#12 Strategic Planning Flashcards
Strategic Planning Process
- Defining the company mission
- Setting the company objectives and goals
- Designing the business portfolio
- Planning, marketing and other functional strategies
Defining the Company Mission
purpose of the organisation
provides personnel with a shared sense of opportunity, direction, significance and achievement
defines the business in terms of serving a particular customer group and/or needs
should not be too narrow or broad
Service Mission
- Helps to give the organisation a sense of direction and purpose.
- Helps the organisation to focus on its priorities.
- Helps the organisation to differentiate itself from its competitors.
- Helps to determine the relationships in each of the key markets with which the organisation interacts
Setting Company Objectives and Goals
quantified both in terms of yardstick and time
blueprint for planning and control.
Designing the Business Portfolio
assessment of the organisation’s resources
Steps in Business Portfolio Analysis (BCG)
Identify the Strategic Business Units (SBUs)
Assessment of attractiveness of SBUs
Strategies
Identify the Strategic Business Units (SBUs)
Single business
Own mission
Own competitors
Own managers
Controls certain resources
Will benefit from strategic planning
Can be planned independently
Assessment of attractiveness of SBUs
♦ Stars
High growth high share
High cash consumption due to rapid growth
Generally turn into cash cow
♦ Cash Cows
Low growth high share
Produce lots of cash to finance business
♦ Question Marks
Low share in high growth markets
High cash consumption just to hold
Can be built up to become stars or alternatively phased out
♦ Dogs
Low growth low share
May just cover own
The Strategies
♦ Build
Aims at increasing marketing share even at expense of short-term profits
Appropriate for ? whose share must grow if they are to become stars
♦ Hold
Objective is to preserve market share
Appropriate for strong cash cows
♦ Harvest
Objective is to increase short term cash flow
Appropriate for weak cash cow, ? or dogs
Divest
Objective is to sell or liquidate
Appropriate for dogs and ? that company cannot finance.
Planning Functional Strategies
more detailed planning must take place to meet the objectives and goals formulated in the strategic plan
Marketing role in Planning Functional Strategies
Provides a guiding philosophy
Provide input to strategic planners
Design Strategies for reaching Unit’s Objectives
