FM: Anis Gunawan,MM Strategic Marketing

Topic Suggested reading 1.The strategic planning process Intro to the Integrating case study Chapter 1-2 Case 1 :The ABC Cheese Factory 2.Portfolio model Page Chapter 3 Case 2 :Abbotsleigh Citrus 3.The growth strategies Page Chapter 4 Case 3 :Degrees South 4.Five forces model Page Chapter 5 Case 4 : A retail meat market Question No 1 5.Competitive generic strategies Page Chapter 6 Case 5 : A retail meat market Question no 2 6.Competitive market position and related strategies Page Chapter 8 Case 6 : A retail meat market Question No 3 7.Strategic alliance and network Page Chapter 9 Exam -

Chapter 1 The strategic planning process

Strategic planning 1.considers the options available; 2.makes choices that will result in the best outcome for the business; 3.achieves the objectives of profitability and sustainable superiority over competitors; and 4.meets other business and marketing objectives in a sustainable manner. 4 Strategic planning is an activity where the decision maker:

Strategic business unit (SBU) 1.operates in a different industry or market, each of which has different market conditions and potential; 2.has its own set of customers; 3.has its own set of competitors; 4.has a range of product/service offerings; 1.at different stages of the product/market life cycle; and 2.each with different resource needs based on potential and growth direction. 5 A part of a larger business that operates as a small, separate business. Each SBU:

ABN AMRO is a global bank, based in the Netherlands. It has 3 globally integrated Strategic Business Units. 6 Source: Amro

Planning activities The 9 steps of planning: 1.Decide on what you are trying to achieve 2.Analyse your situation 3.Review your objectives 4.Decide on the general strategies to achieve the objectives 5.Design tactics 6.Document and communicate the plan of activities 7.Implement the planned activities 8.Monitor the progress of the planned activities 9.Evaluate the success of the plans, starting with the shortest term plans. 7 Boeing

Chapter 2 SWOT analysis

1.SWOT analysis is the summary of the external and internal situation analysis. 2.Each factor examined in the external analysis can result in a potential or actual opportunity or threat. 3.Each factor examined in the internal analysis can result in a potential or actual relative strength or weakness. 9

Example 1.Objective: to increase sales of product X by 10 per cent over the next 12 months. 2.Opportunity: several regular customers have indicated they would find a smaller size of the product convenient. 3.Related weakness: our current product range has only medium and large sizes. 4.Potential strategy: filling the existing size gap Product Development with a smaller size. 5.Related issues: cost of developing new size, market potential, price/profit potential. 10

Strengths Strengths are factors, or core competencies that will: help make use of opportunities, contribute to the achievement objectives, lessen the impact of threats or remove them completely. For a factor to be considered a strength, the business must ‘do it better’ than its competitors. In business, being good at something is only useful if it allows you to gain market share, sales or profit. Strengths can be input, processing or output factors. 11 Azzuri

Weaknesses 1.lessen the ability to pursue opportunities, 2.reduce the ability to achieve objectives, 3.allow threats to have an impact or allow them to occur. 12 Weaknesses are factors, or core competencies, that cause the business to: Weaknesses mean the business performs less effectively than competitors. 1. in an area that is important to customers, or 2. to the efficient running of the business. Weaknesses can be input, processing or output factors. B

Opportunities 1.reduce costs or gain greater control over inputs; 2.improve processes, production, operational or administrative service 3.increase the volume and variety of outputs, i.e., sales volume, product range. 13 Opportunities are external occurrences that allow the business to: Indoexport

Threats 1.increase costs or lose control over inputs, 2.reduce the effectiveness of processes, production, operational or administrative services, 3.reduce the volume or variety of outputs. 14 Threats are external occurrences that cause the business to: Wallstreet

SWOT analysis SWOT analysis can be carried out using three main methods: 1.an individual planner that lists all strengths, weaknesses, opportunities and threats to whole or part of the business, analyses them and develops strategies; 2. brainstorming where selected managers and key staff identify and rate all factors, which are then developed into strategies and tactics; 3.an in-house research exercise where key management, staff, and selected suppliers, customers and distributors rate the business or SBU on a range of pre-identified factors. The planner uses the results to develop strategies and tactics. 15

Ranking SWOT factors Strengths can be ranked using: 1. Performance - major, minor, neutral; and Importance - high, medium and low; 2. A - highly important, B - somewhat important, or C - interesting but not necessarily useful; 3. A comparison performance rating system, where each factor is given a weight (importance scale) and each competitor is rated on each factor (1 - 5 scale). An overall score is calculated by multiplying the weight and rate 4. Distinctive strengths, Not really a distinctive strength, but may develop, Definitely not a distinctive strength 16

Ranking SWOT factors Weaknesses can be ranked using: 1. Performance - minor weakness and major weakness; and Importance - high, medium and low. 2. A - highly important, B - somewhat important, C - interesting but not necessarily useful. 3. Symptomatic weakness - not very serious in themselves, but are often symptoms of a more serious problem, Hygiene weaknesses - factors fundamental to good business that the business is not doing well, and Structural weaknesses - lack of a distinctive competence. 17

Ranking SWOT factors Opportunities and threats can be ranked as: 18 Opportunities Threats Success probability Probability of occurrence HighLowHigh Low Attractiveness Low High Seriousness Low High

Ranking opportunities and threats 1.A similar four quadrant grid for using the criteria of Impact and Immediacy of both opportunities and threats. 2.Ratings as: A - highly important, B - somewhat important, C - interesting but not necessarily useful 3.Opportunities as: 1. Current portfolio - can the organisation enter almost immediately with some re-configuration? aand 2. Future portfolio - could this area be entered in the future provided it developed towards this objective? 4.Threats as: 1.short term 2.medium 3.long term. 19

Using SWOT to develop strategies and tactics 1.Once all factors are identified and ranked, the planner can begin to see what aspects need to be addresses in the short, medium and long term. 2.Opportunities and threats should be connected wherever possible to strengths and weaknesses. 3.The planner can then decide what internal activities need to be undertaken to address the relevant external factors (opportunities and threats). 4.Activities (tactics) can be arranged into logical groupings e.g., each opportunity with the activities necessary for each of the 4 Ps being identified. 20

21 Marketing Case: 1.What is the decision facing P&G ? 2.What strategic factors are important in understanding this decision situation? understanding 3.What are the alternatives? 4.What decision(s) do you recommend? 5.What are some ways to implement your recommendation? Example :

22 Marketing Case: 1.What is the decision facing ABC cheese factory? 2.What strategic factors are important in understanding this decision situation? 3.What are the alternatives? 4.What decision(s) do you recommend? 5.What are some ways to implement your recommendation?