Professional Documents
Culture Documents
External
Audit
Internal
Audit
Alternative Strategies
Strategy Selection
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STRATEGIC MARKETING
Issues in
Strategy
Formulation
4
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Strategy
Implementation
Annual Objectives
Policies
Employee Motivation
Resource Allocation
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Strategy
Implementation
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Strategy
Evaluation
Internal Review
External Review
Performance Metrics
Corrective Actions
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Strategy
Evaluation
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Strategic Marketing - Plan
Model
1 . Identify Existing
•Vision
•Mission
•Objectives
•Strategies
•
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Strategic Marketing - Plan
Model
2 . Audit external environment
3 . Audit internal environment
4 . Establish long - term objectives
5 . Generate , evaluate , and select
strategies
6 . Implement selected strategies
7 . Measure & evaluate performance
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Chapter 1
ION & VISION STATEM
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Vision
“ What do we want to
become? ”
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Vision
Clear
Business
Vision
Comprehensive
Mission
Statement
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Vision Statement
Examples
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Vision Statement
Examples
PepsiCo’s responsibility is to
continually improve all aspects of
the world in which we operate –
environment, social, economic –
creating a better tomorrow than
today.
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Vision Statement
Examples
Dell’s vision is to create a company
culture where environmental
excellence is second nature.
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Mission Statements
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Mission Statements
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Mission Statements
Also referred to as :
•Creed statement
•Statement of purpose
•Statement of philosophy
•Statement of business principles
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Mission Statements
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2 . Produ
cts or 3 . Marke
1 . Custo Servic ts
mers es
4 . Techn
Mission ology
9 . Emplo
yees Components
5 . Survi
val ,
8 . Publi Growth ,
c Profit
Image 7 . Self - 6 . Philo s
Concep sophy
t
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Mission Statement
Examples
We aspire to make PepsiCo the world’s(3)
premier consumer products company, focused on
convenient foods and beverages(2). We seek to
produce healthy financial rewards for
investors(5) as we provide opportunities for
growth and enrichment to our employees(9), our
business partners and the communities(8) in
which we operate. And in everything we do, we
strive to act with honesty, openness, fairness
and integrity(6).
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Mission Statement
Examples
Dell’s mission is to be the most successful
computer company(2) in the world(3) at
delivering the best customer experience in
markets we serve(1). In doing so, Dell will
meet consumer expectations of highest
quality; leading technology(4); competitive
pricing; individual and company
accountability(6); best-in-class service and
support(7); flexible customization
capability(7); superior corporate
citizenship(8); financial stability(5).
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Mission Statement
Examples
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Chapter 2
EXTERNAL ANALYSIS
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External Assessment
Purpose of External
Audit
–Identify
•Opportunities
•Threats
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Purpose of External
Audit
–Identify
•Opportunities
•Threats
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•Price competitiveness
•Technological advancements
•Interest rates
•Pollution abatement
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Performing External Audit
Measurable
External
Factors Applicable to
Competing Firms
Hierarchical
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Industrial Organization
( I / O ) View
Industry
Properties
Economies of Scale
Product Differentiation
Level of Competitiveness
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Social , Cultural ,
Demographic , and
Environmental Forces
Major Impact –
•Products
•Services
•Markets
•Customers
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Social , Cultural ,
Demographic , and
Environmental Forces
Facts
•World population approaching 7
billion
•World population = 8 billion
by 2028
•World population = 9 billion
by 2054
•U.S. population < 300 million
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Social, Cultural, Demographic, and
Environmental Forces
•Trends
–More American households with people
living alone
–Aging Americans – affects all
organizations
–Population shift to the south and west
–Decimation and degradation of the
natural environment
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Social , Cultural ,
Demographic , and
Environmental Forces
Global trends
•China’s labor rates less than Mexico
•China provides more site location
incentives than Mexico
Childbearing rates
Actuarial Rates
Consumer Behavior
Ethical Concerns
Monitor Key
Variables
Attitudes Toward Saving
Racial Equality
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Governmental Regulation
Monitor Key
Variables Attitudes Toward Customer
Service
Waste Management
Endangered Species
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Political , Governmental ,
and Legal Forces
Government Regulation
Key opportunities &
threats
nAntitrust legislation
nTax rates
nLobbying efforts
nPatent laws
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Key Political , Governmental , and Legal
Variables
Regulation/deregulati
on
Tax law changes
Special
tariffs
Voter participation
rates
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Key Political , Governmental , and Legal
Variables ( cont ’ d )
Number of patents
Government subsidies
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Key Political , Governmental , and Legal
Variables ( cont ’ d )
Anti-trust enforcement
Global relationships
Import/export regulations
Political conditions
Technological Forces
Major Impact –
•Internet
•Communication
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Competitive Forces
Their strengths
Their weaknesses
Competitive Forces
7 Characteristics of Most
Competitive U . S . Firms :
Competitive Forces
7 Characteristics of Most
Competitive U . S . Firms :
5 . Acquisition is essential to
growth
6 . People make a difference
7 . No substitute for quality
Potential Development of
Substitute Products
Important –
CPM
•Competitive profile matrix is an essential
strategic management
tool to compare the firm with the major
players of the industry .
