Strategic Management And Planning

Strategic Marketing and Planning

Strategic Marketing Management w The mark of an excellent company is how it responds to a continuously changing environment w Benefits of planning n n n n n

Strategic Planning

Planning hierarchy

w Strategic planning is the managerial process of developing and maintaining a viable fit between the organisation’s objectives and resources, and its changing market opportunities w The aim of strategic planning is to shape and reshape the company’s businesses and products to produce satisfactory profits and growth

The Strategy Hierarchy

Corporate Level

Strategic Business Unit Level

Corporate Strategy • Mission and vision • Objectives • Business portfolio strategy • Resource development • Corporate values

SBU Strategy

Functional Level of Marketing Strategy SBU Marketing objectives Product markets strategies

SBU Strategy • Business definition • Objectives • Product market portfolio • Competitive strategy • Resource allocation and management

R&D Strategy Technology Product development

Production and operation strategy

Finance and administration Strategy

management becomes proactive facilitates integration communicates management intent ensures activities are goal-oriented monitor progress towards goals

SBU Strategy

Three levels: w Corporate strategic plan w Strategic Business Unit plan w Marketing plan

Corporate Strategic Plans

Corporate strategic planning concerns the organisation as a whole and ultimately deals with the allocation of funds across SBUs and returns generated on those funds

Human resources Strategy

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Steps in Strategic Planning Corporate Level

Defining the Company Mission

w 4 planning activities Defining Company Objectives and Goals

n n

Designing the Business Portfolio

n

n

Business Level

define mission identify SBUs analyse and evaluate the current portfolio of businesses identify new business arenas to enter

Planning, Marketing and Other Functional Strategies

Strategic Business Units w The mission statement provides direction for the company n n n

What business are we in? Who do we serve? What benefits do we provide?

w Elaborating on the mission w The mission statement acts as an invisible hand to guide geographically remote operations

SBUs w The General Electric (GE) approach w Definition of SBUs can be at any level of the company w At the corporate level, decisions are made concerning which SBUs to build, maintain, harvest, and divest

w Companies too often describe their business in terms of a product they make w Levitt argues that a business must be viewed as a customer-satisfying process, not a goods-producing process w SBU business domain (Abell) w Purpose is to assign strategic planning responsibilities to these units

Planning tools GE Business Screen w If either market attractiveness or business strength is weak, the company will not produce outstanding results w SBUs have a life cycle w May be used to forecast SBU position w Corporate decisions (Build;Hold;Harvest;Divest)

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The GE Planning Grid

Strategic Planning Gap

Industry Attractiveness

Business Strength

Strong

Average

Weak

C

High

The output of portfolio analysis of SBUs is the identification of any gaps between future desired sales and projected sales. If a gap exists, corporate management must plan to either develop or acquire new businesses to fill the gap

A

Medium

B

D

Low

Corporate, Business and Marketing Strategy Model

Closing the strategic gap w Major classes of growth opportunities n n n

Intensive growth Integrative growth Diversification growth

• Business portfolio • Capital investments and resource allocation • Corporate culture • Corporate structure

Markets Products and services Profit- yielding strategies Brand management Profit improvement

Performance-Importance matrix

w Goals should be SMART w Strategy w Programs and action plans w Implementation

Marketing Strategy • Developing market position • Customer satisfaction

Focus Economic value added

Focus Economic value added

Focus Customer value creation, maintenance and defence

Shareholde r Value

Business Value

Customer Value

Marketing Strategy & the Marketing Plan

Strategic Planning Process

n

• Building core competencies

• Product/market portfolio Business Strategy • Resource allocation • Distinctive competencies • Product- markets • Developing competitive • Business culture position • Strategic cost • Competitive advantage management • • • • •

w Linear and iterative w SWOT analysis

Corporate Strategy

w Planning is conducted at two levels n n

annual plan long term plan

w It contains much greater detail than the corporate plan w It takes direction from the strategic plan

3

Business Portfolios High

Market Growth Rate

Planning tool

Stars

Question Marks

? ???? Cash Cows

Low

BCG Product Portfolio Matrix w Used at the product market level w Components w Is the portfolio balanced?

Dogs

High

Low

Relative Market Share

Closing the marketing plan gap

Ansoff’s Gap Analysis Chart

Sales

Objectives

w Market opportunity identification n

Ansoff’s Product/Market expansion grid

n

n

Projected Gap to be closed

Is the opportunity compatible with company objectives? Is the opportunity compatible with company resources?

Competitive Gap

Past

w Target market strategy

Using the Ansoff Matrix in the Objective -setting Process

PRODUCTS / SERVICES

PRODUCTS / SERVICES

New

Market development

Diversification

Established

Product / Service development

New

Market penetration

Established

MARKET

MARKET Present New

(No change strategy)

Forecast Future

Now

Source: D.T. Brownlie & C.K. Bart, Products and Strategies, MCB University Press, Vol.11, No.1, 1985, p.29

Ansoff’s Growth Vector Matrix Present

Projected Gap to be closed

Diversification

w Market opportunity evaluation

Market penetration (1)

New Product / Service development (2)

High Risk Market development (3)

Diversification (4)

Source: D.T. Brownlie & C.K. Bart, Products and Strategies, MCB University Press, Vol.11, No.1, 1985, p.29

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Profit improvement options

Marketing Plan contents

Profit Improvement

Sales Growth

Market Penetration

Productivity Improvement

Market Development

Product Change Development Asset base

Take Increase New Convert Existing competitors’ usage Segments non-users Markets customers

New Markets

Existing Assets

Cost Reduction

Growth focus

Improve asset Increase utilisation Price (experience and efficiency

Improve product sales mix ( margin)

Cash and margin focus Investment • innovation • diversification

Divestment • redeployment of capital resources

w Sales objectives w Target market w Marketing objectives and strategies w Positioning w Product & Branding w Price w Distribution

w Operations plan w Promotion n n n n

Advertising message Media Merchandising PR

w Budget/payback analysis/calendar w Evaluation measures

Capital utilisation focus

Extended Marketing Mix 3. PEOPLE

7. PROMOTION Advertising Personal selling Direct marketing Synchronous marketing

4. PROCESS TARGET CUSTOMERS INTENDED POSITIONING

6. PLACEMENT for customer service Demand chain management Logistics management Channel management

In the case of ‘high-contact’ services, customers are involved in the process. Technology is also important in conversion operations and service delivery 5. PHYSICAL EVIDENCE

David Burke Australian Institute for Enneagram Studies Ph: 32191071 [email protected] enneagram.com.au

Services are mostly intangible. T hus the meaning of other tools and techniques used in measures of satisfaction are important

Planning the Migration Planning dimensions:

DemographicEconomic Environment

Suppliers

PoliticalLegal Environment

Natural Environment

Channels

Place ng eti rk trol Ma on C

Key milestones: ‘Place’ strategy

th Pa on ati r g Mi

The Marketing Process TechnologicalMarketing Product

ng eti g rk nin Ma lan P

Desired Future Position

• Management Process • Technology Key milestones: • Culture ‘Space’ strategy • People • Information • Marketing Strategy

Present Position

Guest Speaker

People interacting with people is how many service situations might be described. Relationships are important in marketing

List price Discounts Allowances Settlement and credit terms

Target Price Consumers Promotion

Competitors

Publics

Im M ple ark m eti en ng tat ion

Variety Quality Design Features Brand name Packaging Sizes Add-ons Warranties Returns

2. PRICE

M An arke aly tin sis g

1. PRODUCT & SERVICE

SocialCultural Environment

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