Mktg6 ie ch02_ppt
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1) The document provides an overview of strategic planning and marketing concepts including defining strategic business units, identifying strategic alternatives using matrices, describing elements of the marketing mix and target market strategies, and explaining the importance of implementation, evaluation, and control of the marketing plan. 2) Key learning outcomes are identified relating to strategic planning, developing a mission statement, conducting a situation analysis to identify competitive advantages, setting objectives, and techniques for effective strategic planning. 3) Various exhibits and examples are referenced to illustrate strategic concepts like Ansoff's matrix, the BCG matrix, target market selection, and the marketing mix.
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Mktg6 ie ch02_ppt
- 1. Lamb, Hair, McDaniel 2012-2013 CHAPTER 2 Copyright ©2012 by Cengage Learning Inc. All rights reserved 1 1 © iStockphoto.com/Dem10 Chapter 1 © AP IMAGES/JENNIFER GRAYLOCK Strategic Planning for Competitive Advantage
- 2. Learning Outcomes 1 Understand the importance of strategic planning 2 Define strategic business units (SBUs) 3 Identify strategic alternatives and know a basic outline for a marketing plan 4 Develop an appropriate business mission statement 5 Describe the components of a situation analysis 6 Identify sources of competitive advantage 2
- 3. Learning Outcomes 7 Explain the criteria for stating good marketing objectives 8 Discuss target market strategies 9 Describe the elements of the marketing mix 10 Explain why implementation, evaluation, and control of the marketing plan are necessary 11 Identify several techniques that help make strategic planning effective 3
- 4. The Nature of Strategic Planning Understand the importance of strategic marketing and know a basic outline for a marketing plan 1 © 2013 by Cengage Learning Inc. All Rights Reserved. 4
- 5. Strategic Marketing Management What is the organization’s main activity? How will it reach its goals? The answer is by examining: • SBUs • Marketing Plan • Strategic Alternatives 5 © 2013 by Cengage Learning Inc. All Rights Reserved. 1
- 6. Strategic Planning is… the managerial process of creating and maintaining a fit between the organization’s objectives and resources and the evolving market opportunities. The GOAL of strategic planning is long-term profitability and growth. 6 © 2013 by Cengage Learning Inc. All Rights Reserved. 1
- 7. Strategic Business Units Define Strategic Business Units (SBUs) 2 © 2013 by Cengage Learning Inc. All Rights Reserved. 7
- 8. Characteristics of Strategic Business Units (SBUs) An SBU HAS… A distinct mission and specific target market Control over its resources Its own competitors Plans independent of other SBUs 8 © 2013 by Cengage Learning Inc. All Rights Reserved. 2
- 9. Strategic Alternatives Identify strategic alternatives and know a basic outline for a marketing plan 3 © 2013 by Cengage Learning Inc. All Rights Reserved. 9
- 10. Ansoff’s Opportunity Matrix Market Penetration Increase market share among existing customers Market Development Attract new customers to existing products Product Development Create new products for present markets Diversification 10 Introduce new products into new markets © 2013 by Cengage Learning Inc. All Rights Reserved. 3
- 11. Exhibit 2.1 Ansoff’s Strategic Opportunity Matrix Present Product Present Market Market Penetration New Market Market Development Starbucks sells more coffee to customers who register their reloadable Starbucks cards. Starbucks opens stores in Brazil and Chile New Product Product Development Starbucks develops powdered instant coffee Via. Diversification Starbucks launches Hear Music and buys Ethos Water. 3 11 © 2013 by Cengage Learning Inc. All Rights Reserved.
- 12. Boston Consulting Group Portfolio Matrix Star Star Cash Cow Cash Cow Portfolio Portfolio Matrix Matrix Question Mark Question Mark Dog Dog 12 © 2013 by Cengage Learning Inc. All Rights Reserved. 3
- 13. Exhibit 2.2 Portfolio Matrix for a Large Computer Manufacturer 3 13 © 2013 by Cengage Learning Inc. All Rights Reserved.
