Lecture 2a Week 2a BBA 2K10 (A)

Lecture 2a Week 2a BBA 2K10 (A)
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Companywide strategic planning in its four steps
Market oriented mission statement

Company objectives and goals How to design business portfolios and develop growth strategies; BCG Matrix and Expansion Grid
Companywide Strategic Planning:

Defining Marketings Role
Strategic Planning Strategic planning is the process of developing and maintaining a strategic fit between the organizations goals and capabilities and its changing marketing opportunities
Companywide Strategic Planning: Defining Marketings Role

Strategic Planning Purpose: To find ways in which the company can best use its strengths to take advantage of attractive opportunities in the environment

Steps in the Strategic Planning Process

Defining a Market-Oriented Mission
The mission statement is the organizations purpose, what it wants to accomplish in the larger environment
Market-oriented mission statement defines the business in terms of satisfying basic customer needs
The Mission Statement
Questions the mission statement should answer include:

What is our business? Who is our customer? What do consumers value? What should our business be?
Mission statements should be market oriented, not product oriented.
The Mission Statement

Should be realistic Should be specific Should fit the market environment Should be based on distinctive competencies Should be motivating
Market-Oriented Business Definitions

Setting Company Objectives and Goals

Business objectives Marketing objectives
Setting Firm Objectives and Goals
The mission should be translated into supporting objectives for each level of management.
Creates a hierarchy of objectives that are
consistent with one another. For example:

Business objective: Increase profits. Marketing objective: Increase market share of
domestic and international markets.

Designing the Business Portfolio The business portfolio is the collection of businesses and products that make up the company

Analyzing the Current Business Portfolio Analyzing the business portfolio is the process by which management evaluates the products and businesses making up the company

Defining Marketings Role Analyzing the Current Business Portfolio
1.
2. 3.
Identify key businesses (strategic business units, or SBUs) that make up the company Assess the attractiveness of its various SBUs Decide how much support each SBU deserves

Defining Marketings Role Analyzing the Current Business Portfolio Strategic business unit (SBU) is a unit of the company that has a separate mission and objectives that can be planned separately from other company businesses Company division Product line within a division Single product or brand

Analyzing the Current Business Portfolio Assess the attractiveness of its various SBUs and decide how much support each deserves in terms of:
Industry attractiveness Strength of the SBUs position in the market or industry

Analyzing the Current Business Portfolio
The Boston Group Approach (BCG Matrix)
Growth share matrix is a portfolio-planning method that evaluates a companys SBUs in terms of their market growth rate and relative share.

The Boston Group Approach
SBUs are classified as:

Stars
Cash cows Question marks
Dogs

The Boston Group Approach
Stars are high-growth, high-share businesses or products requiring heavy investment to finance rapid growth. They will eventually turn into cash cows. Cash cows are low-growth, high-share businesses or products that are established and successful SBUs requiring less investment to maintain market share

Analyzing the Current Business Portfolio

The Boston Group Approach Question marks are low-share business units in high-growth markets requiring a lot of cash to hold their share Dogs are low-growth, low-share businesses and products that may generate enough cash to maintain themselves but do not promise to be large sources of cash


Defining Marketings Role Developing Strategies for Growth and Downsizing
Product/market expansion grid is a tool for identifying company growth opportunities through market penetration, market development, product development, or diversification

Developing Strategies for Growth and Downsizing

Product Market Expansion Grid
Market Penetration: Making more sales to

current customers without changing its product.
Market Development:
Identifying and developing new markets for its current products.
Product Development: Offering modified

or new products to current markets.
Diversification: Starting up or buying

businesses outside its current products and markets

Developing Strategies for Growth and Downsizing
Downsizing is the reduction of the business portfolio by eliminating products or business units that are not profitable or that no longer fit the companys overall strategy

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Lecture 2a Week 2a BBA 2K10 (A)

Companywide strategic planning in its four steps

Market oriented mission statement

Companywide Strategic Planning:

Companywide Strategic Planning: Defining Marketings Role

Companywide Strategic Planning:

Steps in the Strategic Planning Process

Companywide Strategic Planning: Defining Marketings Role

The Mission Statement

Questions the mission statement should answer include:

Mission statements should be market oriented, not product oriented.

The Mission Statement

Market-Oriented Business Definitions

Companywide Strategic Planning: Defining Marketings Role

Business objectives Marketing objectives

Setting Firm Objectives and Goals

consistent with one another. For example:

domestic and international markets.

Companywide Strategic Planning:

Companywide Strategic Planning:

Companywide Strategic Planning:

Companywide Strategic Planning:

Companywide Strategic Planning:

Industry attractiveness Strength of the SBUs position in the market or industry

Companywide Strategic Planning:

Companywide Strategic Planning:

SBUs are classified as:

Companywide Strategic Planning:

Companywide Strategic Planning:

Analyzing the Current Business Portfolio

Companywide Strategic Planning:

Companywide Strategic Planning:

Companywide Strategic Planning:

Developing Strategies for Growth and Downsizing

Market Penetration: Making more sales to

Identifying and developing new markets for its current products.

Product Development: Offering modified

Diversification: Starting up or buying

Companywide Strategic Planning: Defining Marketings Role

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