Chapter 2 ("Strategic Planning") Flashcards
target markets
groups of customers
Firms typically identify different target markets they want to reach when they are developing their value propositions.
value proposition
A value proposition is a thirty-second “elevator speech” stating the specific benefits a product or service offering provides a buyer. It shows why the product or service is superior to competing offers.
strategic planning
Strategic planning can occur at 3 different levels in an organization:
Strategic planning is a process that helps an organization allocate its resources to capitalize on opportunities in the marketplace.
Strategic planning can occur at different levels (corporate, business, and functional) in an organization. The number of levels may vary. However, if a company has multiple planning levels, the plans must be consistent, and all must help achieve the overall goals of the corporation.
Corporate Level: PepsiCo, Inc.
Business Level: PepsiCo Americas Beverages, PepsiCo Americas Foods, PepsiCo International
Functional Level: Marketing Department, Accounting Department, HR Department
contract manufacturing
When companies hire manufacturers to produce their products in another country.
strategic planning process
A process that helps an organization allocate its resources under different conditions to accomplish its objectives, deliver value, and be competitive in a market-driven economy.
franchising
Granting an independent operator the right to use your company’s business model, techniques, and trademarks for a fee.
export
Sell products to buyers in foreign markets.
General Electric (GE) approach
A portfolio planning approach that examines a business’s strengths and the attractiveness of industries.
portfolio
A group of business units owned by a single firm.
joint venture
An entity that is created when two parties agree to share their profits, losses, and control with one another in an economic activity they jointly undertake.
product development strategy
Creating new products or services for existing markets.
corporate level plans
Plans developed for the corporation as a whole take place at the corporate level.
portfolio planning approach
An approach to analyzing various businesses relative to one another.
situation analysis
An assessment of an organization’s internal and external environments.
harvest
When a firm lowers investment in a product or business.
direct investment
Owning a company or facility overseas.
green marketing
Marketing environmentally safe products and services in a way that is good for the environment.
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.
marketing plan
A document that is designed to communicate the marketing strategy for an offering. The purpose of the plan is to influence executives, suppliers, distributors, and other important stakeholders of the firm so they will invest money, time, and effort to ensure the plan is a success.
business level plans
Plans developed for each strategic business unit typically have their own mission statement.
star
Business or offering with high growth and a high market share.
market penetration strategy
Selling more of existing products and services to existing customers.
cash cow
Business or offering with a large share of a shrinking market.
divest
When a firm drops or sells a product or business.
