plan, marketing plan is dynamic in nature i.e. it changes and evolves
with your business, its need, trends and external environment. The main function of a marketing plan
is to act as a roadmap that guides you in reaching your business objectives.

Benefits of having a marketing plan

 Gives you clarity about who your market and customer are
 Helps you craft marketing messages that speak directly to the market which you
cannot afford to be improper or not in line with strategy
 Helps you determine the best of all available marketing platforms and methods
available for your business

Important Constituents of a marketing Plan

 Situation Analysis
 Targeted customer segment
 Competitive Advantage
 Pricing & Positioning
 Distribution Plan
 SWOT Analysis

Contents of a marketing plan

 Executive Summary, present environment, performance assessment, key issues,

objectives, marketing strategy, action plan, financial statement, controls and
contingency plans
Situation Analysis

Before developing a marketing strategy, it is very important that you conduct a situation analysis. It is
an essential part of any business or marketing plan and should be reviewed periodically because
situations change dynamically.

A situation analysis defines the internal and external factors of a company and clearly
identifies the capabilities, existing and potential customer, external & internal business environment
and their impact on the organisation’s business. It can also help in identifying Strengths, Weaknesses,
Opportunities and Threats to the business and can act as an eye opener to what is going on and what
should be the next step of the company. Following factors should be taken into consideration while
doing a situation analysis. (PCDES)

1. Product Situation
 What’s the current product
 What are my core products and what are secondary/supportive products?
 Makes you able to relate back to the client/customer’s need
2. Competitive Situation
 Analyse your main competitors
 Ask questions about the competitors- Who are they, what are their
competitive advantages etc.
3. Distributive Situation
 Review your distribution system- style, scope, criticality etc
4. Environmental Factors
 A PESTLE analysis
5. SWOT Analysis

Formulation of a strategy

• Corporate objectives and strategies

1

• SBU objectives and strategies

2

• Market Opportunity analysis(4Cs- Competitive advantage, customer, context

3 & competitors)

• Developing Strategic marketing plans

4

• Formulating strategies for specific market situations

5

• Implementation and Control of all Marketing Strategies

6
The Balance score card model of SWOT analysis

Particular S W O T
Finance
Consumer
Employee
Shareholder

The product Matrix

Range of Markets Small CAR SUV Crossover

Products
1
2
3 Customer Needs

Corporate Strategy Decisions

Components of a Corporate Strategy(OCDSAS)

1. Overall Scope and Mission

2. Company Goals & Objectives
3. Development strategy for future growth
4. Source of competitive advantage
5. Allocation of corporate resources
6. Sources of Synergy
1) Overall Scope and Mission: This contains the mission and vision of the organisation
 Mission: What is the organisation doing right now
 Vision: what the organisation wants to be in a long run
2) Company Goals & Objectives
 A performance dimension
 A desired level of accomplishments in each dimension within the desired timeframe
 Goals should be SMART (Specific, Measurable, Attainable, Relevant and Timebound
3) Development Strategy for future growth
 Firm can head in two directions i.e. expansion of its current businesses in other
geographical locations or diversification into new businesses
 E.g. Starbucks- geographical expansion in India and China and acquisition of Teavana
thereby entering related diversification
 Use of Ansoff Matrix for better understanding
4) Source of Competitive Advantage
 Sustainable competitive advantage at corporate level is based on company resources
such as
i. Unique resources related to marketing
ii. Highly developed marketing information system
 iii. Co-operative and long-term relations with customers and suppliers
iv. Brand name that is recognised and easily recalled by customers
5) Allocation of corporate resources
 Using the BCG (Boston Consulting Group) matrix to do resource allocation and
strategy implementation

The Ansoff Matrix

The Ansoff matrix is a strategic planning tool that provides a framework to help managers make
strategies for future growth. Its named after Igor Ansoff who came up with this concept. He describes
four growth alternatives

1. Market Penetration Strategies

 Increase market share
 Increase product usage
 Increase frequency of use
 Increase Qty of use
 New applications
2. Product Development Strategies
 Product line extension
 New products for same market
 Product innovation
3. Market Development Strategies
 Expand market for existing products
  Geographic Expansion
 Target New segment

4. Diversification Strategies
 Vertical (Fwd/back integration)
 Concentric(Related) Diversification
 Conglomerate(Unrelated) Diversification

The BCG Matrix(Growth-Share Matrix)

It is a portfolio planning model developed by BCG. It is based on the observation that a company’s
business units can be classified into 4 categories based on market growth and market share relative
to their biggest competitor. Market growth is related to industry attractiveness and market share is
related to sustainable competitive advantage.

Cash flow

There are four categories

1. Dogs: divesting
2. Question Marks: may turn into a star and then cash cow, or may turn into a dog
3. Stars: if able to maintain large market share when growth slows, can convert into a cash cow
4. Cash cows: Leaders in mature markets, greater ROI, generate more than they consume

Limitations of BCG Matrix

 Market growth rate is an inadequate descriptor of overall industry attractiveness

 Relative market share is also an inadequate indicator of overall competitive strength
 The outcomes are very sensitive to how they are being calculated and measured
 Provides little guidance into best implementation of those strategies
 It is assumed that all business units are independent of one another except for cash flow
GE/McKinsey Matrix(Business Position Matrix)

GE multifactorial analysis is a technique used in brand marketing and product management to help a
company decide what product(s) to add to its product portfolio and which opportunities in the market
they should continue to invest in. It is conceptually similar to BCG analysis, but somewhat more
complicated. Like in BCG analysis, a two-dimensional portfolio matrix is created. However, with the
GE model the dimensions are multi factorial. This model aims to evaluate the existing portfolios of
strategic business units and to develop strategies to achieve growth by addition of new products and
businesses to this portfolio and further, to analyze which business units to invest in and which ones to
sell off.

The GE matrix is constructed in a 3x3 grid with Market Attractiveness plotted on the Y-axis
and business strength on the X-axis, both being measured on a high, medium, or low score. Five steps
must be considered in order to formulate the matrix:

The range of products produced by the SBU must be listed

 Factors which make the particular market attractive must be identified

 Evaluating where the SBU stands in this market
 Processes through which calculations about business strength and market attractiveness can
be made
 Determining which category an SBU lies in; high, medium, or low.

Factors to determine how strong a particular unit are including but not limited to market share,
market growth, brand equity, profit margins, etc. After you have measured the strength of all
business units, you need to plot them in these 9 cells

Grow/Invest: high market share, best ROI and investment is strongly recommended

Hold: ambiguous about performance and investment should be done only if money is left after
investing in other profitable units.

Harvest/Divest: here investment should be made if the unit is giving a better ROI, because the units
in these cells are having a poor performance in an unattractive industry. If ROI is not good its better
to liquidate such units
SBU Level Strategy

SBU: A strategic business unit, popularly known as SBU, is a fully-functional unit of a business that
has its own vision and direction. Typically, a strategic business unit operates as a separate unit, but it
is also an important part of the company. It reports to the headquarters about its operational status.

E.g. KFIL Solapur SBU

Ideal Characteristics of SBU

 Homogeneous set of markets

 Unique set of product markets
 Control over factors necessary for successful performance
 Responsible themselves for profitability
 No synergy, dependence, inter-relation involved

In this type of strategy, you focus on your sustainable competitive advantage to provide value to
your customer.

Michael porter’s generic strategy

These three approaches are examples of "generic strategies," because they can be applied to
products or services in all industries, and to organizations of all sizes. They were first set out by
Michael Porter in 1985. Porter called the generic strategies "Cost Leadership" (no frills),
"Differentiation" (creating uniquely desirable products and services) and "Focus" (offering a
specialized service in a niche market). He then subdivided the Focus strategy into two parts: "Cost
Focus" and "Differentiation Focus."

