#3 Rawan Hossam

Strategic planning: process of developing and maintaining a strategic t between the

organization’s goals and capabilities and its changing marketing opportunities.

Steps in strategic planning:

1. De ning the company mission

2. Setting company objectives and goals
3. Designing the business portfolio
4. Planning marketing and other functional strategies

1. De ning the company mission

Mission statement: is the organizations purpose; what it wants to accomplish in the environment

Answers the following questions:

Whats our business, who is the customer. What do the consumer value, what should our business
be?

*a mission statement must be market-oriented to de ne the business in terms of satisying basic

customer needs.

2. Setting company objectives and goals

The company needs to turn its mission statement into detailed supporting objectives for each level
of management
Business objectives: build long-term relationships, invest in research, improve pro ts
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3. Designing the business portfolio

Its the collection of businesses and products that make up the company.
Portfolio analysis: major activity in strategic planning, whereby management evaluates the
products and businesses that make up the company

Strategic business unit ( SBU ): unit if the company that has a separate mission, and objectives
that can be planned separately from the other company businesses.
- Company division
- Product line within a division
- Single product or brand

Brand portfolio planning involves 2 steps:

1. The company must analyze the current business portfolio and determine which businesses
should receive ,ore, less or no investment.
2. The company must shape the future portfolio by developing strategies for growth and
downsizing

Amazon SBUs are:

- Amazon web Services (AWS) - Amazon Logistics
- Amazon Retail
- Amazon Entertainment

Designing a business portfolio:

1. Analyzing current business portfolio:

Identify strategic business unit SBU -> assess the attractiveness of the various SBUs -> Decide
how much support each SBU deserves

The Boston consulting group (BCG) approach/growth-share matrix: is a portfolio planning

method that evaluates company’s SBU in terms of market growth rate and relative market share.

Market growth rate: a measure of attractiveness of the overall market.

Relative market share: measure of SBU’s strengths in the market relative to competitors.

High growth, High share: businesses or products requiring heavy

investments to nance rapid growth. They will eventually turn into
cash cows

High growth, Low share: businesses requiring an assessment

either to make heavy investment to build into stars or to phase out.

Low growth, High share: Successful businesses or products

requiring less investment. Cash cows should be milked to reinvest
in other potential SBUs.

Low growth, Low share: businesses or products that may

generate enough cash to maintain themselves but don’t promise to
be large sources of cash. Dogs should be divested

After classifying SBUs, company must decide what role each will play in the
future:
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Problems with matrix approaches:

- Di culty in de ning SBUs and measuring market share and growth
- Time consuming
- Expensive
- Focus on current businesses, not future planning
2. Developing strategies for growth and downsizing:

Anso ’s product/market grid: portfolio planning tool for identifying growth

opportunities through looking at new products, existing products, new
markets, and existing markets for company growth opportunities.

Downsizing: the reducing of the business portfolio by eliminating products or business units that
are not pro table or that no longer t the company’s overall strategy.

P&G is keeping around 70 to 80 brands only as these make up 90% of its sales.
"We're going to create a faster growing, more pro table company that is far simpler to manage
and operate. This will enable P&G people to be more agile and responsive. More exible and
faster. Less will be much more."

4. Planning marketing and other functional strategies

Value chain: series of departments that carry out value-created activities to design, produce,
market, deliver, and support a rms products

Carrefour’s goal is to create customer value and satisfaction by providing shoppers with the
products they want and lowest possible price

Value delivery network: made up of the company suppliers, distributers, and ultimately customers
who partner with each other to improve performance of the entire system

Marketing strategy: the marketing logic by which the company hopes to create customer value
and achieve pro table customer relationships

It involves 2 questions:
1.which customers will we serve? [ segmentation and targeting ]
2. How can we best serve these customers [ di erentiation ]

Marketing segmentation: dividing the markets into segments of

customers
Marketing targeting: evaluation each market segments
attractiveness and selecting one or more segments to enter.
Market positioning: arranging for a product to occupy a clear
distinctive and desirable place relative to competing products in
the mind of the target consumers.
Marketing mix: set of controllable, tactical marketing tool-
product, price, place, promotion- that the rm blends to produce
the response it wants in the target market.
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For services, marketing mix is extended to 7Ps instead of 4Ps:

1. People
2. Process
3. Physical evidence

SWOT analysis: stands for: strengths, weaknesses, opportunities and threats

Strengths and weaknesses are internal factors
Opportunities and threats are external factors

Strengths : internal capabilities that may help a company reach its objectives.

Weaknesses: Internal limitations that may interfere with a company’s ability to achieve its
objectives

Opportunities: external factors that the company may be able to exploit to its advantages.

Threats: current and emerging external factors that may challenge the company’s performance.

Eg: