Chapter 3

The Role of
Marketing in
Strategic
Planning

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Would you tell me, please, which way

I ought to go from here?
-Alice
(from Lewis Carrolls Alice in Wonderland)

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Chapter Objectives
Explain company-wide strategic planning
Understand the concepts of stakeholders,
processes, resources, and organization as
they relate to a high-performing business
Explain the four planning activities of
corporate strategic planning

2006 Pearson Education, Inc.

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Chapter Objectives
Understand the processes involved in
defining a companys mission and setting
goals and objectives

Discuss how to design business portfolios

and growth strategies
Explain the steps involved in the business
strategy planning process
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Market-Oriented Strategic
Planning
Market-oriented strategic planning is the
managerial process of developing and
maintaining a feasible fit between the
organizations objectives, skills and resources
and its changing market opportunities

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Key Ideas Defining Strategic

Planning
1. Manage companies businesses as an
investment portfolio
2. Assess future profit potential

3. Develop the strategy itself

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Nature of High-Performance
Business

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Stakeholders
Processes
Resources
Organization

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The Relationship Between

Analysis, Planning,
Implementation, and Control

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The High Performance Business

(Excerpted from the first quarter 1992 issue of Prism, the quarterly journal for senior managers,
published by Arthur D. Little, Inc.)

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Dynamic Relationships Among Stakeholder

Groups in High Performance Businesses

(Excerpted from the fourth quarter 1992 issue of Prism, the quarterly journal for senior managers,
published by Arthur D. Little, Inc.)

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Corporate Strategic Planning

Corporate headquarters sets planning
process into motion
Greater need for empowerment of
employees
Hospitality and tourism industries are
international and multi-cultural
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Defining the Corporate

Mission
Mission is shaped by History

Resources determine possibilities

Mission should be based on distinctive
competencies
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Competitive Scopes
Industry scope range of industries that the
company will consider
Products and applications scope rang of
products and applications in which the
company will participate
Competencies scope range of
technological and other core competencies
the company will master and leverage

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Competitive Scopes
Market-segment scope the type of market
or customers the company will serve
Vertical scope the number of channel levels
from raw materials to final product and
distribution in which the company will engage
Geographic scope the range of regions,
countries or country groups where the
corporation will operate

2006 Pearson Education, Inc.

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Establishing Strategic
Business Units
A single business or a collection of related
businesses that can be planned for
separately from the rest of the company
It has its own set of competencies

It has a manager who is responsible for

strategic planning and profit performance
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Assigning Resources to
Each SBU
Analytical tools, such as the Boston
Consulting Group (BCG) model, are
used to classify businesses by profit
potential

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Question mark

Cash cow

Dog

High

Star

Low

Market growth rate

BCG Growth-Share Matrix

High

Low

Relative market share

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Developing Growth
Strategies

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Diversification Growth
Concentric diversification strategy

Horizontal diversification strategy

Conglomerate diversification strategy

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Integrative Growth
Backward integration (acquiring a supplier)
Forward integration (acquiring distributor of
your product)
Horizontal integration (acquiring a
competitor)

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Business Strategy Planning

Business Mission
SWOT Analysis
Strengths, Weaknesses, Opportunities,
Threats

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Business Strategy Planning

Internal Environment Analysis
(Strengths and Weaknesses Analysis)

External Environmental Analysis

(Opportunities and Threats Analysis)

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Business Strategy Planning

Goal Formulation
Arrange from most to least important
State quantitatively
Measurable and realistic
Consistent

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Business Strategy Planning

Strategy Formulation
Strategies are the paths to goals
3 generic types
Overall cost leadership
Differentiation
Focus
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Business Strategy Planning

Strategic Alliances cooperative
agreements between organizations that
allow them to benefit from each others
strengths

What are some strategic alliances in the

hospitality and tourism industry?
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Business Strategy Planning

Program formulation
Formulate programs that support the strategy

Implementation
To implement strategy, required resources
and employee buy-in are necessary

Feedback and Control

Track results and monitor new developments
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Business Strategy Planning

Unique Challenges of the hotel industry
complicate the process of strategic planning
Major chains commonly do not own all
properties that they manage
Owners of hotel-resorts often show little
interest or knowledge of their property (egocapital concept)
Professional managers often are not trained
in strategic planning
Global strategic alliances may further
complicate the planning process
2006 Pearson Education, Inc.
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Best Practices
Howard Schultz brings the European
coffee experience to America via
Starbucks
Focus on growth, new products, new
retail channels to stave off competition

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Best Practices in Strategic

Planning
What did they do?

The Inn on Biltmore Estates

Tricon Global Restaurants (Yum Brands)
Jack in the Box
The Las Vegas Hilton
Hyatt Hotels
Boston Greater Convention and Visitors Bureau

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Key Terms
Ansoff productmarket expansion grid
Backward integration
Competencies scope

Concentric diversification strategy

2006 Pearson Education, Inc.
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Key Terms
Conglomerate diversification strategy
Corporate mission statement
Forward integration

Geographic scope
2006 Pearson Education, Inc.
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Key Terms
Growthshare matrix
Horizontal diversification strategy
Horizontal integration

Industry scope
2006 Pearson Education, Inc.
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Key Terms
Macroenvironmental forces
Microenvironmental forces
Marketing opportunity

Market-oriented strategic planning

2006 Pearson Education, Inc.

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Key Terms
Market-segment scope
Products and applications
Strategic alliances
Strategic business units (SBUs)
Vertical scope
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