Definition

Strategic Management consists of Managerial decisions that Relate the organization to its environment, Guide internal activities and Determines long term organizational performance , They are precursors of many managerial activities.

The marketing planning process

Business mission Re-definition Situational Analysis SWOT analysis Marketing objectives
(strategic thrust, strategic objectives)

Marketing planning at the business level

Core strategy (target markets, competitive advantage, competitor targets) Marketing mix decisions Organization and implementation Control
D Jobber, Principles and Practice of Marketing, 2001 McGraw-Hill

Marketing planning at the product level

Levels of Strategic Planning

Corporate Level Division Level Business Unit Level Product level

Levels of Marketing Plan

STRATEGIC MARKETING PLAN: It lays out the target market and the value proposition that will be offered based on the analysis of the best Marketing Opportunities TACTICAL MARKETING PLAN: It identifies the marketing tactics ,including the product features ,Promotion , merchandising, pricing ,sales channel and service.

Corporate Level Strategic Planning:

Defining the Corporate Mission Establishing the strategic business units Assigning resources to each SBU Planning new businesses, downsizing, or terminating older businesses

Macroenvironment 2 The market Economic: inflation, interest rates, unemployment The market Social/cultural: age distribution, lifestyle changes, values, Market size, growth rates, trends and developments Competition attitudes Customers, whomajor competitors Who are the are they, their choice criteria, how, when, 1 Microenvironmentprocess technologies, materials Technological: new product and and rate us vs. the competition where doare their objectivesthey strategies What they buy, how do Political/legal: monopoly control, new laws, regulations on What arepromotion, price, distribution product, their strengths and weaknesses Ecological: segmentation: pollution, energy group, what benefits Market conservation, how docompetitors Market shares and size of customers

Situational Analysis

do Profitability analysis each group seek 3 Competition Distribution: power changes, channel attractiveness, growth Entry barriers potentials, physical distribution methods, decision makers and influencers

D Jobber, Principles and Practice of Marketing, 2001 McGraw-Hill

Mix Results Strategic Operating Effectiveness (by product, customer, Issues Analysis Marketing Results Product geographic region Marketing objectives (by product, Mix Price Sales Market segmentation Effectiveness customer, Promotion Market share Competitive advantage geographic Distribution Profit margins Core Strategic competences region Costs Positioning Issues Portfolio analysis Analysis Marketing Structures Marketing Marketing organisation Systems Marketing training Marketing information system Intra- and interdepartmental Marketing Marketing Marketing planning system communication Structures Marketing Systemssystem control

Internal marketing audit checklist Marketing Operating

D Jobber, Principles and Practice of Marketing, 2001 McGraw-Hill

SWOT analysis
Source

Strengths

Weaknesses

Internal (controllable)

Opportunities

Threats

External (uncontrollable)

D Jobber, Principles and Practice of Marketing, 2001 McGraw-Hill

Establishing strategic business units

Definition of SBU: It is a single business or collection of related businesses that can be planned separately from the rest of the company It has its own set of competitors It has a manger who is responsible for strategic planning and profit performance and who controls most of the factors affecting profits

Business Portfolio Evaluation Models:

Boston Consultancy Approach General Electric Approach

BCG Matrix
Market Growth Rate 10% 0

STARS

20%

QUESTION MARKS

CASH COWS

DOGS

10 x Relative Market Share

1x

0.1x

Strategic objectives and the BCG Matrix

Stars
q q

Build sales and/or market share Invest to maintain/increase leadership position Repel competitive challenges
Cash cows
q q q

Problem children
q q

Build selectively Focus on defendable niche where dominance can be achieved Harvest or divest the rest

Hold sales and/or market share Defend position Use excess cash to support stars, selected problem children and new product development

Dogs
q q q

Harvest or Divest or Focus on defendable niche

Strategic objectives and the BCG Matrix

Problem children
q

Stars
q q

Build sales and/or market share Invest to maintain/increase leadership position Repel competitive challenges

Build selectively Focus on defendable niche where dominance can be achieved Harvest or divest the rest

Cash cows
q q q

Hold sales and/or market share Defend position Use excess cash to support stars, selected problem children and new product development

Dogs
q q q

Harvest or Divest or Focus on defendable niche

Strategic objectives and the BCG Matrix

Stars
q q

Problem children
q q

Build sales and/or market share Invest to maintain/increase leadership position Repel competitive challenges

Build selectively Focus on defendable niche where dominance can be achieved Harvest or divest the rest

