Company and Marketing Strategy Chapter: 2

Companywide Strategic Planning Strategic Planning The process of developing and maintaining a strategic fit between organization’s goal and capabilities and its changing marketing opportunities -Sets stage for the rest of company’s planning 1) Annual Plans 2) Strategic Plans

Steps in Strategic Planning Setting company objectives and goals Defining the company’s mission Designing the business portfolio Planning marketing and other functional strategies Business unit, product, and market level Corporate Level

Defining a Market-Oriented Mission Mission Statement A statement of the organization’s purpose- what it wants to accomplish in the larger environment - acts as an invisible hand - Market oriented mission statement - Meaningful, specific, yet motivating - Mission should not state profits

Market Oriented Business Definitions Company Market- Oriented Definition Wal- Mart “Save money, live better” Life Insurance Corporation of India“Zindagi e saath bhi, zindagi ke baad bhi” GoogleWe help you organize the world’s information and make it universally accessible and useful NokiaConnect people

Setting Company Objectives and Goals Turn mission into objectives How will you go about things

Designing the business portfolio Business Portfolio The collection of businesses and products that make up the company - Should be a best fit to company’s strengths and weaknesses to opportunities Step: 1- Analyzing the current business portfolio Step: 2- Future Portfolio

Analyzing the Current Business Portfolio The process by which management evaluates the products and businesses that make up the company - identify the SBU’s Growth Share Matrix A Portfolio- planning method that evaluates a company's strategic business units in terms of its market growth rate and relative market share. SBUs are classified as stars, cash cows, question marks, or dogs

BCG Growth Share Matrix Cash Cow Dog Star Question Mark Relative market Share Market growth rate HighLow High Low

BCG Growth Share Matrix Contd. Stars: - High growth, High share - Heavy Investment required to sustain share - Will eventually turn in cash cows Cash Cows - Low Growth, High Share - Less investment - a lot of cash produced

BCG Growth Share Matrix Contd. Question Marks - Low share, High Growth - A lot of investment to hold share - Which too keep and which to let go Dogs - Low Growth, Low share - no large sources of cash

Problems with Matrix Difficult, time consuming and costly No advice on future

Developing strategies for growth and downsizing Identify, evaluate and select market opportunities and lay down strategies for capturing them Product/market expansion grid A portfolio- planning tool for identifying company growth opportunities through market penetration, market development, product development, or diversification

The Product/Market Expansion Grid Market Penetration Market DevelopmentDiversification Product Development Existing Products New Products Existing Markets New Markets

The Product/Market Expansion Grid Market Penetration A Strategy for company growth by increasing sales of current products to current market segments without changing the product Market Development A Strategy for company growth by identifying and developing new market segments for current company products

The Product/Market Expansion Grid Product Development A strategy for company growth by offering modified or new products to current market segments Diversification A strategy for company growth through starting up or acquiring business outside the company's current products and markets

Downsizing Reducing the business portfolio by eliminating products of business units that are not profitable or that no longer fit the company's overall strategy