Corporate Strategic Planning Asia-Pacific Marketing Federation Certified Professional Marketer Copyright Marketing Institute of Singapore

Outline  Introduction  Meaning & Role of Strategic Planning  Corporate Mission  Strategic Business Units (SBU)  Marketing Audit

Strategic Planning …is the managerial process of developing and maintaining a strategic fit between the organization's objectives and resources and its changing market opportunities. Org Objectives Resources Changing Environment Strategic Fit

The Role of Strategy Corporate Mission & Objectives Strategy: Corporate Business Functional Operating Plans

Sun Tze on Strategy  “Know your enemy, know yourself, and your victory will not be threatened. Know the terrain, know the weather, and your victory will be complete.”

Strategic Marketing “ Marketing Strategy is a series of integrated actions leading to a sustainable competitive advantage.” John Scully

Corporate Mission  Broad purposes of the organization  General criteria for assessing the long- term organizational effectiveness  Driven by heritage & environment  Mission statements are increasingly being developed at the SBU level as well

Examples of Corporate Mission SINGAPORE AIRLINES is engaged in air transportation and related businesses. It operates world-wide as the flag carrier of the Republic of Singapore, aiming to provide services of the highest quality at reasonable prices for customers and a profit for the company

Examples of Corporate Mission (cont’d) MARRIOTT’S Mission Statement: We are committed to being the best lodging and food service company in the world, by treating employees in ways that create extraordinary customer service and shareholder value

Corporate Culture  The most abstract level of managerial thinking  How do you define culture?  What is the significance of culture to an organization?  How does marketing affect culture in the organization?

Corporate Objectives & Goals  An objective is a long-range purpose  Not quantified and not limited to a time period  E.g. increasing the return on shareholders’ equity  A goal is a measurable objective of the business  Attainable at some specific future date through planned actions  E.g. 10% growth in the next two years

What is a Strategic Business Unit? (SBU)  A set of products or product lines  With clear independence from other products or product lines  for which a business or marketing strategy should be designed

Characteristics of a viable SBU  Unique business mission  Definable set of competitors  Integrative planning done independently  Responsible for resource management in all areas  Large enough but not so large as to become bureaucratic (Source: Subhash Jain, Marketing Planning & Strategy, 6 th Ed.)

Organizational Marketing Levels Hofer and Schendel suggested that organizations develop strategies at three structural levels:  Corporate level—(corporate marketing)  SBU level—(Strategic Marketing)  Product/Market level—(Functional Marketing)

Marketing at the SBU Level— Strategic Marketing  Strategic Marketing requires  Detailed understanding of market needs, and  Proactive use of competitive intelligence at the corporate as well as SBU’s levels  Strategic Marketing  Focuses on what the firm do best at the SBU level  To secure and maintain a sustainable competitive advantage

What is Competitive Advantage?  “Competitive advantage is a company’s ability to perform in one or more ways that competitors cannot or will not match.” Philip Kotler  “If you don’t have a competitive advantage, don’t compete.” Jack Welch, GE

Other Characteristics of Competitive Advantage  Substantiality  Is it substantial enough to make a difference?  Sustainability  Can it be neutralized by competitors quickly?  Ability to be leveraged into visible business attributes that will influence customers (Source: Strategic Marketing Management, Aakers)

Seeking Competitive Advantages  Positions of advantage  Superior customer value  Lower relative total cost  Performance advantages   Customer satisfaction, Loyalty, Market Share, Profit  Sources of advantages   Superior skills & knowledge, Superior resources, Superior business process

Key Elements of Marketing Strategy Formulation  The strategic 3 Cs  Customers, Competitors & the Corporation  Environment analysis -- PEST  Strategic Marketing Decisions  Where to compete  How to compete  When to compete

 Must have a clearly defined market  Must have a good match between corporate strengths and market needs  Must have significant positive differentiation in the key success factors of the business A Viable Marketing Strategy

Situation Analysis  Internal Analysis— company; capability etc.  External Analysis— customers, market definition, industry structure  SWOT Analysis  Strengths, Weaknesses, Opportunities & Threats  Identify & prioritize major problems and opportunities: selection of key issues  Based on the firm’s core competencies, decide on future options

Marketing Audit “Marketing audit is a comprehensive, systematic, independent, and periodic examination of a company’s—or business unit’s—marketing environment, objectives, strategies, and activities with a view to determining problem areas and opportunities and recommending a plan of action to improve the company’s marketing performance”Philip Kotler

Characteristics of Marketing Audit  Comprehensive  Must cover all marketing areas  Systematic  Sequential diagnostic steps  Independent  Internal & external auditors  Periodic  Performed at regular intervals

Marketing Audit Procedure  Marketing environment audit  Marketing strategy audit  Marketing organization audit  Marketing system audit  Marketing productivity audit  Marketing function audit  Marketing excellence review  Ethical and social responsibility review