1. Market-Oriented Strategic Planning
Chapter 4
Winning Markets:
Market-Oriented Strategic Planning
Dr. S. Borna
MBA 671

2. Objectives Corporate and division strategic planing
Business unit planning
The marketing process
Product level planning
The marketing plan

3. A BRIEF HISTORY OF MARKETING STRATEGY
By: Schnaars
The Free Press

4. Term “Marketing Strategy”
Different Usage of the
Term “Marketing Strategy”

5. Marketing Strategy at Macro Level:
Identification of target market(s) and designing an appropriate marketing mix for that market(s).

6. marketing element strategies: For example: skimming vs.
There are also
marketing element strategies:
For example: skimming vs.
penetration price strategies
Finally, Product-market Entry
Strategies

7. Historical Trends in
Marketing Strategy
1950s Budgeting Search for
overall Corp. Strategy
1960s Long Range Planning
1970s Formula Planning
1980s Strategic Thinking

8. Budgeting No explicit strategy
Emphasis on control rather than strategy
An interest in integrating functions of
organization: production, finance,
marketing etc.

9. Key Characteristics of Long-Range Planning
Objectives and Goals
Long-Range Forecasting

10. Formula Planning Theoretical but Impractical (1970s)
Decline of Formula Planning
Theoretical but Impractical

11. Strategic Thinking From Forecasting to Competitive Advantage
From elitism to egalitarianism

12. From competitors to competitors and consumers
From calculation to creativity

13. What is competitive Advantage?
Competitive advantage is some-
thing that allows a firm to earn
higher-than-average profits

14. What is Strategy? The art and science of adapting and coordinating
resources to the attainment
of an objective.

15. Three Recurring Themes
Environmental analysis
Firm’s resources
Objective and goals

16. To Attain
Adapted To
Resources
Opportunity
Objectives

17. A company can outperform
rivals only if it can establish
a difference that it can
preserve.
The essence of strategy is
choosing to perform
activities differently than
rivals do.

18. According to Porter (HBR 1996)
Strategy is the creation of a
unique and valuable position,
involving a different set of
activities.

19. Strategic Positions Can Be Based On: 1. Variety-based Positioning
ex. Jiffy Lube
2. Needs-based Positioning
(segmentation) ex. Ikea
3. Etc.

20. Porter’s Main Points:
1. Distinguish between Operational efficiency and strategy
2. Identify a unique strategic
position
3. Consider trade-offs (do not be
Jack of all trades.)
4. Strategic positions should have a horizon of a decade or more.

21. Strategic-Planning, Implementation, and Control Process
Corporate
planning
Division
Business
Product
Organizing
Implementing
Measuring
results
Diagnosing
Taking
corrective
action

22. Corporate Headquarters Planning
Strategic Planning at the Corporate Level Consists of :
Defining Corporate Mission
Defining Corporate Objectives

23. Strategic Planning (Cont.)
Corporate Development Strategy (growth strategies) downsize older businesses as well.
Allocating Corporate Resources (corp. portfolio evaluation & strategy)

24. FACTORS THAT INFLUENCE THE CORPORATE MISSION
ENVIRONMENTAL FACTORS
ORGANIZATIONS PAST HISTORY
MANAGEMENT PREFERENCE

25. DEFINING THE ORGANIZATION’S MISSION
WHAT BUSINESS(ES) ARE WE IN?
WHAT BUSINESS(ES) SHOULD WE BE IN?
HOW TO ALLOCATE OUR RESOURCES AMONG DIFFERENT UNITS?

26. CRITERIA FOR DEFINING THE CORPORATE MISSION
Target customers and Markets
Principle Products or Services
Geographic Domain

27. CRITERIA FOR DEFINING THE CORPORATE MISSION
Core Technologies
Concern for Survival, Growth and profitability
Public Image
etc.

28. A MISSION STATEMENT
To provide low-cost personal motorized transportation for low- to moderate income consumers through providing small cars designed with most fuel-efficient technology.

29. What is unique about the above mission statement
An Excellent mission statement by Toyota:
Beat the Mercedes Benz!
What is unique about the above mission statement

30. COMPANY OBJECTIVES: MEASURES OF PERFORMANCE
EXAMPLE:
To realize an average return of 15% on investment over the next five years.

