Chapter13 Strategic Planning Fs PDF

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Copyright © 2014 by McGraw Hill Education (India) Private Limited. All rights reserved. Copyright © 2014 by McGraw Hill Education (India) Private Limited. All rights reserved.
Implementation, and
Control in Business
MARKETING
B USINESS
KRISHNA K HAVALDAR
Marketing
Planning,
Text and Cases
Chapter 13
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Chapter Questions
Copyright © 2014 by McGraw Hill Education (India) Private Limited. All rights reserved.
• What are the characteristics of market – oriented organizations?
• What is the role of marketing in strategic planning?
• How strategic planning is done at corporate and business unit
levels?
• How to develop marketing opportunities & threats?
• What is the impact of five competitive forces on profit
performance?
• What is the role of strategic alliances?
• How to develop and implement marketing plan?
• What are the types of marketing control and steps involved in
the control process?
3
Characteristics of Market-
Oriented Organisations
• Characteristics of such firms:
– Staying close to customers and ahead of competitors
– Understanding business purpose of attracting and satisfying
customers at a profit
• Market –orientation achieved by the following:

– Shared value of customer focus
– Integrated organisation to provide superior customer value
– Market driven strategy
– Understanding needs/expectations of stakeholders
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Role of Marketing (ROM) in
Strategic Planning
• At three organisational levels, ROM is as follows:
– Corporate level (Strategic management)
• Provide customer and competition information
• Advocate customer orientation
– Business unit/SBU (Strategic Business Unit) level (Strategic
management)
• Provide customer and competition analysis.
• Develop competitive advantage, STP (segmenting, targeting and
positioning), and product strategies
– Functional (Operations management)
• Evolve and implement marketing-mix strategies
• Coordinate marketing and related activities
• Allocate resources 5
Strategic Planning at Corporate

Level
• Major steps involved:
1. Developing corporate mission and objectives.
– Mission indicates purpose of existence and direction
– Objectives include profitability, sales growth, innovativeness, etc.
2. Defining strategic business units (SBUs)
– For managing them strategically
– SBU head responsible for long and short term objectives
3. Allocating resources to SBUs / business units
– To assist decision making on resource allocation use BCG or GE
model
4. Developing corporate strategies (see next slide)
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3
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GE Model
High
Invest Invest
Company’s Strengths
Med
Divest a Invest
Low
Divest Divest
Low Med High
Segment Attractiveness
Exhibit 2.5
Alternative Corporate Growth Strategies
Current products New products
Market penetration Product development

strategies strategies
• Increase market share • Product improvements
markets
Current
• Increase product usage • Product-line extensions

Increase frequency of use • New products for same
Increase quantity used market
New applications
Market development Diversification strategies

strategies • Vertical integration
markets
Forward/backward integration
• Expand markets for
• Diversification into related
New
existing products businesses

Geographic expansion (concentric diversification)
Target new segments • Diversification into unrelated
businesses
(conglomerate diversification)
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Exhibit 2.6
BCG’s Market Growth Relative Share Matrix
High
Stars Question marks
5
2
4 1
Market 6
growth 3
rate
(in constant 10%
dollars) Cash cows Dogs
7
8 11 12
9 10 13
Low
10 0.1
1
Relative market share

Source: From Long Range Planning, Volume 10 (February 1977), Barry Hedley, “Strategy and the Business Portfolio,”
Copyright 1977, Elsevier Science. Reprinted with permission.
Strategic Planning at Corporate

Level
• Developing Corporate Strategies
– Three alternative strategies available:
• Intensive growth strategies (Ansoff’s model)
– Market-penetration strategy
– Market-development strategy
– Product-development strategy
• Integrative growth strategy

– Backward, forward, or horizontal integration strategies
• Diversification strategies
– Concentric, horizontal, conglomerate strategies
10
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Strategic Planning at Business
Unit Level
• Defining the business unit’s (or SBU’s) mission
• Scanning external environment (opportunities/threats
analysis)
• Analysing internal environment (strengths and
weaknesses analysis)
• Developing objectives and goals
• Formulating strategies to achieve objectives and goals
• Preparing programme or action plan from strategies
• Implementing strategies and action plan
• Monitoring results and taking corrective actions 11
Formulating Strategies at
Business Unit Level
• Porter’s three generic competitive strategies are:
– Overall cost leadership
– Differentiation
– Focus
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Developing Marketing
Opportunities and Threats
• A marketing opportunity is an area of buyer need in
which a company can perform profitably
An environmental threat is a challenge posed to a company by some

external environmental developments, and is determined by seriousness and
probability of occurrence
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Five Competitive Forces

• Porter recognized that five competitive forces

have an impact on an Industry’s profit potential
14
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Role of Strategic Alliance
• It has an important role in the strategy of leading companies
• What is a strategic alliance?
– It is a formal long-term linkage between two or more companies,
that pool investments, capabilities, and resources to achieve
agreed objectives
• Strategic reasons for alliances:
– To have access to markets and technology
– To achieve economies of scale
– To reduce risk and entry costs into new markets
– To introduce new products to markets quickly
• Factors contributing to success of strategic alliances:
– Trust and communication at various levels of firms
– Agreements on goals/objectives and strategies 15
Developing Business Marketing

Plan
• Marketing plan is output of marketing planning process:
– Analysing marketing opportunities
– Segmenting and selecting target market segments
– Developing marketing strategies
– Implementing and controlling marketing plan
• Written marketing plan document includes:

– Situational (environmental, market, competition, product) analysis
– SWOT and issue analysis
– Objectives/goals
– Marketing strategy
– Action plan
– Marketing budget
– Implementation and control
– Contingency plans 16
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Implementing a Marketing Plan
• A good marketing plan fails to achieve its objectives,

if poorly implemented
• Implementation of marketing plan includes:
– Converting marketing strategy into action plan
– Action plan identifies a person for each activity/action,
activity completion date (by when), and the cost
– Action plan is monitored regularly
– Get the right people
• Skills for effective implementation:
– Allocating, monitoring, organising, interacting
17
Marketing Control Process
• Includes the following four steps:

– Setting goals or performance standards
– Measuring actual performance
– Analysing deviations between actual and standard performance
and finding causes of deviations
– Taking corrective actions
• Types of marketing control

– Strategic: review long-term goals and effectiveness
– Annual-plan: examine if annual goals achieved
– Efficiency: find out how resources are used.
– Profitability: review where profits/losses made 18

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18-01-2019

• Market –orientation achieved by the following:

Role of Marketing (ROM) in

Strategic Planning at Corporate

Low Med High

Market penetration Product development

• Increase product usage • Product-line extensions

Market development Diversification strategies

existing products businesses

Relative market share

Strategic Planning at Corporate

• Integrative growth strategy

Strategic Planning at Business

An environmental threat is a challenge posed to a company by some

Five Competitive Forces

• Porter recognized that five competitive forces

Role of Strategic Alliance

Developing Business Marketing

• Written marketing plan document includes:

• A good marketing plan fails to achieve its objectives,

• Includes the following four steps:

• Types of marketing control

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