This document discusses corporate and divisional level strategic planning. It covers defining the corporate mission and objectives, establishing strategic business units (SBUs), and models for assigning resources to SBUs including the BCG matrix and GE/McKinsey model. The BCG matrix classifies SBUs into Stars, Cash Cows, Question Marks, and Dogs based on market growth and share. The GE model evaluates SBUs based on their market attractiveness and business strength to determine whether to invest, protect, harvest, or divest resources.

1. Corporate Division Plan, Business
Unit Plan, Assigning Resource to
SBU, BCG Model, GE Model
Group Members:-
Pukar K.C
Pinky Giri
Swechha Aryal

2. Corporate And Divisional Level
Strategic Planning
A corporate level strategic marketing plan is prepared to
guide the marketing efforts within the organization.
Features:-
• Prepared with a medium-term perspective(two to three
years) focused on achieving corporate missions.
• Anticipates changes in the macro environment forces.

3. The Corporate Level Planning is centered
at four major activities:
Defining the corporate
mission
Assigning growth
opportunities
Assigning resources to
each SBU
Establishing strategic
business units

4.  It is a mission statement that describes the company's
business, its objectives and its approach to reach those
objectives.
 A vision statement that describes future position of the
company.
 Defines what an organization is, why it exists and its
reason for being.
Defining Corporate Mission

5. Corporate Mission Pyramid

6. Corporate Objectives:
 Statement of intent that provide the basic direction for the
activities of an organization in pursuit of its mission.
 It is a set to guide the organization as a whole.
 Framework for designing corporate strategy.
 Focus on the desired performance and results of the business.
 Fundamental to performance enhancing strategic planning.

7. Corporate Strategy
 Overall scope and direction of a company.
 Long term vision that an organization set, seeking to
create corporate value and motivate the workforce.
 Concerned with how companies create value across
different business.
 Includes competitive strategy, growth strategy and
strategy for sustainable competitive advantage.

8.  A strategic business unit, popularly known as SBU, is a fully –
functional unit of a business that has its own vision and
direction.
 It operates as an independent entity, but it has to report
directly to the headquarters of the organization about the
status of its operation.
 A profit center that operates independently and is focused on
a target market.
 Works best for organizations which have multiple product
structure.
 Examples: Proctor and Gamble, LG etc.
Defining Strategic Business Units

9. Graphical Presentation of Strategic
Business Unit (SBU)
SBU 3SBU 2SBU 1
Corporate Head Office
 R & D
 Sales
 Marketing
 Accounting
 Finance
 Logistics
 R & D
 Sales
 Marketing
 Accounting
 Finance
 Logistics
 R & D
 Sales
 Marketing
 Accounting
 Finance
 Logistics

10. Features of SBU
• Separate Management and strategy formulation.
• Separate Competitors.
• Separate Customers.
• Generally engaged in single business of a large group.
Advantages of SBU
• Supports cooperation between departments.
• Improvement of strategic management.
• Easier planning of activities.
Disadvantages of SBU
• Difficulty to contact with higher management.
• Causes internal conflict due to difficult access to funding.

11. Identification of SBU
Product Need Technology
• Manufactured
products
• Traditional
approach
• Needs served
in the market
• More advanced
approach
• Type of
technology
used
• Modern
approach

13. Assigning Resources to SBU
 Resources: Productive factor used by organization to generate revenue.
 Types of resources
Physical : Assets, Distribution Networks, Raw materials
Intellectual : Brands, Copyrights, Customer database
Human : Employees, Managers, Experts, Labor
Financial : Cash, Debts, Loans
 Assigning of resources is a well-planned process used for optimum
utilization of resource in best possible way.
 It is based on objectives, managerial requirements, internal policies and
external influences.
 Tools for assigning resources: SBU Model, BCG matrix and GE matrix.

14. SBU Model
 Large companies are very difficult to manage so they are divided into unit.
 SBU Model uses following 2 criteria for the division of units.
Competitive
Position
Industry
Maturity
 Leading
 Strong
 Favorable
 Tenable
 Weak
 Nonviable
 Embryonic
 Growth
 Maturity
 Aging

15. Competitive Position
1. Leading:-Dominates the market and influences other firms.
2. Strong:-Able to take independent strategic action.
3. Favorable:-Has more strong factors than weak factors.
4. Tenable:-Has critical balance of strength and weakness factors.
5. Weak:-Unsatisfactory performance and barely surviving.
6. Nonviable:-Dying group of SBU. Thrown out of market within a year.
Industry Maturity Stages
1. Embryonic:-Startup business with large costs and few sales.
2. Growth:-Accelerated sales & increasing competition.
3. Maturity:-Average growth. Longest phase.
4. Aging:-Declining growth. Demand for substitute products.