- 14. Portfolio Matrix Strategies Build Build Hold Hold Harvest Harvest Divest Divest 14 © 2013 by Cengage Learning Inc. All Rights Reserved. 3
- 15. Exhibit 2.3 High Cautiously Invest Invest/Grow Invest/Grow Medium Harvest/Divest Cautiously Invest Invest/Grow Low Market attractiveness Portfolio Matrix for a Large Computer Manufacturer Harvest/Divest Harvest/Divest Cautiously Invest Low Medium High Business Position 15 © 2013 by Cengage Learning Inc. All Rights Reserved. 3
- 16. What Is a Marketing Plan? Planning – the process of anticipating future events and determining strategies to achieve organizational objectives in the future. Marketing Planning – designing activities relating to marketing objectives and the changing marketing environment. Marketing Plan – a written document that acts as a guidebook of marketing activities for the marketing manager. 16 © 2013 by Cengage Learning Inc. All Rights Reserved. 3
- 17. Why Write a Marketing Plan? Provides a basis for comparison of actual and expected performance Provides clearly stated activities to work toward common goals Provides an examination of the marketing environment Serves as a reference for the success of future activities Allows entry into the marketplace with awareness 17 © 2013 by Cengage Learning Inc. All Rights Reserved. 3
- 18. Business Mission Statement Exhibit 2.4 Elements of a Marketing Mix Situation or SWOT Analysis Objectives Marketing Strategy Target Market Strategy Marketing Mix Product Distribution Promotion Price Implementation Evaluation Control 18 © 2013 by Cengage Learning Inc. All Rights Reserved.
- 19. Marketing Plan Elements Selecting which alternative to pursue depends on: 1. Philosophy and culture 2. Decision making tools The most common decision making tool is the matrix form. 19 © 2013 by Cengage Learning Inc. All Rights Reserved. 3
- 20. Writing the Marketing Plan A complete marketing plan can allow an organization to achieve marketing objectives… HOWEVER the marketing plan is only as good as the information, effort, creativity and thought put into it. 20 © 2013 by Cengage Learning Inc. All Rights Reserved. 3
- 21. Defining the Business Mission Develop an appropriate business mission statement 4 © 2013 by Cengage Learning Inc. All Rights Reserved. 21
- 22. Defining the Business Mission Answers the question, “What business are we in?” Focuses on the market(s) rather than the good or service SBUs may also have a mission statement 22 © 2013 by Cengage Learning Inc. All Rights Reserved. 4
- 23. Conducting a Situation Analysis Describe the components of a situation analysis 5 LO3 © 2013 by Cengage Learning Inc. All Rights Reserved. 23
- 24. SWOT Analysis Internal External 24 S W O T Strengths --things the company does Strengths things the company does well. well. Weaknesses -- things the company Weaknesses things the company does not do well. does not do well. Opportunities -- conditions in the Opportunities conditions in the external environment that favor external environment that favor strengths. strengths. Threats -- conditions in the external Threats conditions in the external environment that do not relate to environment that do not relate to existing strengths or favor areas of existing strengths or favor areas of ©South-Western College Publishing current weakness. current weakness. © 2013 by Cengage Learning Inc. All Rights Reserved. 5
- 25. Components of a SWOT Analysis Examining internal strengths and weaknesses. Focus on organizational resources: • Production costs • Marketing skills • Financial resources • Company or brand image • Employee capabilities • Technology 25 © 2013 by Cengage Learning Inc. All Rights Reserved. 5
- 26. Environmental Scanning Helps identify opportunities and threats. Designing a marketing strategy is based on six major environmental forces: • Social • Economic • Technological • Political/Legal • Competitive 26 © 2013 by Cengage Learning Inc. All Rights Reserved. 5 © AP IMAGES/PRNEWSFOTO/PEPSICO • Demographic
- 27. Opportunities in Education • Grockit and DreamBox develop integrated web-based educational tools. • Technology-based education solutions offer interactive instruction for less than a private tutor. • Companies like these can use their technological expertise to create and take advantage of opportunities in the recession environment. Source: Joseph De Avila, "Pursuing an Academic Edge at Home," The Wall Street Journal, July 23, 2009, D1-D2. © Cengage Learning Inc. 2013. All Rights Reserved. 27
- 28. Competitive Advantage Identify sources of competitive advantage 6 © 2013 by Cengage Learning Inc. All Rights Reserved. 28
