Lecture 6

Strategic Planning

PhD., E.Khodjaniyazov

Strategic Planning Process

• Strategic Planning involves developing an overall company strategy for long-run survival and growth.

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• This process involves:
• Defining a Mission: Statement of an organization’s purpose; should be market oriented.
• Setting Company Objectives: Supporting goals and objectives to guide the entire company.
• Designing a Business Portfolio: Collection of businesses and products that make up the company.
• Planning Functional Strategies: Detailed planning for each department designed to accomplish strategic objectives.

Designing the Business Portfolio

• The best portfolio is the one that best fits the company’s strengths and weaknesses to the opportunities in the environment.

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• The company must:
• analyze its current business portfolio or Strategic Business Units (SBU’s)
• decide which SBU’s should receive more, less, or no investment
• develop growth strategies for adding new products or businesses to the portfolio

Analyzing Current SBU’s:�Boston Consulting Group Approach

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Question Marks

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• High growth, low share
• Build into Stars/ phase out
• Requires cash to hold
• market share

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Stars

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• High growth & share
• Profit potential
• May need heavy
• investment to grow

Cash Cows

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• Low growth, high share
• Established, successful
• SBU’s
• Produces cash

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Dogs

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• Low growth & share
• Low profit potential

Relative Market Share

High Low

Market Growth Rate

Low High

Analyzing Current SBU’s:�GE Strategic Business-Planning Grid

Industry Attractiveness

Developing Growth Strategies

1. Market

Penetration

2. Market

Development

3. Product

Development

4. Diversification

Existing

Markets

New

Markets

Existing

Products

New

Products

Product/ Market Expansion Grid

Product/ Market Expansion Grid

• Market Penetration: increase sales to present customers with current products. How?

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• Market Development: develop new markets with current products. How?
• Product Development: offering modified or new products to current customers. How?
• Diversification: new products for new markets.

Marketing’s Role in Strategic �Planning

• Process of Selecting Target Consumers
• Market Segmentation: determining distinct groups of buyers (segments) with different needs.
• Market Targeting: evaluating and selecting which target segments to enter.
• Market Positioning: products distinctive and desirable place in the minds of target segments compared to competing products.
• Marketing Strategies for Competitive Advantage
• Market-Leader
• Market Challenger
• Market-Follower
• Market-Nicher

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The Marketing Process

Marketing Mix- The Four P’s

Target

Customers

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Intended

Positioning

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Product

“Goods-and-service”

combination that a

company offers a

target market

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Price

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Amount of money

that consumers

have to pay to obtain

the product

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Activities that

persuade target

customers to buy

the product

Promotion

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Company activities

that make the

product available

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Place

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Managing the Marketing Effort

Marketing Planning

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Develop Marketing

Strategies to

Achieve Marketing

Objectives

Develop

Marketing

Plans & Budget

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Marketing

Implementation

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Turn Marketing Plans

into

Action Plans

to Achieve

Marketing

Objectives

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Marketing Analysis of Company’s Situation

Control

Measure

Results

Evaluate

Results

Take

Corrective

Action

Elements of a Marketing Plan

Executive Summary

Current Marketing Situation

Threats and Opportunities

Objectives and Issues

Marketing Strategy

Action Programs

Budgets

Controls

Marketing Implementation

Marketing Strategy

Marketing Performance

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Implementation

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Climate and

Culture

Action

Programs

Decision

and

Reward

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Organizational

Structure

Human

Resources

Marketing Control

Set Marketing Goals

Measure

Performance

Evaluate

Performance

Take Corrective

Action

Marketing Audits