31. Objectives and Strategies
Objectives are ends strategies are means of achieving these ends.

32. The Strategic-Planning Gap
Sales 10 5
Time (years)
Desired
sales
Strategic-
planning
gap
Diversification growth
Integrative growth
Intensive growth
Current
portfolio

33. Intensive Growth Strategies
Planning New Business (Growth Strategies)
Current Product New Product
Product
Development Strategy
Market
Penetration Strategy
Markets Markets
Current New
Market
Development Strategy
(Diversification Strategy)
Intensive Growth Strategies

34. Corporate Growth Strategies
Integrative Growth
1. Backward Integration
2. Forward Integration
3. Horizontal Integration

35. Corporate Growth Strategies
Diversification Strategies
1. Concentric Diversification (technological
synergy)
2. Horizontal Diversification
3. Conglomerate Diversification

36. Resource Deployment Strategies
Allocating Resource Among Strategic Business Units

37. The Boston Consulting Group’s Growth-Share Matrix
20%-
18%-
16%-
14%-
12%-
10%-
8%-
6%-
4%-
2%-
Market Growth Rate
Stars 5 4 3 ?
Question marks 2 1
Cash cow 6
Dogs 8 7
10x x 2x 1.5x 1x
Relative Market Share
.5x .4x .3x .2x .1x

38. LIMITATIONS OF BCG METHOD
1. INTERDEPENDENCE AMONG SBU’S;
2. MARKET GROWTH RATE AS A PROXY MEASURE OF INDUSTRY ATTRACTIVENESS IS INADEQUATE;
3. RELATIVE MARKET SHARE AS PROXY MEASURE OF COMPETITIVE STRENGTH
IS INADEQUATE.

39. LIMITATIONS OF BCG METHOD (CONTINUED)
CLASSIFICATION IS SENSITIVE TO VARIATIONS IN HOW “GROWTH” & “SHARE” ARE MEASURED.

40. Market Attractiveness: Competitive- Position Portfolio Classification
Strong
Medium
Weak
BUSINESS STRENGTH
1.00
2.33
3.67
5.00
MARKET ATTRACTIVENESS
5.00
3.67
2.33
1.00
Low
Medium
High
Clutches
Hydraulic
pumps
Joints
Flexible
diaphragms
Fuel
pumps
Aerospace
fittings
Relief
valve
Invest/grow
Selectivity/earnings
Harvest/divest

41. MARKET ATTRACTIVENESS
Note
Annual market growth rate
Historical profit margin
Competitive intensity
Technological requirements
Inflationary vulnerability
Overall market size
Energy requirements Environmental impact
Social/political/legal

42. COMPETITIVE POSITIONS
Market share
Share growth
Product quality
Brand reputation
Distribution network
Promotional effectiveness
Unit cost
Material supplies
R&D performance
Managerial personnel
Note

43. Strategic Business Unit
1. It is a single business or collection of related
businesses
2. It has a distinct mission
3. It has its own competitors

44. SBU Cont. 4. It has a responsible manager
5. It can benefit from strategic planning
6. It can be planned independently of other businesses

45. The Business Unit Strategic Process
Business Mission
Environmental Analysis
Goal Formulation
Strategy Formulation
Program Formulation
Implementation
Feedback and Control

46. Opportunity Matrix 1 2 3 4 Success Probability Opportunities
High
Low
1. Company develops a more powerful lighting system
2. Company develops a device for measuring the energy efficiency of any lighting system
3. Company develops a device for measuring illumination level
4. Company develops a software program to teach lighting fundamentals to TV studio personnel 1 2
High
Attractiveness 3 4
Low

47. Probability of Occurrence
Threat Matrix
Threats
Probability of Occurrence
High
Low
1. Competitor develops a superior lighting system
2. Major prolonged economic depression
3. Higher costs
4. Legislation to reduce number of TV studio licenses 1 2
High
Seriousness 3 4
Low

48. The Marketing Plan Executive Summary & Table of Contents
Current Marketing Situation
Opportunity & Issue Analysis
Objectives
Marketing Strategy
Action Programs
Projected Profit-and-loss
Controls

49. Factors Influencing Company Marketing Strategy
Competitors
Marketing
intermediaries
Publics
Suppliers
Marketing
information
system
planning
organization
organization and
implementation
Demographic/
economic
environment
Social/
cultural
Technical/
physical
Political/
legal
Product
Promotion
Place
Price
Target
customers

50. Steps in the Planning Process:
Analyzing Market Opportunities
Winning Markets through market-oriented strategic planning (chapter 4)
Marketing Information system (chapter 5)
Scanning Marketing environment (chapter 6)
Understanding consumer and business
markets (chapters 7 and 8)
Dealing with the competition (chapter 9)
Segmentation and selecting target market(s)
chapter 10)

51. Developing Marketing Strategies
Developing a positioning strategy (ch. 11)
New product development (ch. 12)
Impact of global markets on the strategy
(chapter 13)

52. Shaping the Market Offering
Product decisions (chapter 14)
Designing and Managing Services (15)
Price decisions (chapter 16)

53. Managing Marketing Programs
Marketing Channels (chapters 17-18)
Promotion decisions (chapters 19-21)
Managing the total Marketing effort (Ch. 22)

54. Review Corporate and division strategic planing Business unit planning
The marketing process
Product level planning
The marketing plan