- 29. Competitive Advantage Cost Cost Types of Types of Competitive Competitive Advantage Advantage Product/Service Product/Service Differentiation Differentiation Niche Niche 29 © 2013 by Cengage Learning Inc. All Rights Reserved. 6
- 30. Cost Competitive Advantage Obtain inexpensive raw materials Create efficient scale of plant operations Design products for ease of manufacture Control overhead costs Avoid marginal customers 30 © 2013 by Cengage Learning Inc. All Rights Reserved. 6
- 31. Sources of Cost Reduction Experience Curves Experience Curves Efficient Labor Efficient Labor Reengineering Reengineering No-frills Products No-frills Products Production Innovations Production Innovations Government Subsidies Government Subsidies 31 Product Design Product Design New Service New Service Delivery Methods Delivery Methods © 2013 by Cengage Learning Inc. All Rights Reserved. 6
- 32. Examples of Product/Service Differentiators Brand names Strong dealer network Product reliability Image Service 32 © 2013 by Cengage Learning Inc. All Rights Reserved. 6
- 33. Niche Competitive Advantage Used by small companies with limited resources May be used in a limited geographic market 33 © 2013 by Cengage Learning Inc. All Rights Reserved. 6
- 34. Building Sustainable Competitive Advantage Sustainable competitive advantage is an advantage that cannot be copied by the competition. A firm that has successfully achieved a competitive advantage will stake out a position unique in some manner from its rivals. 34 © 2013 by Cengage Learning Inc. All Rights Reserved. 6
- 35. Sources of Sustainable Competitive Advantage Patents Patents Copyrights Copyrights Locations Locations Equipment Equipment Skills and Assets Skills and Assets of an of an Organization Organization 35 Technology Technology Customer Service Customer Service Promotion Promotion © 2013 by Cengage Learning Inc. All Rights Reserved. 6
- 36. Setting Marketing Plan Objectives Explain the criteria for stating good marketing objectives 7 © 2013 by Cengage Learning Inc. All Rights Reserved. 36
- 37. Marketing Objectives Realistic Measurable Time specific Compared to a benchmark “Our objective is to achieve 10 percent dollar market share in the cat food market within 12 months of product introduction.” 37 © 2013 by Cengage Learning Inc. All Rights Reserved. 7
- 38. Criteria for Good Marketing Objectives Carefully specified objectives serve several functions: 1. Communicate marketing management philosophy 2. Provide management direction 3. Motivate employees 4. Force executives to clarify their thinking 5. Form a basis for control 38 © 2013 by Cengage Learning Inc. All Rights Reserved. 7
- 39. Describing the Target Market Discuss target market strategies 8 © 2013 by Cengage Learning Inc. All Rights Reserved. 39
- 40. Describing the Target Market Marketing Strategy involves… the activities of selecting and describing one or more target markets and developing and maintaining a marketing mix that will produce mutually satisfying exchanges with target markets. Marketing Opportunity Analysis (MOA) involves… the description and estimation of the size and sales potential of market segments that are of interest to the firm and the assessment of key competitors in these market segments. 40 © 2013 by Cengage Learning Inc. All Rights Reserved. 8
- 41. Target Market Strategy Segment the market based on groups with similar characteristics Analyze the market based on attractiveness of market segments Select one or more target markets 41 © 2013 by Cengage Learning Inc. All Rights Reserved. 8
- 42. Target Market Strategy Appeal to the entire market Appeal to the entire market with one marketing mix with one marketing mix Concentrate on one Concentrate on one marketing segment marketing segment Appeal to multiple markets Appeal to multiple markets with multiple marketing mixes with multiple marketing mixes 42 © 2013 by Cengage Learning Inc. All Rights Reserved. 8
- 43. The Marketing Mix Describe the elements of the marketing mix 9 © 2013 by Cengage Learning Inc. All Rights Reserved. 43
- 44. The Marketing Mix is… a unique blend of product, place (distribution), promotion, and pricing strategies designed to produce mutually satisfying exchanges with a target market. The elements of the marketing mix are often referred to as the “Four Ps” 44 © 2013 by Cengage Learning Inc. All Rights Reserved. 9
- 45. Marketing Mix: The “Four Ps” The starting point of the “4 Ps” Includes: Physical unit Package Warranty Service Brand Image Value 45 Product Products can be… Tangible goods Ideas Services © 2013 by Cengage Learning Inc. All Rights Reserved. 9
