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Chapter 2

BUS 343 Chapter Notes - Chapter 2: Swot Analysis, Strategic Planning, Marketing Strategy


Department
Business Administration
Course Code
BUS 343
Professor
Jason Ho
Chapter
2

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Chapter 2: Making Strategic
Marketing Decisions
“Plan Well and Prosper
Planning enables a firm to meet the challenges of this dynamic environment and to
control its own destiny
Strategic Planning managerial decision process that matches the organizations
resources and capabilities to its market opportunities for long-term growth and survival
oFocus on firms ability to respond to changes and opportunities in its environment
Top management team defines the firms purpose (mission) and what the firm is hoping
to achieve over the next few years (organizational objectives)
Strategies reflect what a firm is going to do to achieve an objective
Tactics reflect how a strategy is going to be implemented
Strategic planning can occur in two different levels
oOverall corporate strategic planning determines the organizations different
business and product pursuits
oIndividual business units do strategic planning for their products
Since strategic planning is usually 3 5 years, firms make 1 year plans called marketing
plans
oDevelops lower-level strategies and tactics for achieving the objectives
oMarketing plan contains details regarding the marketing mix elements, strategic
plan doesnt
Tactics at Strategic level becomes the strategy at the function level, and functional level
tactics become operational strategies
Development of the marketing plan enables business to set priorities regarding markets it
wants to compete in (market segment), customers it wants to serve (target customers),
and how it plans to serve those customer (marketing mix strategy)
Process is two way process, marketing and other function plans are adapted based on
the specific objectives and decisions reflect in operational plan and strategic plans are
adapted based on the specific objective and decision reflected in the functional plans
Strategic Planning: Guiding the Business
Five key stages in top level strategic planning
Step 1: Define the Mission
Mission statement a formal statement in an organizations strategic plan that
describes the overall purpose of the organization and what it intends to achieve in terms
of its customers, products and resources
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oIdeal mission statement is not too broad, too narrow, or too short-sighted
oNever have a mission statement that would make yourself obsolete
oMission statements should also inspire customers and other stakeholders to want
to do business with an organization
Step 2: Conduct an Environmental (Situational) Analysis
Second step is an assessment of an organizations environment, both external and
internal
oReferred to as a situation analysis, environmental analysis or sometimes a
business review
External environment consists of those uncontrollable elements outside of the
organization that may affect it either positively or negatively
o4 areas to look at: Political or legal, economic, social or cultural, technology or,
other (P.e.s.t.o.) trends of issues that might impact a particular industry and
business
External environment includes consumer, industry, and competitive analysis
Internal environment is all the controllable elements inside an organization that
influence how well the organization operates
Analysis to understand the decision context (opportunity)
oEnvironmental Analysis
External Environment
Macro
Consumer analysis
Industry analysis
Competitive analysis
Internal Environment
Current strategy & performance
Organization systems, structure, culture
Skills & resources
Preferences & values
oSWOT analysis
SWOT summary
Strategy mix
oOther Analysis
oMarketing Theory, Concepts, Principles
Step 3: Set Organizational or SBU objectives
Very large corporations are normally divided into self-contained divisions or strategic
business units (SBU)
Objectives needs to be specific, measurable, and attainable
Attainability is important because if it is too high up and cant be attained, then it can
create frustration for not only employees but also other stakeholders
To ensure measurability, objectives are often stated in numerical terms
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Step 4: Establish the Business Portfolio
Each SBU has its own focus within the firms overall strategic plan
Business portfolio the group of different products or brands owned by an
organization and characterized by different income-generating and growth capabilities
Step 5: Develop Growth Strategies
Marketers use the product market growth matrix to analyze different growth strategies
oVertical axis represents opportunities for growth, either in existing markets or in
new markets
oHorizontal axis considers whether the firm would be better off putting its
resources into existing products or of it should acquire new products
oProvides four fundamental marketing strategies
Market Penetration Strategies
oSeek to increase sales of existing products to existing markets such as current
users, nonusers, or users of competing brands within a market
oMight try to increase sales by cutting price, improving distribution, or conducting
promotions aimed at attracting users of competing soup brands
Market development strategies
oIntroduce existing products to new markets
oCan mean expanding into a new geographic area or it may mean reaching new
customer segments
Product development strategies
oCreate growth by selling new products in existing markets
oMay mean extending the firms product line by developing new variations of the
item
oMay also mean altering or improving the product to provide enhanced
performance
Diversification strategies
oEmphasize both new products and new markets to achieve growth
The Marketing Planning Process
Strategic planning process provides the context in which marketing planning is
conducted
Marketing planning culminates in the development of a formal document called the
marketing plan
Marketing plan a document that describes the marketing environment, outlines the
marketing objectives and strategy, and identifies who will be responsible for carrying out
each part of the marketing strategy
Understand the Opportunity
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