2. Learning Objectives
1. Explain company-wide strategic planning.
2. Understand the concepts of stakeholders,
processes, resources, and organization as
they relate to a high-performing business.
3. Explain the four planning activities of corporate
strategic planning.
4. Understand the processes involved in defining a
company’s mission and setting goals and
objectives.
5. Discuss how to design business portfolios and
growth strategies.
3. Market-Oriented Strategic
Planning
Market-oriented strategic planning is the managerial
process of developing and maintaining a feasible fit
between the organization’s objectives, skills and
resources and its changing market opportunities
The strategic plan provides the roadmap of where to go.
How does the marketing support the overall
objectives and mission of the company?
Major Challenge: Rapidly changing
marketplace and environment
4. Strategy Planning
Unique Challenges of the hotel industry
Major chains do not always own all properties
they manage
Owners of hotel-resorts often show little interest
or knowledge of their property
Professional managers often are not trained in
strategic planning, also has little power on owner
Hotel and secondary property within the hotel
Global strategic alliances may further complicate
the planning process
5. Nature of High-Performance
Business
Stakeholders
Who are they?
Set strategies to satisfy
Processes
Determine the optimal mix of segments
Create cross functional team leaders
Resources
Align resources with organization – determine
necessary sources to be successful and who can
provide them
Organization
Structure, policies & culture
6. An Example of Multidivisional Structure:
The Walt Disney Company
Source: The Walt Disney Company Annual Report
CEO
Walt Disney
Attractions
Walt Disney
Studios
Consumer
Products
Motion
Pictures
TV Animation
Disney
Channel
Magic
Kingdom
CA
Tokyo
Disneyland
Euro-
Disney
Walt
Disney
World
Disney
Stores
Licensing Publishing
Disney
Music
Software
and
Education
Catalog
Marketing
Magic
Kingdom
FL
Epcot
Center
Disney-
MGM
Studios
8. 1. Defining the company mission
1. Mission Statement – what is it?
2. Can’t be too narrow or broad
3. Operate on core competencies
4. Motivating
5. Life-Span of mission
2. Setting company objectives and goals
1. A hierarchy of objectives (detailed supporting objectives) for
each level of management
2. Based on guest wants (how do you know what guests want?)
3. Create broad strategies and then add details
3. Designing the business portfolio
1. Design to satisfy customer needs (customer-satisfying process),
not product
2. Focus on GROWTH
Corporate Strategic Planning
9. 1. Defining the Company’s Mission
Start from asking:
What is our business?
Who is the customer?
What do customers value?
What should our business be?
The Answer: A Mission Statement
A statement of the organization’s purpose – what it wants to
accomplish in the larger environment.
Define business by need rather than product.
10. Market-oriented Business Definitions
Company Product-Oriented
Definition
Market-Oriented Definition
Disney We run theme parks We create fantasies—a place
where America still works the
way it’s supposed to.
Wal-Mart We run discount stores We deliver value through low
prices to Middle Americans.
Ritz-
Carlton
Hotels
We rent rooms We create the Ritz-Carlton
experience—one which
enlivens the senses, instills
well-being, and fulfills even
the unexpressed wishes and
needs of our guests.
12. Establishing Strategic Business Units (SBUs)
A single business or a collection of related
businesses that can be planned for separately
from the rest of the company
It has its own set of competitors
It has a manager who is responsible for strategic
planning and profit performance
Designing the Business Portfolio
13. 13
1. Market
Penetration
2. Market
Development
3. Product
Development
4. Diversification
Existing
Markets
New
Markets
Existing
Products
New
Products
Product/ Market Expansion Grid
Intensive Growth
14. 14
Question Marks
• High growth, low share
• Build into Stars or phase out
• Require cash to hold
market share
Question Marks
• High growth, low share
• Build into Stars or phase out
• Require cash to hold
market share
Stars
• High growth & share
• Profit potential
• May need heavy
investment to grow
Cash Cows
• Low growth, high share
• Established, successful
SBU’s
•Produce cash
Cash Cows
• Low growth, high share
• Established, successful
SBU’s
•Produce cash
Dogs
• Low growth & share
• Low profit potential
Dogs
• Low growth & share
• Low profit potential
Relative Market Share
High Low
MarketGrowthRate
LowHigh
Analyzing Current SBU’s:
Boston Consulting Group Approach
?
