Business strategic planning and corporate strategic planning

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Business strategic planning and corporate strategic planning

  1. 1. MARKETING STRATEGY AND PLANNING UNIT - III
  2. 2. CORPORATE STRATEGIC PLANNING: All co-operate head quarters undertake 4 planning activities: I. II. III. IV. Defining the corporate mission Establishing strategic business units [SBU’S] Assigning resources to each SBU Planning new business & down sizing older business
  3. 3. I. Defining the corporate mission: 1. 2. 3. • • • • • • Mission statements are at their best when they are guided by a vision and almost impossible dream. Good mission statements have 3 major characteristics: Should focus on a limited number of goods. Stress the major policies & values that the company wants to honor. They define major competitive scopes within which the company will operate Industry scope Product & applications scope Market segment scope Competence scope Vertical scope Geographical scope
  4. 4. II. Establishing strategic business units [ SBU’S]: Establish customer satisfying not good producing process. A business can be defined in terms of 3 dimensions: 1. Customer groups 2. Customer needs 3. Technology A SBU has 3 features: • • • It is a single business or collection of related business that can be planned separately from the rest of the company. It has its own set of competitors It has a manager who is responsible for strategic planning & profit performance.
  5. 5. III. Assigning resources to each SBU: We call this model as business portfolio evaluation models.  BCG Model [ Boston consultancy group model]  GE Model [ General electric model ]  Growth – share matrix BCG Model: ***** high STARS { Invest more on stars} [ positive] Market growth rate low CASH COWS { Exist longer period of time } high ????? QUESTION MARKS {Doubtful products } DOGS { Minimize the dogs } [ negative ] Relative market share low
  6. 6. The companies next task is to determine what objective, strategy & budget to assign to each SBU. Four strategies can be pursued. 1. 2. 3. 4. BUILD [ Cash cows] HOLD [ Stars] HARVEST [ Question marks] DIVEST [ Dogs] IV. Planning new business & down sizing older business: Planning new business: • Intensive growth opportunities [ To identify the opportunities to achieve future growth] • Integrative growth opportunities • Diversification growth opportunities [ To identify opportunities, attractive business that are unrelated to companies current business]
  7. 7. Down sizing older business: To reduce cost business should also carefully prune, harvest or divest tired old businesses in order to release needed resources. Marketing strategy: Current product Current Markets New Markets MARKET PENETRATION STRATEGY MARKET DEVELOPMENT STRATEGY New products PRODUCT DEVELOPMENT STRATEGY DIVERSIFICATION STRATEGY Add new Features To the Product Nature Of the product
  8. 8. 7’s Model – [ Mc. Kinsey’s] STRUCTURE STRATEGY SYSTEMS SHARED VALUES SKILLS STYLE STAFF
  9. 9. BUSINESS STRATEGIC PLANNING { PROCESS } External environment Goal formulation Business mission Strategy formulation SWOT analysis Implementation Internal environment Feed back & control Program formulation
  10. 10. GOAL FORMULATION: Probability, sales, growth, risk containment, innovation, reputation, market share improvement are the objectives. • Objectives must be arranged Hierarchically. • Objectives must be stated Quantitatively. • Goals should be realistic. • The companies objectives must be consistent. Objectives can be:  Short term profit v/s long term profit.  Deep penetration of existing market v/s developing new markets.  Profit goal v/s non – profit goal.  High growth v/s low risk.
  11. 11. STRATEGY FORMULATION: Every business must tailor a strategy for achieving its goals consisting of a marketing strategy, compatible technology strategy & sourcing strategy. MICHAEL E. PORTER’S GENERIC MARKETING STRATEGY: [ Father of generic management] Over all cost Relationship Focus Differentiation •Style leader •Quality leader •Service Differentiation Focus Cost focus
  12. 12. STRATEGIC ALLIANCES:  Product or service alliance  Promotional alliance  Logistic alliance  Pricing collaboration PROGRAM FORMULATION { ABC – Activity based costing } IMPLEMENTATION: Mc. Kinsey’s 7’s frame work • Strategy, systems, structure are hardware of success. • Style, skills, staff & shared values are software of success FEEDBACK & CONTROL – Efficiency & effectiveness
  13. 13. THE MARKETING PROCESS: 1. The value delivery sequence. 2. Segmentation, Targeting, Positioning [ STP strategy]. 3. Zero customer feedback time. 4. Zero product improvement time. 5. Zero purchasing time [ JIT – Just – in – time] 6. Zero set up time. 7. Zero defects.
  14. 14. Steps in the marketing planning process: 1. Analyzing market opportunities. 2. Developing market strategies. 3. Planning the marketing programs. 4. Managing the marketing effort. 5. • • • Marketing control. Annual plan control Profitability control Strategic control
  15. 15. CONTENTS OF MARKETING PLAN: 1. Executive summary & table of the contents. 2. Current marketing situation. 3. Opportunities & issue analysis. 4. Objectives. 5. Marketing strategy. 6. Action programs [planning] 7. Projected profit & loss statements. 8. Controls [marketing]

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