The Cost Leadership Strategy

 Leader in terms of cost in your industry or market

 Confidence that you can maintain your position of leadership
  Access to the capital needed to invest in technology that will bring costs down
 Very efficient logistics
 A low-cost base labour, material and facilities
 A way of sustainably cutting costs below those of other competitors

The greatest risk in pursuing a cost leadership strategy is that these resources are not unique to you
and hence won’t act as a competitive advantage forever. One way of adopting this strategy is by use
of kaizens i.e. continuous improvement.

Differentiation Strategy

Differentiation involves making your products or services different from and more attractive than
those of your competitors. How you do this depends on the exact nature of your industry and of the
products and services themselves, but will typically involve features, functionality, durability,
support, and also brand image that your customers value.

To make a success of a Differentiation strategy, organizations need:

 Good research, development and innovation.

 The ability to deliver high-quality products or services.
 Effective sales and marketing, so that the market understands the benefits offered by the
differentiated offerings.

Large organizations pursuing a differentiation strategy need to stay agile with their new product
development processes. Otherwise, they risk attack on several fronts by competitors pursuing Focus
Differentiation strategies in different market segments.

`The focus Strategy

It rests on the choice of a narrow competitive scope within an industry. The focuser selects a
segment or groups of segments in the industry and tailors its strategy to serving them to the
exclusion of others. This strategy has two variants

a) Cost focus: Firm seeks a cost advantage in its target segment.

b) Differentiation focus: A Firm seeks differentiation in its target segment.

Robert Miles and Charles Snow

This classifies businesses into 4 types

1. Prospector: focus on growth through development of new products and markets e.g. 3M
2. Defender: Concentrates on maintaining current market share while paying less attention to
new product development
3. Analyser: Attempt to maintain a strong position in its core product-market and seek to
expand into new product markets
4. Reactor: Businesses with no clearly defined strategy, hence don’t succeed

7 Domain of market attractiveness(opportunities TMISMAC)

Mullins' Seven Domains Model helps you explore the impact of seven key factors – or "domains" –
on your business
 1. Market Domain/Macro Level : Market Attractiveness

This domain looks at market attractiveness from a macro (large-scale) perspective.

2. Market Domain/Micro Level: Sector Market Benefits and Attractiveness

Realistically, it's unlikely that your venture will meet the needs of everyone in the market.
You'll be more successful if you target your idea at one market sector or segment , and aim to meet
its needs fully. Hence the questions asked will be which segments are going to be benefitted and
how. What are the trends this segment is showing. What are the other market segments you could
access if you are successful in this one.

3. Industry Domain/Macro level: Industry Attractiveness

Here you look at how attractive the industry you are in is. To understand this you need to
know the competition, the industry and then suppliers and buyers.

4. Industry Domain/Micro level: Sustainable Advantage

How your company can have a USP. How can you identify your sustainable competitive
benefits over your competitors.

5. Team Domain: Mission, Aspirations and Propensity of Risk

In this domain, located in the center of the model, you're going to analyze commitment –
yours, and that of your team – to this idea.
 6. Team Domain: Ability to Execute on Critical Success Factors(CSFs)

You now need to identify the Critical Success Factors (CSFs) for the business and think
realistically about whether your team can deliver on these.

7. Team Domain Connected up, down, across value chain.

This last domain is all about your connections and how important they are to the success of your
business.

The model was originally created for entrepreneurs, but you can use this model in existing
organizations to decide whether to pursue a new product idea or market expansion.

Red ocean and Blue ocean strategy

Blue ocean Strategy: Lasting success comes not from battling with your competitors but from
creating untapped new market growths i.e. by creating blue oceans

e.g. canon, Bloomberg

Red ocean strategy: Cut throat competition e.g. Indian smart phone market

High
Blue
ocean

Offering
level

Red
ocean

High Competing factors

Analysis of Business Environment
1. Intenal environment: tools used are
 Value chain Analysis
 VRIO Analysis
2. External environment
 ETOP (Environmental Threat Opportunity Profile)
 Porter’s 5 force Model
 Perceptual Mapping

Value Chain Analysis