Company and marketing strategy Flashcards
Strategic planning
Strategic planning is the process of developing and maintaining a strategic fit between the organization’s goals and capabilities, and its
changing marketing opportunities.
Mission statement
The mission statement is the organization’s purpose; what it wants to accomplish in the larger environment.
A mission statement should:
* Not be myopic in product terms – should be market oriented
* Be meaningful and specific
* Be motivating
* Emphasize the company’s strengths
* Contain specific workable guidelines
* Not include the primary importance of making sales or profits
The business portfolio
The business portfolio is the collection of businesses and products that make up the company
Portfolio analysis
Portfolio analysis is a major activity in strategic planning whereby the management evaluates the products and businesses that make up the company.
Strategic business units (SBU):
- Company division
- Product line within a division
- Single product or brand
Analyzing the Current Business Portfolio
Identify strategic business units (SBUs) –>
Assess the attractiveness of its various SBUs –>
Decide how much support each SBU deserves
Boston Consulting Group (BCG) portfolio-planning method
Under the classic BCG portfolio planning approach, the company invests funds from mature, successful products and businesses (cash cows) to support promising products and businesses in faster-growing markets (stars and question marks), hoping to turn them into future cash cows.
Problems with Matrix Approaches
- Difficulty in defining SBUs and measuring market share and growth
- Time consuming
- Expensive
- Focus on current businesses, not future planning
The product/market expansion grid (Ansoff matrix)
Market penetration
Product development
Market development Diversification
Market penetration
Market penetration involves making more sales to current customers without changing its original product (e.g. new stores in current market areas) (safest)
Market development
Market development involves identifying and developing new markets for its current products. For example, new demographic markets, new groups of consumers (such as seniors), new geographic markets.
Product development
Product development involves offering modified or new products to current markets such as by moving into new product categories.
Diversification involves starting up or buying businesses beyond its current
products and markets. For example, the company could acquire a company that operates in different market segments with a different product mix.
- Related diversification: There are potential synergies to be realized between the existing business and the new product/market, e.g.: a leather shoe producer that starts a line of leather bag or accessories.
- Unrelated diversification: There are no potential synergies to be realized between the existing business and the new product/market, e.g.: a leather shoe producer that starts manufacturing phones
Business objectives vs marketing objectives
Business objectives:
* Build profitable customer relationships
* Invest in research
* Improve profits
Marketing objectives:
* Increase market share
* Create local partnerships
* Increase promotion
SWOT
Internal (controllable)
Strengths
* Reliable product
* Well respected
brand name worldwide
* Competitive prices
* Focused on a specialist niche market
Weaknesses
* Limited production
resulting long waiting list
* Outdated production methods
* Lack of marketing expertise
* Limited market research info
External (uncontrollable)
Opportunities
* Growing market
* High market
potential in some country
* Untapped market
potential in some country
Threats
* Volume manufacturers
could target specialist niche
market
* Increased number of
specialist car manufacturers in Europe
* Though EU legislation on
exhaust emission standards likely