- 46. Marketing Mix: The “Four Ps” Place Product availability where and when customers want them All activities from raw materials to finished products Ensure products arrive in usable condition at designated places when needed 46 © 2013 by Cengage Learning Inc. All Rights Reserved. 9
- 47. Marketing Mix: The “Four Ps” Includes integration of: Promotion Advertising Public relations Role is to bring about Sales promotion exchanges with target Personal selling markets by: Informing Educating Persuading Reminding 47 © 2013 by Cengage Learning Inc. All Rights Reserved. 9
- 48. Marketing Mix: The “Four Ps” Price Price is what a buyer must give up to obtain a product. The most flexible of the “4 Ps”—quickest to change Competitive weapon Price x Units Sold = Total Revenue 48 © 2013 by Cengage Learning Inc. All Rights Reserved. 9
- 49. Whole Foods Changes Its Pricing Strategy • As customers face financial struggles, Whole Foods is changing its pricing strategy by: – highlighting deals and sales – pricing items individually instead of per pound – bundle items in bulk discounts Source: Katy McLaughlin and Timothy Martin, "As Sales Slip, Whole Foods Tries Health Push," Wall Street Journal, August 5, 2009, B1 9 © 2013 by Cengage Learning Inc. All Rights Reserved. 49
- 50. Following Up on the Marketing Plan Explain why implementation, evaluation, and control of the marketing plan are necessary 10 © 2013 by Cengage Learning Inc. All Rights Reserved. 50
- 51. Following Up on the Marketing Plan Implementation Evaluation and Control Marketing audit is… 51 Comprehensive Systematic Independent Periodic © 2013 by Cengage Learning Inc. All Rights Reserved. 10
- 52. Effective Strategic Planning Identify several techniques that help make strategic planning effective 11 © 2013 by Cengage Learning Inc. All Rights Reserved. 52
- 53. Techniques for Effective Strategic Planning Continual Continual attention attention Creativity Creativity Management Management commitment commitment Effective Effective Strategic Strategic Planning Planning 53 © 2013 by Cengage Learning Inc. All Rights Reserved. 11
- 54. Chapter 2 Video Recycline CA Webb discusses Recycline’s strategic decisions that help the company have a sustainable competitive advantage— giving customers sustainable, environmentally friendly products without sacrificing any features of the traditional product. CA Webb also discusses her use of SWOT, and how it helps Recycline make strong choices for the new brand. © Cengage Learning Inc. 2013. All Rights Reserved. 54
Editor's Notes
- A good strategic plan can help protect and grow the firm’s resources.
- Notes: How do companies go about strategic marketing planning? How do employees know how to implement the long-term goals of the firm? The answer is through SBUs, developing a marketing plan, and examining strategic alternatives, which are covered in the following learning outcome sections.
- Notes: Strategic planning creates and maintains a fit between the organization’s resources and objectives and the evolving market opportunities. The goal is to sustain and increase long-run profitability and growth. Strategic decisions require long-term commitments of resources. Strategic errors can threaten a firm’s survival, but a good plan can help protect and grow the firm. Examples of strategic decisions:* Macy’s implements an additional beauty sales approach* General Motors sells the Saab nameplate* PepsiCo’s decision to focus on “Healthy Fare” and the recent backlash/financial struggle from decreased Pepsi sales. Discussion/Team Activity: Have students come up with strategic planning decisions of other companies. Discuss why strategic planning is important for these companies.
- Notes:A Strategic Business Unit (SBU) is a subgroup of a single business or a collection of related businesses within the larger organization, and has the listed characteristics.
- Notes: Ansoff’s Opportunity Matrix is one of the most commonly used tools to determine a company’s strategic direction. It matches products with markets. The four options are listed above. Examples of Strategic Alternatives Market Penetration:Manufacturer cents-off coupons Market Development:Expansion into global markets by companies such as McDonald’s, Coca-Cola, and Pepsi Product development:McDonald’s introduces yogurt parfaits, salads, and fruit to offer customers more healthy options. Diversification:CVS, Avon, Coca-Cola
- Notes: The second model for selecting strategic alternatives is the Portfolio Matrix from Boston Consulting Group. The Portfolio Matrix classifies each SBU by its present or forecast growth and market share. The assumption is that market share and profitability are strongly linked. The four classifications are Stars, Problem Child (Question Mark), Cash Cows, and Dogs.
