Copyright © 2011 Pearson Education, Inc.

, publishing as Prentice Hall 1

 Strategic Planning

The hard task of selecting an overall

company strategy for long-run survival
and growth is called strategic planning

Copyright ©2014 by Pearson Education, Inc. All rights reserved

 Companywide Strategic Planning
Strategic Planning

Strategic planning is the process of

developing and maintaining a strategic fit
between the organization’s goals and
capabilities and its changing marketing
opportunities
› This matching of inner possessions and aptitudes to the
outer opportunities is termed as strategic fit

Copyright ©2014 by Pearson Education, Inc. All rights reserved

 The mission statement is the organization’s purpose,
what it wants to accomplish in the larger environment
Mission Goals are not time-limited; A general
statement of desirable outcomes,
directly supportive of & aligned with
the mission
Goals Objectives are specific measurable
targets/ expressions of the
stated goals, expressed in
quantifiable terms
Objectives The plan by which measurable
objectives will be
achieved

Marketing oriented efforts Strategies Implementation

of strategic
plan

Sales oriented efforts Tactics

4
Copyright © 2011 Pearson Education, Inc., publishing as Prentice Hall
 Defining a Market-Oriented Mission

 The mission statement is the

organization’s purpose, what
it wants to accomplish in the
larger environment

 A mission statement should:

1. Not be myopic in product terms
2. Meaningful and specific
3. Motivating
4. Emphasize the company’s strengths We help you organize the world’s
5. Contain specific workable information and make it
guidelines universally accessible and useful.
6. Not be stated as making sales or
profits

Copyright ©2014 by Pearson Education, Inc. All rights reserved

 Companywide Strategic Planning
Defining a Market-Oriented Mission

 Some companies define them

myopically in product or technology
terms
 “We make & sell furniture”
 But mission statement must be
MARKET-ORIENTED
 Market-oriented mission statement
defines the business in terms of
satisfying basic customer needs
Copyright ©2014 by Pearson Education, Inc. All rights reserved
  Doesn’t define itself as an online social
network

 Its mission is to connect people around

the world & help them share important
moment in their lives

Copyright ©2014 by Pearson Education, Inc. All rights reserved

Copyright ©2014 by Pearson Education, Inc. All rights reserved
 Corporate Strategy

Business Unit Business Unit Business Unit

Strategy Strategy Strategy

Product Product Product

Strategies Strategies Strategies

Functional Area Functional Area Functional Area

Strategies Strategies Strategies
Copyright © 2011 Pearson Education, Inc., publishing as Prentice Hall 9
 Strategic Planning

Annual & long- Strategic plan

Strategic Companies range plans involves adapting
planning sets usually prepare deal with the the firm to take
annual plans, company’s advantage of
the stage for long-range current opportunities in its
the rest of plans, & businesses & constantly
planning strategic plans how to keep changing
environment
them going

Copyright ©2014 by Pearson Education, Inc. All rights reserved

 Thus, marketing planning
occurs at the business-unit,
product, and market levels
Steps in Strategic Planning

At the corporate It then creates Headquarters In turn, each

level, the company detailed reviews the business and
starts the strategic supporting portfolio of product develops
planning process objectives that businesses and detailed marketing
by defining its guide the entire products is best and other
overall purpose company for the company departmental
and mission and how much plans that support
support to give the company-wide
each one plan
What is the difference between corporate strategy and marketing strategy?
What are the similarities?

Corporate Strategy Marketing Strategy

o Defined by executive o Within corporate parameters
management o Supporting goals and objectives
o Overall missions, goals, objectives o Strategy to serve corporation’s
o Overall strategy scenario broader specific concepts and tools

What is the process by which marketing strategy ought to be formulated?

Corporate Strategy
o Establish mission
o Set overall goals and objectives
o Analyze current macro-environment
o Consolidate results periodically
o Confirm/deny changes in direction
Marketing Strategy
o Mission implementation; maintain
mission consistency
o Interpret goals and strategies into
marketing goals and strategies
o Monitor macro-environment; analyze
micro aspects of customer behavior
o Establish results benchmarks
o Provide directional definitions

12
Copyright © 2011 Pearson Education, Inc., publishing as Prentice Hall
 Set Goals and Objectives
 Goals are not time-limited
 Objectives are specific targets, expressed in quantifiable terms

 Understand Environment of Business Operations

 Develop strategies that fit the environment or, if distinctive
competencies and resources are readily available, develop strategy to
change the environment
 Market share driven or market owner?

 Learn from Experience, Update Experience

 Continuously monitor deviations from the plan and learn from the
deviations

 Critical Thinking
 Strategy development is a creative, interpretive and learning-
oriented process.

