Chapter 2.

Developing Successful
Organizational and
Marketing Strategies

Learning Objectives
1. Discuss how an organization assesses where it is now and where it seeks to be.
i.
ii.

Business Portfolio Analysis

Diversification Analysis

2. Explain the three steps of the planning phase of the strategic marketing process.
i. SWOT Analysis
ii. Market-Product Focus and Goal Setting
iii. Marketing Program

MAKING THE WORLD A BETTER PLACE,

ONE SCOPE AT A TIME!
linked prosperity

3 Part Mission Statement

1. Product - finest quality
2. Economic sustainable financial growth
3. Social make the world a better place
Organizational & Marketing Strategies
1. Fair Trade
2. B-Corp Certified
3. Partnershop Program

Market share of the leading ice cream brands in the United States in 2016,
based on sales

APPLYING MARKETING METRICS

How Well is Ben & Jerrys Doing?
Dollar Sales and Dollar Market Share
Dollar Sales ($) = Average Price X Quantity Sold

Dollar Market Share (%) =

I. SETTING STRATEGIC DIRECTIONS

1. A Look Around: Where Are We Now?
a. Competencies
i.

Competitive Advantage is a unique strength relative to competitors that

provides superior returns, often based on quality, time, cost, or innovation.

b. Customers
c. Competitors

I. SETTING STRATEGIC DIRECTIONS

2. Growth Strategies: Where Do We Want to Go?
a. Business Portfolio Analysis by The Boston Consulting Groups (BCG)
The purpose is to determine which SBU:
Generate cash or
Requires cash to fund the organizations growth opportunities

SBU (Strategic Business Unit) : A subsidiary, division, or unit of an organization that markets a set of related
offering to clearly defined group of customers is referred to as a strategic business unit.

Business Portfolio Analysis (BCG Matrix)

Market Growth Rate

High

Stars

Question Marks

Cash Cows

Dogs

Low
High

Low

Relative Market Share

I. SETTING STRATEGIC DIRECTIONS

2. Growth Strategies: Where Do We Want to Go?
a. Business Portfolio Analysis
i.

Question marks (or problem children - upper right)

Are SBUs with a low share of high-growth markets.
Require large injections of cash to maintain or increase market share.
Management chooses which of these SBUs to invest in and phase out
the rest (managements dilemma).

I. SETTING STRATEGIC DIRECTIONS

2. Growth Strategies: Where Do We Want to Go?
a. Business Portfolio Analysis
ii. Stars (upper left)
Are SBUs with a high share of high-growth markets.
Require extra cash to finance their own rapid future growth.
Are likely to become cash cows when their growth slows.

I. SETTING STRATEGIC DIRECTIONS

2. Growth Strategies: Where Do We Want to Go?
a. Business Portfolio Analysis
iii. Cash cows (lower left)
Are SBUs that generate more cash than they can use.
Have a dominant share of slow-growth markets.
Provide cash to cover the organizations overhead and
Enable the organization to invest the excess cash in other SBUs.

I. SETTING STRATEGIC DIRECTIONS

2. Growth Strategies: Where Do We Want to Go?
a. Business Portfolio Analysis
iv. Dogs (lower right)
Are SBUs with a low share of slow-growth markets.
May generate enough cash to sustain themselves.
May not become winners for the organization.
Dropping dogs may be required if they consume more cash than
they generate unless these conditions exist:
Relationship with other SBUs.
Competitive considerations.
Potential strategies alliances that benefit the firm.

FIGURE 2-4 BCG business portfolio analysis for Apples consumer

SBUs starting in 2013 and projected to 2016.

I. SETTING STRATEGIC DIRECTIONS

2. Growth Strategies: Where Do We Want to Go?
a. Business Portfolio Analysis
The primary strength
Lies in forcing a firm to place each of its SBUs in the growth-share matrix, which
Suggest which SBUs will be cash producers and cash users in the future.
Weakness of this analysis arise from the difficulty in:
Getting the needed information.
Incorporating competitive data into business portfolio analysis.

I. SETTING STRATEGIC DIRECTIONS

2. Growth Strategies: Where Do We Want to Go?
b. Diversification Analysis
i.

Market Penetration : increasing sales of current products in current markets

ii. Market Development: selling current products to new markets

iii. Product Development : selling new products to current markets
iv. Diversification : selling new products to new markets

FIGURE 2-5 Four alternative market-product strategies for Ben & Jerrys
to expand sales revenues using diversification analysis

II. THE STRATEGIC MARKETING PROCESS

How do we allocate our resources to get to where we want to go?
How do we convert our plans into actions?
How do our results compare with our plans and do deviations require new
plans?

FIGURE 2-6 The strategic marketing process has three phases:

planning, implementation, and evaluation

II. THE STRATEGIC MARKETING PROCESS

Step 1: Situation (SWOT) Analysis
Identity Industry Trends
Analyze Competitors
Assess the Organization
Research Present and Prospective Customers

FIGURE 2-7 Ben & Jerrys SWOT analysis that serves as the basis
for management actions regarding growth

II. THE STRATEGIC MARKETING PROCESS

Step 1: Situation (SWOT) Analysis
a. SWOT Analysis Actions
i.

Strengths : Build on Strength

ii. Weaknesses : Correct a Weakness

iii. Opportunities : Exploit an Opportunity
iv. Threats : Avoid a Disaster-Laden Threat

II. THE STRATEGIC MARKETING PROCESS

Step 2: Market-Product Focus and Goal Setting
a. Market Segmentation is the process of aggregating prospective buyers
into groups, or segments that have common needs and will respond
similarly to a marketing action.
b. Points of Difference refer to those characteristics of a product that
make it superior to competitive substitutes.

II. THE STRATEGIC MARKETING PROCESS

Step 3: Marketing Program
a. Product Strategy
b. Price Strategy
c. Promotion Strategy
d. Place (Distribution) Strategy

FIGURE 2-8 The four Ps elements of the marketing mix must

be blended to produce
a cohesive marketing program