- Notes: A star is a fast-growing market leader. Stars usually have large profits but need cash to finance growth. A marketing tactic is to protect market share by reinvesting earnings in product improvement, distribution, promotion, and production efficiency. Strive to capture new users as they enter the market. A cash cow generates more cash than it needs to maintain market share. It is in a low-growth market, but the product has dominant market share. The marketing strategy is to maintain market dominance by being the price leader and by making technological improvements. Allocate excess cash to high-growth prospects. A problem child shows rapid growth but poor profit margins. It has a low market share in a high-growth industry. It needs a great deal of cash to prevent conversion to dog status. Strategies are to invest to gain better market share, acquire competitors, or drop the SBU. A dog has low growth potential and a small market share. Most dogs leave the market. The strategy options are to divest or harvest.
- Note: After classifying the SBUs, a company must determine how to allocate resources to each SBU. The four basic strategies are: Build: If an SBU has the potential to be a star, building would be an appropriate goal. Hold: If an SBU is a successful cash cow, a goal would be to hold or preserve market share. Harvest: This is an appropriate strategy for all SBUs except stars. The basic goal is to increase short-term cash return without much concern for the long-run impact. Divest: Getting rid of SBUs with low shares of low-growth markets is often appropriate. Problem children and dogs are suitable for this strategy.
- The third model for selecting strategic alternatives is the General electric model. The GE model determines resources allocation to SBUs by determining market attractiveness and company strength. In the graphic, business position (horizontal axis) measures if the company is well positioned to take advantage of opportunities in the taret market. Market attractiveness (vertical axis) measures how attractive a market is for a company to enter. Some measurements are profitability, competition, customer price sensitivity, and rapid growth.
- Notes:Marketing planning is the basis for all marketing strategies and decisions. Issues such as product lines, distribution channels, marketing communications, and pricing are all delineated in the marketing plan.
- Notes:Writing a marketing plan allows the examination of the marketing environment in conjunction with the inner workings of the businesses. Once written it serves as a reference point for future activities, and allows the marketing manager to enter the marketplace with an awareness of problems and opportunities.
- Notes: Some elements are common to all marketing plans. These include the business mission and objectives, performing a SWOT analysis, determining a target market, and establishing a marketing mix. Other elements that may be included are budgets, implementation timetables, required marketing research efforts, or elements of advanced strategic planning. Exhibit 2.1: Example of marketing plan sketch The Marketing Plan Appendix contains a Marketing Plan Outline.
- Online Have students visit Dmusic.com, an Internet start-up created by a teenage entrepreneur which offers various professional services for independent musicians. Use Exhibit 2.1 to create a sample summary marketing plan for Dmusic.com.
- Note that the overall structure of the marketing plan should not be viewed a s a series of sequential planning steps. Many of the marketing plan elements are decided on simultaneously.
- Notes: The foundation of any marketing plan is the firm’s mission statement. The mission statement is based on an analysis of benefits sought by present and potential customers and an analysis of existing and anticipated environmental conditions. The mission statement establishes boundaries for all subsequent decisions, objectives, and strategies. Discussion/Team Activity: Find the mission statements for various organizations. Compare the mission statements with the markets served and the products sold by these organizations.
- Notes: Performance of a situation (SWOT) analysis helps firms identify their competitive advantage. Strengths and Weaknesses are an internal assessment. Opportunities and Threats are an external environment assessment. Discussion/Team Activity: Perform a SWOT analysis for companies within the same industry. How could you use this information if you worked for a particular company or for a competitive company?
- Notes: A competitive advantage is the set of unique features of a company and its products that are perceived by the target market as significant and superior to the competition. A firm’s competitive advantage is the reason or reasons that cause customers to patronize that firm and not the competition.
- Notes: Having a cost competitive advantage means being the low-cost competitor in an industry while maintaining satisfactory profit margins. This enables a firm to deliver superior customer value. Cost leadership can result from the reasons listed on this slide. Cost competitive advantages are subject to continual erosion. Discussion/Team Activity: Identify firms that have a cost competitive advantage and describe how they deliver superior value. Examples:DuPontDell ComputersWal-Mart CorporationSouthwest AirlinesNikeGeneral Electric
- Notes: Sources of Cost Reduction Experience Curves: Costs decline as experience with a product increases, and encompasses marketing, manufacturing, and administration costs. Efficient Labor: Labor costs in low-skill, labor-intensive industries can be reduced by going offshore or by outsourcing. No-frills Products: Removing frills and options can reduce costs. Government subsidies: Governments may provide grants and interest-free loans for target industries. Product design: Cutting-edge design and reverse engineering can offset costs. Reengineering: Reengineering in the form of pruning product lines, closing obsolete factories, or renegotiating supplier contracts can make firms more efficient. Product innovations: New technology and simplified production techniques can reduce production costs. New methods of service delivery:Examples include:* Outpatient surgery and walk-in clinics in the medical industry* Online-only magazines can help save on material and shipping costs.
