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CHAPTER 3
WINNING MARKETS: MARKETORIENTED STRATEGIC
PLANNING
Important Topics of This Chapter
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Characteristics of Corporate Planning:
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Vision
Mission
SBU
Product Portfolio Models:
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BCG Model
GE Model
Strategies for Planning A New Business
Business Strategic Planning
The Marketing Process
Contents of A Marketing Plan
CORPORATE AND DIVISION
STRATEGIC PLANNING
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Defining the Mission:
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History
Preferences
Environment
Resources
Distinctive Competencies.
Characteristics of Mission Statements:
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Goals
Company policies with suppliers, customers. etc.
CORPORATE AND DIVISION
STRATEGIC PLANNING
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Characteristics of Mission Statement (cont.):
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Competitive scope:
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Industry, product, competence, market-segment, vertical,
geographical
Establishing Strategic Business Units (SBU):
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Single business:
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Satisfies its own set of competitors:
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customer group
customer needs
Single managers responsible for planning and technology
improvements
DIVISION STRATEGIC
PLANNING (CONT.)
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Assigning Resources to Each SBU:
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Boston Consulting Group Model(BCG):
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Strategies:
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Market share and market growth
Build-increase market share
Hold-maintain market share
Harvest-increasing short-term cash flow
Divest-liquidation.
Mistakes:
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expect all SBU will have same growth pattern,
very little cash retained for cash cows.
Analyzing Current SBU’s:
Boston Consulting Group Model
High
High
Stars
• High growth & share
• Profit potential
• May need heavy
investment to grow
Cash Cows
Low
Market Growth Rate
Relative Market Share
Low
Question Marks
• High growth, low share
• Build into Stars/ phase out
• Requires cash to hold
market share
Dogs
• Low growth, high share • Low growth & share
• Established, successful • Low profit potential
SBU’s
•Produces cash
DIVISION STRATEGIC
PLANNING (CONT.)
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The General Electric Model(GE):
» Market Attractiveness and Business Strengths.
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Critiques of Portfolio Models:
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Positives:
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help to understand economies of business better
quality of plans may be improved
communication with top management may be improved.
pinpoint information gab
help to eliminate weaker businesses
open opportunities to invest to more profitable businesses.
Negatives:
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too mach emphasis to market share,
Can be manipulated to produce desired location
fail to delineate synergy between two or more business.
Industry Attractiveness
Analyzing Current SBU’s:
GE Strategic Business-Planning Grid
Business Strength
Strong
Average
Weak
C
High
A
Medium
B
Low
D
PLANNING NEW
BUSINESSES
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Intensive Growth:
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Product/market expansion grit
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Market Penetration
Market Development\Product Development
Integrative Growth:
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Backward Integration
Forward Integration
Horizontal Integration
Developing Growth Strategies
Product/ Market Expansion Grid
Existing
Products
Existing
Markets
1. Market
Penetration
New
Markets
2. Market
Development
New
Products
3. Product
Development
4. Diversification
PLANNING NEW
BUSINESSES
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Diversification Growth:
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Related industries
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Unrelated Industries
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concentric diversification
horizontal diversification
Conglomerate diversification
Downsizing Older Businesses:
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Pruning.
BUSINESS STRATEGIC
PLANNING
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Business Vision/Mission
SWOT ANALYSIS:
– External Environmental Analysis:
» Opportunity and Treat Analysis
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Marketing Opportunity-success probability:
» Environmental Treat-probability of occurrence:
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Ideal business-opportunities are high and treat is low
Speculative business-high on both opportunities and treat
Mature business-low in opportunities and low in treat
Troubled business-low in opportunities and high in treats
» Internal Environmental Analysis:
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Strength and Weaknesses:
BUSINESS STRATEGIC
PLANNING (CONT.)
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Goal Formulation:
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MBO
Profit (short-term profit or long-term growth) vs. nonprofit
goals, or high growth Vs low risk.
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ROI
Realistic goals
Strategy Formulation:
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Cost Leadership:
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Differentiation:
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learning curve
service, quality, technology
Focus:
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target market
BUSINESS STRATEGIC
PLANNING (CONT.)
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Strategic Alliances:
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product/service alliances
promotional alliances
logistic alliances
pricing collaborations:
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Program Formulation:
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airlines,hotels and car rental
supporting programs-R&D
Implementation
Feedback and Control
THE MARKETING PROCESS
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Value Delivery Process:
– Production process:
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Strategic Marketing:
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Marketing is at the top
– segmentation
– targeting
– positioning
Tactical Marketing
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Provide and communicate the value-Japanese approach:
– zero Customer feedback
– zero product-improvement time
– zero purchasing time(JIT)
– zero set-up time
– zero defects.
THE MARKETING PROCESS
(CONT.)
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Analyzing Marketing Opportunities:
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Marketing research :
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Developing Marketing Strategies:
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Differentiation and positioning
Planning Marketing Programs:
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Marketing mix:
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Macro/Micro environment
Consumer and business markets.
Product, Price, Promotion and Place
Managing Marketing Effort:
» Implementation of marketing programs
CONTENTS OF MARKETING
PLAN
Executive Summary
 Current Marketing Situation:
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Market
Product
Competition
Distribution
Macro-environment
CONTENTS OF MARKETING
PLAN (CONT.)
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Opportunity and Issue Analysis:
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Opportunities/Treats Analysis.
Strengths/Weaknesses Analysis.
Issue Analysis.
Objectives/Goals:
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Financial.
Marketing.
CONTENTS OF MARKETING
PLAN (CONT.)
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Marketing Strategy:
» Targeting, positioning:
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product
price
promotion
distribution, service, R&D and marketing research.
Action Programs
 Projected Profit-and-Loss Statement
 Controls
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MARKETING PLANNING IN
THE 2000s
Customer and Competitor Oriented
 More Realistic
 Team Approach
 Top Management Involvement
 Continuing Process
 Cover shorter term (one year and so)
 Some Take Seriously, others use as a
guideline
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