Cash cows
q q q

Hold sales and/or market share Defend position Use excess cash to support stars, selected problem children and new product development

Dogs
q q q

Harvest or Divest or Focus on defendable niche

Strategic objectives and the BCG Matrix

Stars
q q

Problem children
q q

Build sales and/or market share Invest to maintain/increase leadership position Repel competitive challenges

Build selectively Focus on defendable niche where dominance can be achieved Harvest or divest the rest

Cash cows
q q q

Hold sales and/or market share Defend position Use excess cash to support stars, selected problem children and new product development

Dogs
q q q

Harvest or Divest or Focus on defendable niche

BCG Matrix
Market Growth Rate 10% 0

STARS QUESTION MARKS Hotel,Agri Business FMCG

20%

CASH COWS Cigarettes

10 x Relative Market Share 1x

DOGS

0.1x

The General Electric Model

Strong M H a r k e M t A t t r L a Business Strength Medium Weak

Market Attractiveness
Overall Market Size Annual Market Growth rate Historical Profit Margin Competitive Intensity Technological Requirements Inflatory Vulnerability

Some Parameters of Business Strength

Market Share Share Growth Product Quality Brand Reputation Distribution Network Promotional Effectiveness Productive Capacity Unit Costs

Strategies for Growth of Businesses

Growth within current businesses: Intensive Growth Acquire businesses related to current businesses: Integrative Growth Add attractive businesses unrelated to current businesses: Diversification Growth.

Integrative Growth
Forward Integration Backward Integration Horizontal Integration

Diversification Growth
Concentric Diversification Horizontal Diversification Conglomerate Diversification

Downsizing older businesses

Downsizing: Releases energy Reduces Cost

Ansoffs Product-Market Expansion Grid

Current Products New Products

Current Markets

1 Market Penetration Strategy 2 Market Development Strategy

3 Product Development Strategy 4 Diversification Strategy

New Markets

Strategic options for increasing sales volume

Increase sales volume Market penetration Market expansion Product development Market development Entry into new markets
D Jobber, Principles and Practice of Marketing, 1998 McGraw-Hill

Strategic options for increasing sales volume

Increase sales volume Market penetration Market expansion Product development Market development Entry into new markets
D Jobber, Principles and Practice of Marketing, 1998 McGraw-Hill

Win competitors customers Buy competitors

Discourage competitive entry

Strategic options for increasing sales volume

Increase sales volume Market penetration Market expansion Product development Market development Entry into new markets
D Jobber, Principles and Practice of Marketing, 1998 McGraw-Hill

Convert non-users Increase usage rate

Strategic options for increasing sales volume

Increase sales volume Market penetration Market expansion Product development Market development Entry into new markets
D Jobber, Principles and Practice of Marketing, 1998 McGraw-Hill

Product line extension Product replacement

Innovation

Strategic options for increasing sales volume

Increase sales volume Market penetration Market expansion Product development Market development Entry into new markets
D Jobber, Principles and Practice of Marketing, 1998 McGraw-Hill

Promote new uses Enter new segments

Business Unit Strategic Planning

Business Mission SWOT Analysis Goal Formulation Strategy Formulation Programme Formulation and Implementation

Step 2: Mission Statement

Mission statement describes The businesses the firm is in. It includes why the organization exists, Chief products and services, The markets served The values provided

STEP 3 : SET OBJECTIVES

Objectives are kinds of results the firm seeks to achieve. Objectives are set at all levels in the company: Top Management Level: Long term objectives Middle level Management: Medium term objectives Lower Level Management: Short term objectives

Step 4: SWOT Analysis.

Strength : Strength is a condition internal to the organisation that may lead to a customer benefit or competitive advantage Weakness : Weakness is a condition internal to the organisation that may lead to negative customer value or competitive advantage

SWOT Analysis
Opportunity : It is an issue or condition in the environment that may help it to reach its goals. Threat:It is an issue or condition in the environment that may prevent it from reaching its goals.

Strategic Formulation
Porters Generic Strategies: Overall Cost Leadership Differentiation Focus

Marketing Program Formulation & Implementation

Marketing Programmes are basic decisions on marketing expenditures, marketing mix, and marketing allocation to transform marketing strategy into action.

Contents of a Marketing Plan

Executive Summary and table of contents. Current Marketing Situation Opportunity and issue analysis Objectives Marketing Strategy:Planning on the 4 P,s. Action Programmes:Marketing Programmes derived from Marketing Strategy. Financial Projections: Budget from Action Plans Implementing Controls