- Notes: A product/service differentiation competitive advantage is the provision of something that is unique and valuable to buyers beyond simply offering a lower price than that of the competition. Product/Service Differentiation tends to provide a longer lasting competitive advantage than does cost competitive advantage. As a result, this strategy is more attractive to many top managers. Discussion/Team Activity: Discuss companies that have a product/service differentiation for: Brand name:Lexus Strong dealer network:Caterpillar Product reliability:Maytag Image:Neiman Marcus Service:FedEx
- Discussion/Team Activity: Discuss how a small firm serving a particular niche market can successfully compete against larger, global firms with greater resources. (For example, how might a small bookstore owner compete with Barnes & Noble and Amazon.com?)
- Notes: A sustainable competitive advantage lasts only as long as the time it takes a competitor to imitate the strategy and plans. Marketing managers should continually look for skills and assets that create and sustain competitive advantage. A sustainable competitive advantage is a function of the speed with which competitors can imitate a company’s strategy and plans. Imitation requires a competitor to identify the leader’s competitive advantage, determine how it is achieved, and learn how to duplicate it. Discussion/Team Activity: Discuss examples of firms that have sustainable competitive advantage in each skill and asset source listed.
- Notes: Three strategies for selecting target markets are shown here. These strategies are discussed in detail in Chapter 8. Discussion/Team Activity: 1. Discuss the differences in the target markets for McDonald’s, Burger King’s, and Wendy’s.
- Notes: The marketing manager can control each component of the marketing mix, but the strategies for all four components must be blended to achieve optimal results. Discussion/Team Activity: The best promotion and lowest price cannot save a poor product. Similarly, excellent products with poor placing, pricing, or promotion will likely fail. Identify several firms that might have used a marketing mix in which some components were particularly strong but others were particularly weak.
- Notes: The product is the starting point of the marketing mix. It is difficult to decide on a promotion campaign, determine a price, or design a distribution strategy until the product offering and product strategy are defined. The product is not only the physical unit but also the packaging, warranty, after-sale service, brand name, company image, value, and other factors. Products may be tangible goods, services, and ideas. Product decisions are discussed in Chapter 10 and 11, services marketing in Chapter 12.
- Notes: The goal of distribution is to ensure products arrive in usable condition at the right place when customers need them. Place strategies are covered in Chapters 13 and 15.
- Notes: Promotion includes personal selling, advertising, sales promotion, and public relations. Each element of the promotion mix is coordinated with the others to create a promotional blend. Integrated Marketing Communications is discussed in Chapters 16, 17, and 18. Technology-driven aspects of promotional marketing are covered in Chapter 21. Social Media and marketing are covered in chapter 22. A good promotion strategy can increase sales, but does not guarantee success.
- Notes: Price is an important competitive weapon and is often the most flexible of the marketing mix. Of the four Ps, it can be changed most quickly. Price multiplied by the number of units sold equals total revenue for the firm. Pricing decisions are discussed in Chapters 19 and 20.
- Notes: Implementation is the process that turns marketing plans into action assignments. These activities may involve job assignments, activity descriptions, timelines, budgets, and lots of communication. Implementation is essentially “doing what you said you were going to do.” However, many organizations repeatedly experience failures in strategy implementation. The marketing audit provides the mechanisms for evaluating marketing results compared to the plan’s goals. Online Youngbiz.com Visit the YoungBiz Web site’s list of Top 100 entrepreneurs. Select one of the entrepreneurial ventures listed and create a marketing plan for it using the concepts and strategies discussed in this chapter. How would you implement, evaluate, and control the plan?
- Notes: Strategic planning is not an annual event, but an ongoing process. The environment is continually changing, and the firm’s internal resources and capabilities are continually evolving. Strategic planning is based on creativity. Assumptions about the firm and the environment should be challenged and new strategies established to sustain competitive advantage. Management support and participation are critical to the success of strategic planning. Discussion/Team Activity: Discuss strategic planning decisions of other companies. Discuss why strategic planning is important for these companies.