13
Copyright © 2011 Pearson Education, Inc., publishing as Prentice Hall
Step 1: Develop Goals and Objectives
Step 2: Environmental Analysis
› Market segments, competition, channel design and so on.
› Strengths, Weaknesses, Opportunities, Threats (SWOT)
Step 3: Strategy Design
› Elements could include vision of future business, allocation of resources, etc.
› Many of these elements will be natural extensions of Step 2
Step 4: Implementation Plan Design
› Implementation plan must be within distinctive competencies and resources/acquisition and
funding become issues
› Measurement Plan should be included
Step 5: Strategy Implementation
Step 6: Monitoring of Environment & Performance Results
› As soon as the implementation begins, the environment will change.
Step 7: Analysis of Performance
› Variance to plan should be completely understood–both over and under achievement
Step 8: Adjustments
14
1. Setting Goals and Objectives
2. Analysis of the current situation
3. SWOT Analysis: Strengths, Weaknesses,
Opportunities and Threats
4. Strategy design and choice of the best strategy
5. Implementation plan design
6. Strategy implementation
7. Monitoring of environment and performance results
8. Analysis of variance from desired performance levels
9. Adjustments based on analysis of variance
15
Copyright © 2011 Pearson Education, Inc., publishing as Prentice Hall
 Seek to establish a fit between the
business environment and the strategy

Fit - Providing superior value through

differentiated pieces of the total
offering

Differentiate the total offering through

key distinctive competencies.
16
Copyright © 2011 Pearson Education, Inc., publishing as Prentice Hall
 Drive change rather than adapting to it
o Quality and process improvement are
essential to superior value
o Measuring and tracking results is
necessary for continuous improvement

17
Copyright © 2011 Pearson Education, Inc., publishing as Prentice Hall
 Change in customers, channels and
competitors cause discontinuities in
the evolution of industries or markets
 Companies seldom impact change in
market
 Keep up with changes in the rules of
the market

18
Copyright © 2011 Pearson Education, Inc., publishing as Prentice Hall
 Includes infrastructure, personnel,
finances etc.

 Are not limitless

 Strategic Planning Process is a

resource allocation process
19
Copyright © 2011 Pearson Education, Inc., publishing as Prentice Hall
 Relative Market Share
High Low
High

Market Stars Question Marks

Growth
Rate

Low Cash Cows Dogs

20
Copyright © 2011 Pearson Education, Inc., publishing as Prentice Hall
 High Growth, high Share
 Needs heavy investment; builds market
share
 Manage with market ownership
o Eventually become Cash Cows

Stars Question Marks

Cash Cows Dogs

21
Copyright © 2011 Pearson Education, Inc., publishing as Prentice Hall
 Low growth, high Share
 Established, successful, invest enough
to hold market
 Cash generators
 Harvest to increase short term cash

Stars Question Marks

Cash Cows Dogs

22
Copyright © 2011 Pearson Education, Inc., publishing as Prentice Hall
 Low share, high growth markets
 Requires cash to hold share
 What should be done?
 Match with organization’s Stars Question Marks
distinctive competencies?
 Obtain the resources
Cash Cows Dogs
needed?
Build these into stars or
phase out, sell
23
Copyright © 2011 Pearson Education, Inc., publishing as Prentice Hall
 Low growth, low share
 May be self-sustaining
 One organization’s dog could be
another’s cash cow
 Discontinue, divest
Stars Question Marks

Cash Cows Dogs

24
Copyright © 2011 Pearson Education, Inc., publishing as Prentice Hall
 Maturity
Sales
Revenue/
period

Decline
Growth

Introduction

Time

25
Copyright © 2011 Pearson Education, Inc., publishing as Prentice Hall
Siemens Changes Its Strategy

Pierer’s efforts to restructure the company, focusing on new technologies where Siemens
could see growth while maintaining a presence in “stodgy” markets that other conglomerates
were abandoning.

Siemens kept its power generation and locomotive businesses, though short-term prospects
were not inspiring. Eventually, energy demand would outstrip the world’s ability to generate
power with existing facilities and energy efficiency needs would bring life back to aging
railroads.

This long-term focus, combined with Siemens’ competencies in these markets (ironically,
Siemens’ strongest global competitor, General Electric, went through the same decision
process a decade earlier) put Siemens in an attractive position as the power generation
market picked up and railroads were reborn in the last half of the decade.

Recognize that decisions based on a short-term outlook are not always wise, notwithstanding
“Wall Street” attitudes. Power generation and locomotives are very long cycle businesses,
while semiconductors and components are short-cycle. Understanding individual business
cycles for specific markets rather than painting all businesses with the same economic and
planning brush is a prime goal in this chapter.

26
Copyright © 2011 Pearson Education, Inc., publishing as Prentice Hall