strategic planning

Question 1

What are the benefits of Formal Planning

Answer 1

1. Encourage mgmt to think ahead systematically
2. Force managers to clarify objective and policies, clearer performance standards
3. Better coordinate company efforts
4. Company anticipate and respond quick to sudden env. changes

Question 2

What are the benefits company-wide strategic planning

Answer 2

Create and maintain fit between the organization’s objectives/resources and evolving market opps.

Resources & objectives + evolving market opportunities → LR profitability

Question 3

Strategic Planning Steps

Answer 3

1. Define company’s business and mission statement
2. Setting company objectives and goals
3. Design the business portfolio
   a) Analyse current business portfolio
   b) develop growth strategies

Question 4

Under the strategic planning steps -> design the business portfolio, what is the matrix under ‘analyse current business portfolio’?

Answer 4

BCG:

• stars: high-growth, high-share, need heavy investments to finance rapid growth, will slow down to be cash cows
• Cash Cows: low-growth, high-share, less investment to hold share, cash for biz
• Question marks: high growth, low share, req cash to hold share, build star or phase out
• Dog: low growth, low share, may generate cash to maintain, but bad

Question 5

What is the resource allocation for BCG?

Answer 5

1. Build: for Question mark to be Star
2. Hold: preserve Cash Cow mkt share, use cash for other SBUs
3. Harvest: Increase ST cash, all except Star
4. Divest: remove Dog SBUs

Question 6

What are the problems with the BCG matrix?

Answer 6

1. Difficult, time-consuming, costly to implement
2. Difficult to design SBUs and measure market share/growth
3. Focus on classifying current, no future planning
4. May lead to unwise expansion/diversification

Question 7

What is the other method to analyze current business portfolio?

Answer 7

SWOT analysis

1. Strength/Weakness → internal: production cost, marketing, employee, financial capabilities, tech, brand image
   a. Leverage on strengths → opportunities
2. Opportunities/Threats → external: social, demographic, tech, economic, political/legal, competitive [MATRIX: Attractiveness (y), Success probability (x)]
   a. Weakness can → threats

Question 8

Under strategic planning steps -> design business portfolio, what are the 2 growth strategies?

Answer 8

1. Strategic Planning gap
   - current portfolio v desired sales
   - intensive, integrative, diversification growth
2. Product-market expansion grid
   - market penetration (existing mkt + pdt), New stores (more sales) in current mkt areas, improve ads, prices, svc

• market development (new mkt, existing pdt), Identify new demographic/geographic mkts
• product development (existing mkt, new pdt), New style, flavor, color, modification
• diversification(new pdt + mkt), Start-up, buy new business

Question 9

What are the steps to conduct marketing analysis of company’s situation

Answer 9

1. Marketing Planning: develop strategic plan, marketing plan
2. Marketing Implementation: carry out plans
3. Control: measure + evaluate results, improve

Question 10

What are the characteristics of SBUs

Answer 10

THEIR OWN 
mission/target mkt
resources
competition
plan

Question 11

Under strategic planning steps, design the business portfolio, what are the steps to analyze current business portfolio?

Answer 11

1. analyse SBUS
2. decide which SBUs
3. develop growth strategies