15. GROWTH
Intensive growth: seeking opportunities for
current businesses
Integrative growth: seeking opportunities
related to current businesses
Backward integration (acquiring a supplier)
Forward integration (acquiring distributor of your
product)
Horizontal integration (acquiring a competitor)
Diversification growth: seeking opportunities
unrelated to current businesses
Concentric diversification strategy
Horizontal diversification strategy
Conglomerate diversification strategy
16. Customer-Driven Marketing Strategy and
Marketing Mix
Market segmentation
Market targeting
Market differentiation and positioning
From 4Ps to 4Cs
Product vs. customer solution
Price vs. customer cost
Place vs. convenience
Promotion vs. communication 16
17. Review
1. Strategic planning.
2. Stakeholders, processes, resources, and
organization
3. Four planning activities of corporate
strategic planning.
4. The processes involved in defining a
company’s mission and setting goals and
objectives.
5. Business portfolios and growth
strategies.
18. Business Strategy Planning
Business Mission
SWOT Analysis
Internal Environment Analysis
External Environmental Analysis
Goal Formulation (What do we want?)
Three Performances Measures (Return, Operating
margins, and REVPAR)
Strategy Formulation (How do we get there?)
Strategies Alliances
Program formulation
Implementation
Feedback and Control
19. Preparing a Marketing Plan
I. Executive Summary
II. Corporate Connection
III. Positioning Statement
IV. Environmental Analysis and Forecasting
V. Segmentation and Targeting
VI. Next Year’s Objectives
VII. Action Plans
VIII. Resources Needed to Support Strategies and Meet
Objectives
IX. Marketing Control
X. Presenting and Selling the Plan
XI. Preparing for the Future
Editor's Notes
American airlines in One World with British airways and Cathay Pacific
United Airways in the star alliance with Singapore airlines, Air Canada.
In the past, stockholders were the main stakeholders.
Company work is carried out by each department. However, departmental organization has some problems. Departments typically work to achieve their own goals
Characteristics of a high-performance business
Stakeholders
Traditionally, most businesses focused on their stockholders
Today businesses increasingly recognize that they must nurture other stakeholders, including customers, employees, suppliers, and the communities where their businesses are located
Processes
Companies are increasingly refocusing their attention on the need to manage processes even more than departments
They are studying how tasks pass from department to department as well as the impediments to creative output
They are now building cross-functional teams that manage core business processes
Resources
To carry out processes, a company needs such resources as personnel, materials, machines, and information
More companies today have decided to outsource less critical sources
Organization
Companies must work hard to align their organization’s structure, policies, and culture to the changing requirements of business strategy
Many organizations develop formal mission statements that answer these questions
A mission statement is a statement of the organization’s purpose—what it wants to accomplish in the larger environment
Management should avoid making a mission too narrow or too broad
The mission should be based on a company’s distinctive competencies
A clear mission statement acts like an “invisible hand” that guides people in the organization
Studies have shown that firms with well-crafted mission statements have better organizational and financial performance
Yum: KFC Pizza hut, and Taco Bell
Growth is important. Growth helps companies to compete and to attract top talent. Companies need to be careful when pursuing growth because growth should not be an objective. The goal or objective should be profitable growth.
When a market’s annual growth rate falls to less than 10%. It falls into cash cows. Still the market leader. Support star business, question marks, and dog.
Your objective: build, hold, harvest (increase short-term cash flow regardless of the long-term effect). Divest (sell or liquidate the business).
Integrative Growth
Opportunities in diversification, market development, and product development can be seized through integrating backward, forward, or horizontally within that business’s industry
Backward integration
Acquiring a suppliers, such as a food distributor
Forward Integration
Acquiring tour wholesalers or travel agents
Horizontal Integration
Acquiring one or more competitors, provided that the government does not bar the move
Diversification Growth
Makes sense when good opportunities can be found outside the present businesses
Concentric Diversification Strategy
Seeking new products that have technological or marketing synergies with existing product lines
Horizontal Diversification Strategy
Searching for new products that could appeal to its current customers, Hotels and restaurants selling gift items
Conglomerate Diversification Strategy
Seeking new businesses that have no relationship to the company’s current technology, products, or markets
