Chapter 2: Strategic Planning Flashcards
Value Proposition
statement that summarizes the key benefits or value for target customers. It explains why customers should buy a product, why stakeholders should donate, or why prospective employees may want to work for an organization.
Target Markets
The group of customers toward which an organization directs its marketing efforts.
Corporate Level Plans
plans developed for the whole corporation as a whole take place at the corporate level.
Strategic Planning
process that helps an organization allocate its resources to capitalize on opportunities in the marketplace.
Strategic Business Unit (SBU)
business or product line within an organization that has its own competitors, customers, and profit center for accounting purposes.
Business Level Plans
plans developed for each SBU that have their own mission statement.
First Mover Strategy
corporate level strategy theorizing that being the first organization to offer a product in the marketplace will be the long-term market leader.
Second Mover Strategy
corporate level strategy theorizing that closely observing the innovations of the first movers, and then improving on them can help an organization gain advantage in the marketplace.
strategic planning process
conducting a situation analysis and developing the organization’s mission statement, objectives, value proposition, and strategies
Strategic Planning Process Steps
- Inputs to the Planning Process
a. Evaluate the External Environment (economy, competition, political-legal environment, etc.)
b. Evaluate the Internal Environment (the firm’s financial and human resources, technological capabilities, etc.) - Mission
- Objectives
- Value Proposition and 5. Strategy Formulation
Situation Analysis
involves analyzing both the external and internal environments.
SWOT Analysis
strengths, weaknesses, opportunities, threats.
a. Strengths and weaknesses are internal factors and are somewhat controllable.
b. Opportunities and threats are factors that are external to the firm and largely uncontrollable.
Five Forces Model
Direct competition, potential threats, bargaining power of buyers, bargaining power of suppliers, substitutes
Competitive analysis
involves looking at any information available on competitors.
Mystery Shoppers
people who act like customers, that visit a business to learn about their customer service and products.
Green marketing
marketing environmentally safe products and services in a way that is good for the environment.
Mission statement
states the purpose of the organization and why it exists.
Objectives
what organizations want to accomplish - the end results they want to achieve - in a given time frame.
Strategies
means to the ends, or what a firm’s going to do to meet its objectives.
Marketing Plan
strategic plan at the functional level that provides a firm’s marketing group with direction.
Market Penetration Strategies
focus on increasing a firm’s sales of its existing products to its existing customers.
Product Development Strategies
creating new products for existing customers.
Market Development Strategies
focus on entering new markets with existing products.
export
sell their product to buyers abroad.
license
sell the right to use some aspect of their production processes, trademarks, or patents to individuals or firms in foreign markets.
Franchising
longer-term form of licensing that is extremely popular with service firms.
Contract Manufacturing
allows companies to hire manufacturers to produce their products in another country.
Joint ventures
combine the expertise of investments of two companies and help companies enter foreign markets.
Direct investment
owning a company or facility overseas.
Diversification strategies
entering new markets with new products or doing something outside a firm’s current businesses.
Portfolio
a group of businesses
Portfolio planning approach
involves analyzing a firm’s entire collection of businesses relative to one another.
Boston Consulting Group Matrix
Dogs, Stars, Question Marks, Cash Cows
Star
product with high growth and a high market share.
Cash Cows
product with low growth and a high market share.
have a large share of a shrinking market.
generate a lot of cash but do not have a long-term future.
Question Marks
product has a low share of a high-growth market.
must decide whether or not they will become stars or eliminate/sell them.
Dogs
product with low growth and low market share.
do not make money and do not have a promising future.
Harvest
firm lowers investment in a product.
Divest
firm drops or sells a product.
GE Approach
General Electric; examines a businesses strengths and the attractiveness of the industry in which it competes.
GE Traffic Light
Red: harvest or divest products; stop investing in new products, markets or technology.
Yellow: hold market share
Green: build market share; invest in new products, market or technology.