Rating
Rating in CPM represent the response of firm toward the critical
success factors. Highest the rating better the response of the firm
towards the critical success factor ,rating range from 1.0 to 4.0 and
can be applied to any factor. There are some important point related
to rating in CPM.
Rating is applied to each factor.
•The response is poor represented by 1 . 0
•The response is average is represented by 2 . 0
•The response is above average represented by 3 . 0
•The response is superior represented by 4 . 0
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CPM ( Conti …)
Weight
Weight attribute in CPM indicates the relative importance of factor to
being successful in the firm’s industry. The weight range from 0.0
means not important and 1.0 means important, sum of all assigned weight
to factors must be equal to 1.0 otherwise the calculation would not be
consider correct.
Weighted Score
Weighted score value is the result achieved after multiplying each
factor rating with the weight.
Important –
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Chapter 3
INTERNAL ANALYSIS
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Chapter Outline
The Nature of an Internal Audit
Management
Marketing
Opportunity Analysis
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Chapter Outline (cont’d)
Finance/Accounting
Production/Operations
Distinctive Competencies :
Distinctive Competencies :
1.Physical resources
2.Human resources
3.Organizational resources
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U.S. Versus Foreign Cultures
Functions of Management
1.Planning
2.Organizing
3.Motivating
4.Staffing
5.Controlling
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Management
Stage When Most
Function Important
Planning
Forecasting
Establishing objectives
Developing policies
Setting goals
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Management
Organizing
Organizational design
Job specialization
Job descriptions
Job specifications
Organizing Span of control
Unity of command
Coordination
Job design
Job analysis
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Management
Motivating
Leadership
Communication
Work groups
Motivating Job enrichment
Job satisfaction
Needs fulfillment
Organizational change
Morale
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Management
Staffing
§Personnel management
§Human resource management
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Management
Controlling
Quality
Financial
Sales
Controlling Inventory
Expense
Rewards
Sanctions
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Marketing
1.Defining
2.Anticipating
3.Creating
4.Fulfilling
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Marketing
Marketing Functions
1 . Customer analysis
2 . Selling products / services
3 . Product & service planning
4 . Pricing
5 . Distribution
6 . Marketing research
7 . Opportunity analysis
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Marketing
Customer surveys
Consumer information
Market positioning
Customer strategies
Analysis
Customer profiles
Market segmentation
strategies
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Marketing
Advertising
Sales
Selling Promotion
Products / Services Publicity
Sales force management
Customer relations
Dealer relations
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Marketing
Test marketing
Brand positioning
Planning Devising warrantees
Product / Service Packaging
Product features/options
Product style
Quality
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Marketing
Forward integration
Pricing Discounts
Credit terms
Costs
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Marketing
Warehousing
Channels
Distribution
Coverage
Retail site locations
Sales territories
Inventory levels
Transportation
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Marketing
Data collection
Marketing Data input
Research Data analysis
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Marketing
Assessing costs
Assessing benefits
Opportunity
Analysis Assessing risks
Cost/benefit/risk
analysis
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Marketing
Opportunity Analysis
Marketing
Opportunity Analysis
Production/Operations Functions
§Process
§Capacity
§Inventory
§Workforce
§Quality
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Purpose
Internal Factors
Internal factors are extracted after deep internal analysis of the company. Internal factors are
divided into two categories namely strengths and weaknesses.
Strengths: Strengths are the strong areas or attribute of the company, which are used to
overcome weakness and capitalize to take advantage of the external opportunities available in the
industry.
Weakness: These are the weak factors which needs to be improved in future otherwise if they
exposed to the competitors they can take the advantage of it.
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Rating
The range of rating starts from minimum 1.0 which is worst and maximum 4.0 which is the
best factor of the company.
Rating is applied to each factor.
