Strategic Market Planning I

Food for Thought: 1.What is the relationship between strategic planning and marketing? 2.What is strategic planning? 3.What are the components of strategic planning?

What is the relationship between strategic planning and marketing? (textbook p18-19)

What is Strategic Planning? Includes all the activities that lead to the development of a clear organizational mission, organizational objectives, and appropriate strategies to achieve the objectives for the entire organization. provides the context for planning in each of the divisions and departments by divisional and departmental managers

What are the components of strategic planning?

Comparing the following mission statements The Revlon: we make cosmetics Disney: we run theme parks Wal-mart: we run discount stores We sell lifestyle and self-expressions; success and status; memories, hopes and dreams We provide fantasies and entertainment We offer products and services that deliver value to middle Americans

A business is not defined by the company’s name, statutes, or articles of incorporation. It is defined by the want the customers satisfies when he buys a product or service. To satisfy the customer is the mission and purpose of every business. The question “What is our business?” can, therefore, be answered only by looking at the business from the outside, from the point of view of customer and market. ---Peter Drucker Component 1: Mission Statement

Business Definition (Mission): The fundamental contributions the organization provides to customers. 1. Focus on markets and customers rather than products 2. Motivational, realistic and specific Component 1: Mission Statement

To explore strange new worlds, to seek out new life and new civilizations, to boldly go where no one has gone before. To provide relief to victims of disasters and help people prevent, prepare for, and respond to emergencies. To contribute to human welfare by applications of biomedical engineering in the research design, manufacture, and sale of instruments or appliances that alleviate pain, restore health and extend life. Motivational Mission Statements

The end-points of an organization’s mission; what it seeks through on-going, long-run operations (textbook p233) relate to a specific topic measurable contain a time deadline Component 2: Create objectives

Involves the choice of major directions the organization will take in pursuing its objectives. Organizational strategies based on competitive advantage 1. cost 2. differentiation 3. focus Component 3: Organizational Strategy

Organizations at a particular time are a portfolio of businesses that is, product lines, or divisions Organizations can create strategic business units (SBU) which could be a single product, product line, or division Management must decide which businesses to build, maintain, or eliminate, or which new businesses to add Component 4: Organizational Portfolio Plan

Assessing SBUs: The BCG (Boston Consulting Group) Model (chapter 1-appendix) Low High Market growth rate Relative market share Star Cash cow ? ? ? Question markDog

Assessing SBUs: the GE (General Electric) Model (chapter 1-appendix)