Company and Marketing Strategy

Chapter: 2

Companywide Strategic Planning

• Strategic Planning

The process of developing and maintaining a strategic fit between organization’s goal and capabilities and its changing marketing opportunities

- Sets stage for the rest of company’s planning

1) Annual Plans

2) Strategic Plans

Steps in Strategic Planning

Setting company objectives and goals

Defining the company’s mission

Designing the business portfolio

Planning marketing and other functional strategies

Business unit, product, and market levelCorporate

Level

Defining a Market-Oriented Mission

• Mission Statement

A statement of the organization’s purpose- what it wants to accomplish in the larger environment

- acts as an invisible hand

- Market oriented mission statement

- Meaningful, specific, yet motivating

- Mission should not state profits

Market Oriented Business Definitions

Company Market- Oriented

DefinitionWal- Mart “Save money, live better”

Life Insurance Corporation of India “Zindagi e saath bhi, zindagi ke baad bhi”

Google We help you organize the world’s information and make it universally accessible and useful

Nokia Connect people

Setting Company Objectives and Goals

• Turn mission into objectives

• How will you go about things

Designing the business portfolio

• Business Portfolio

The collection of businesses and products that make up the company

- Should be a best fit to company’s strengths and weaknesses to opportunities

Step: 1- Analyzing the current business portfolio

Step: 2- Future Portfolio

Analyzing the Current Business Portfolio

• The process by which management evaluates the products and businesses that make up the company

- identify the SBU’s

• Growth Share Matrix

A Portfolio- planning method that evaluates a company's strategic business units in terms of its market growth rate and relative market share. SBUs are classified as stars, cash cows, question marks, or dogs

BCG Growth Share Matrix

Cash Cow Dog

Star Question Mark

Relative market Share

Mar

ket

grow

th r

ate

High Low

Hig

hLo

w

BCG Growth Share Matrix Contd.

• Stars:

- High growth, High share

- Heavy Investment required to sustain share

- Will eventually turn in cash cows

• Cash Cows

- Low Growth, High Share

- Less investment

- a lot of cash produced

BCG Growth Share Matrix Contd.

• Question Marks

- Low share, High Growth

- A lot of investment to hold share

- Which too keep and which to let go

• Dogs

- Low Growth, Low share

- no large sources of cash

Problems with Matrix

• Difficult, time consuming and costly

• No advice on future

Developing strategies for growth and downsizing

• Identify, evaluate and select market opportunities and lay down strategies for capturing them

• Product/market expansion grid

A portfolio- planning tool for identifying company growth opportunities through market penetration, market development, product development, or diversification

The Product/Market Expansion Grid

Market

Penetration

Market

Development Diversification

Product

Development

Existing Products

New Products

Existing Markets

New Markets

The Product/Market Expansion Grid

• Market Penetration A Strategy for company growth by increasing

sales of current products to current market segments without changing the product

• Market Development A Strategy for company growth by identifying

and developing new market segments for current company products

The Product/Market Expansion Grid

• Product Development A strategy for company growth by offering

modified or new products to current market segments

• Diversification A strategy for company growth through starting

up or acquiring business outside the company's current products and markets

• Downsizing

Reducing the business portfolio by eliminating products of business units that are not profitable or that no longer fit the company's overall strategy