Major weakness is represented by 1.0
Minor weakness is represented by 2.0
Minor strength represented by 3.0
Major Strength represented by 4.0
Weight
Weight attribute in IFE matrix indicates the relative importance of factor to being successful in
the firm’s industry. The weight range from 0.0 means not important and 1.0 means important,
sum of all assigned weight to factors must be equal to 1.0 otherwise the calculation would not be
consider correct.
Weighted Score
Weighted score value is the result achieved after multiplying each factor rating with the weight.
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Total Weighted Score
The sum of all weighted score is equal to the total weighted score, final value of total weighted
score should be between range 1.0 (low) to 4.0(high). The average weighted score for IFE
matrix is 2.5, any company total weighted score fall below 2.5 consider as weak. The company
total weighted score higher then 2.5 is consider as strong in position.
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Steps to develop IFE Matrix
1.List key internal factors as identified in the internal audit process. Use a total of from ten to
twenty internal factors, including both strengths and weaknesses. List strengths first
and then weaknesses. Be as specific as possible, using percentages, ratios, and comparative
numbers.
2.Assign a weight that ranges from 0.0 (not important) to 1.0 (all important)to each factor.
The weight assigned to a given factor indicates the relative importance of the factor to being
successful in the firm’s industry. The sum of all weights must equal 1.0.
3.Assign a 1 to 4 rating to each factor to indicate whether that factor represents a major
weakness (rating = 1), a minor weakness (rating = 2), a minor strength (rating = 3), or a
major strength (rating = 4). Note that strengths must receive a 4 or 3 rating and
weaknesses must receive a 1 or 2 rating. Ratings are thus company based, whereas the
weights in Step 2 are industry based.
4.Multiply each factor’s weight by its rating to determine a weighted score for each variable.
5. Sum the weighted scores for each variable to determine the total weighted score for the
organization.
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There are few examples of internal factors of the company.
Strengths
qStrong marketing and promotion
qBest product quality
qStrong Financial condition
qHigh Market Share
qHigh value assets
Weakness
qHigh cost operations
qManufacturing cost is high
qHigh employee turnover rate
qExpensive products
qLoss in joint venture
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Chapter 4
STRATEGIES IN ACTION
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Types of Strategies
Forward
Integration
Vertical
Integrati Backward
on Integration
Strategie
s
Horizontal
Integration
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Forward Southwest Airlines selling tickets
Integration through Galileo
Market
Penetration
Intensive Market
Strategie Development
s
Product
Development
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Market McDonald’s selling millions of “Shrek
Penetration the Third” items to a healthier image
Related
Diversificati
on
Diversifi
cation
Strategie
s
Unrelated
Diversificati
on
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Related MGM Mirage is opening its first non-
Diversification casino luxury hotel
Retrenchment
Defensive
Strategie Divestiture
s
Liquidation
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1. Market Leader: Maintain your position as market leader in one of three ways.
First; expand the total market by increasing the total number of users.
Second; defend your current share of the market. You can enhance your product offerings,
as in as a supermarket adding banking services or video rental. Another option is to reduce
weak products or services and build up the strongest ones.
Third; expand your market share by aggressively attacking your competitor through a
variety of strategies. Offer coupons, promote sales and advertise benefits your competitor
doesn't have, such as longer shop hours or more personalized service.
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2. Market Challenger: If you are the challenger in the market, look for a small, unmet need
that your business can fill. (Daihatsu Cuore)
4. Market Niche: Becoming a niche marketer enables you to research and respond better to a
smaller, fine-tuned segment. This works especially well for small companies who are nimble
and able to make quick decisions in reaction to market trends. Serve the demographic of
women ages 55 to 70. As a consultant, choose the niche of selling only to engineering
consulting firms in the $3 to $5 million revenue range.
2. Cash Cow: Cash cows are low growth but high market share (Market leader) businesses or
products.
Their high earnings, coupled with their depreciation, represent high cash inflows and they need
very little in the way of reinvestment. And thus, they are the net provider of cash. Surplus cash
are used for Research and Development and to support other SBUs that need investment.
C. Question mark: Products in a growth market with low market share are categorized as
Question Mark.
Because of growth, these SBUs require a lot of cash to hold their market share and let alone to
increase it. If nothing is done to increase the market share, a Question mark will simply absorb
large amount of cash in the short run and later, as growth slow down, become a dog. Thus, unless
something is done to change its perspective, it becomes a cash trap.
Management has to decide which question marks should try to build into stars and which should
be phased out.
D. Dog: Dog are low growths, low market share SBUs. They may generate enough cash to
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BCG Growth Share Matrix
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