16. The SBU Model
CompetitivePosition
Embryonic Growing Matured Aging
Leading Build Build Build Build
Strong Build Build Build Maintain
Favorable Build Build Maintain Liquidate
Tenable Build Maintain Liquidate Liquidate
Weak Maintain Liquidate Liquidate Liquidate
Non-viable Liquidate Liquidate Liquidate Liquidate
Industry Maturity: Life Cycle
Suitable Strategies

17. BCG Matrix
 The BCG Growth-Share Matrix was developed by Bruce
Hendersonof the BOSTON CONSULTING GROUP IN THE
EARLY 1970’s.
 According to this technique, business units can be classified
into four categories.

19. STARS
 High Growth, High Market
Share.
 Generate Large Amount of
Cash Revenue
 Consume Large Amount of
Cash because of High Growth

20. CASH COWS
 Low Growth, High Market
Share.
 Leaders in a Mature
Market.
 They extract the profits by
investing as little cash as
possible.
 Generate relatively stable
cash flow.

21. DOGS
 Low growth, low market
share.
 Dogs are cash traps because
of money tied up in a
business with little potential.
 Neither generate or consume
cash.
 Business is situated at a
declining stage.

22. QUESTION MARKS
 High growth , Low market share
 They will absorb great amounts of cash if
the market share remains unchanged,
(low).
 Question marks have potential to become
star and eventually cash cow but can also
become a dog.
 Question Marks should be analyzed
carefully before investment.

23. Strategic Decisions in the BCG
Matrix.
 SBU’s have a life cycle in the growth
matrix.
 Most Start as question marks.
 They can become Stars with
sustained investments
 Eventually turn into Dogs
 Organizations has four Alternative
strategic investment options build,
hold, harvest and divest.

25. BENEFITS VS LIMITATIONS
 BCG MATRIX is simple and easy to
understand.
 It is used to identify how corporate
cash resources can best be used to
maximize a company’s future
growth and profitability.
 BCG MATRIX uses only two
dimensions, Relative market share
and market growth rate.
 High market share does not mean
profits all the time.
 Business with low market share can
be profitable too.

26. GENERAL ELECTRIC
(McKinsey) MODEL

27. HISTORY
 General Electric, a leading corporation in the
United States.
 Disappointed with the profit they had made
from their investment in various businesses.
 Developed by McKinsey & Company for
General Electric in 1970s.
 Developed to differentiate the potential for
future profit.

28. INTRODUCTION
 Technique used in brand marketing and product
management.
 Helps a company to decide what product to add to
its portfolio.
 Which market opportunities are worthy of continued
investment ?
 GE Factor not only considers growth, it mainly
considers market attractiveness and strength of a
business unit.
 It is a nine cell (3X3) matrix used to perform business
portfolio analysis as a step in the strategic planning
process

29. McKinsey/GE Model

30. DIMENSIONS OF GE MODEL
Market
Attractiveness
Business
Strength

31. • Is it beneficial for a company to enter and compete within the market ?
• Criteria which makes a market attractive :-
1. Market size
2. Growth rate
3. Industry profitability
4. Profit margins
5. Industry fluctuations
6. Variability of demand
7. Rate of technological change
8. Global opportunities
9. PEST factors
10.Government regulations
Market Attractiveness

32. • Helps to decide whether a company is competent enough to compete in the
given market(s).
• Factors that determine business strength:-
1. Current market share
2. Brand image
3. Production capacity
4. Corporate image
5. Profit margins relative to competitors
6. R&D performance
7. Promotional effectiveness
8. Distribution network
9. Service quality
Business Strength

33. STRATEGIC DECISION OF GE MODEL
 Invest: Investment is made in the market on the basis of
the existing market attractiveness in terms of growth.
 Protect: Protect condition refers to the situation where a
business doesn’t want fresh investment rather it is willing
to have the security of the given investment.
 Harvest: It refers to the situation where the business
wants to generate cash out of the given investment.
 Divest: Condition where a business organization has
finally decided to sell an undertaking or a part of its
undertaking.

34. ADVANTAGES
 Helps managers to think more strategically
 Helps to improve the performance of the business
 Helps in growth of business
 Provides information about strengths and
weaknesses
 Provides information about opportunities available
in the market

35. LIMITATIONS
 No hard and fast rule on how to weight factors
 Formulation of GE model/matrix is very
expensive.
 Time consuming.
 It requires a huge amount of data & research.
 Factors ranking is subjective and personal.
 Proper implementation of strategies are absent.