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Corporate and Division Strategic Planning

Defining the corporate mission Establish SBUs Assigning resources to each SBUs Assessing growth opportunities

Defining the Corporate Mission

Mission Statement
The reason for companys existence and its responsibilities to stakeholders The customer needs that are satisfied by the firms products or services( areas of product and market involvement) The extent of specialization within each product-market area Amount of product-market diversification desired by the management. Management's performance expectation from the company Other general guidelines for overall business strategy ( such as technologies to be used & role of R&D)
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3 major characteristics of a good mission statement


Focus on limited number of goals Focus on major policies and values the company wants to honor Defines the competitive scopes in which the company will operate Industrial Scope Products & Application Scope Competence Scope Market Segmentation Scope Vertical Scope Geographical Scope
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DHL DHL will become the acknowledged global leader in the express delivery of documents and packages. Leadership will be achieved by establishing the industry standards of excellence for quality of service and by maintaining the lowest cost position relative to our service commitment in all markets of the world. McDonalds UK mission Statement To be the United Kingdoms number one favourite quick service restaurant. The company will be led by the needs of our customers and commitment to the welfare and development of our staff. Mcdonalds will provide great tasting food, backed by excellent operators and friendly service in a relaxed, safe and consistent restaurant environment. Our customers will be serviced in a caring, welcoming and professional manner. These goals will be implemented in a way which optimises the highest operational standards with efficiency and profitability.

Defining the Business

Xerox We make copying equipment- We help improve office productivity Columbia Pictures We make movies- We market entertainment Encyclopaedia Britannica We sell encyclopaedias-We distribute information
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Assigning Resources to SBUs


The Growth Share Matrix ( BCG Matrix) Strategies
Build, Hold, Harvest, Divest

SBU Characteristics
Serves a homogeneous set of markets with a limited number of related technologies Serves a unique set of product- markets Has control over the factors necessary for successful performance, such as R&D, production, marketing, and distribution Has responsibility for its own profitability

Planning New Business/ Downsizing older ones


Intensive Growth Integrative growth
Backward integration Forward integration Horizontal integration

Diversification Downsizing and Divesting Old Business

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Business Unit Strategic Planning


Business Mission SWOT Analysis External Environment analysis Opportunities Threats Internal environment Analysis Strengths Weaknesses
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Opportunity Matrix

Success Probability High Low


High

Low
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Threat Matrix
Probability of Occurrence High
High

Low

Low

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Performance -Importance Matrix

Performance Low

High

High

Low

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Goal FormulationHierarchical,quantifiable,realistic, consistent Strategic Formulations


Market Strategy Overall cost Leadership Differentiation Focus Strategic Alliances Product& Service Alliance Promotional Alliance Logistics alliances Pricing Collaborations
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Program Formulation Implementation

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Skills

Structure

Style

Shared Values

Strategy

Staff

Systems
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Feedback And Control

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The Marketing Process


The Value Delivery Sequence Steps in the Planning Process Analyzing Market Opportunities Developing Market Strategies Planning Marketing Programs Managing the Marketing Effort

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Contents of a Marketing Plan


1. Executive Summary 2. Situation Analysis Current Marketing Scenario/Market Summary
Target Market, Market Demographics,Behaviour Factors,Market Needs, Market Trends, Market Growth

SWOT Analysis Competition Product Offering KSF Critical Issues


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3. Marketing Strategy Mission Marketing Objectives Financial Objectives Target Market Positioning Strategies Marketing Mix Marketing Research
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4.Financials Break Even Analysis Sales Forecasts Expense Forecast 5. Controls Implementation Marketing Organisation Contingency Planning
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PORTERS 5 FORCES MODEL


Threat of New Entry

Bargaining power Of Suppliers

Rivalry Among Existing Firms

Bargaining power Of Buyers

Threat of Substitute Product & Services


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The Forces New entrants, potential entrants and the threat of entry; Substitute products/services; Buyers and Buyer power; Suppliers and supplier power; Competitors and the nature of inter-firm rivalry.
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What is the threat of entry into the industry and from where does it arise? Where are present and potential substitute products/services located and what is their impact or likely impact on the organization and the industry? Who are the buyers and what is the extent of their power with regard to the organization? Who are our suppliers and what is their power with regard to the organization? Who are our present and potential competitors and how intense is (or will be) present and potential competitive rivalry?
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Potential entrants. Threat of entry depends on the extent of barriers to entry Is the potential customer base sufficient to support new operations? How heavy is the capital investment requirement in the industry? Is finance available? Is there a strong brand image to overcome? How costly will be access to distribution channels? What operating cost advantages might existing competitors hold (e.g. experienced staff, patent protection, etc.) ? Is there governmental/legislative protection afforded to existing organizations? How vigorously will existing operators react against new entry attempts?

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Substitutes products/services will be more prevalent if:

Customers perceive other offers to perform the same function as ours; Substitute products offer higher value for money Substitute products earn higher profits.

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Buyer power is likely to be high if:


There is a concentration of buyers; There are alternative sources of supply; Buyers have access to useful information and then to shop around; There is a threat of backward integration if the buyer does not obtain satisfactory supplies and prices.

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Supplier power is likely to be high if:


There is a concentration of suppliers; The costs of switching from one supplier to another are high; Suppliers are likely to integrate forward if they do not obtain the price/profits they seek; The organization has little countervailing
power.

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Intensity of rivalry will be greater If:


Competitors are of equal size and are seeking dominance; The market is mature and subject to shake out activities; High fixed costs provoke price wars to maintain capacity; Product homogeneity necessitates activity to maintain share;

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Eight most significant potential competetive advantage


A superior product benefit A percieved advantage Low cost operations Legal advantage Superior contacts Superior knowledge Scale advantages Offensive attitudes
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Creating Barriers to Entry


Product Differentiation Advantage
Superior quality,Superior levels of service,strong brand names,high levels of brand loyalty,distribution strengths

Absolute cost advantage


Investment in R&D,high levels of production technology,patents, previleges access to scarce resources,vertical integration,distribution access and efficiency

Scale related advantage


High production and sales level
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