BUS 343 Chapter Notes - Chapter 2: Boston Consulting Group, Cash Flow, Bt Consumer

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Ch. 2 – Company and Marketing Strategy: Partnering to Build Customer
Relationships
- strategic planning = process of dvlping & maintaining strategic fit b/t org’s goals & capabilities & its
changing marketing opps
 corporate level: define overall purpose & mission, then objectives
 steps:
- mission statement = statement of org’s purpose, what is wants to accomplish in larger enviro
 clear mission statement guides ppl in org
 should be market oriented, defined in terms of satisfying basic customers
 not “we make and sell furniture” (defined myopically)
 should focus on customers & customer experience the company seeks to create
- business portfolio = collection of businesses & prods that make up company
 first: company must analyze current business portfolio & determine which businesses should
receive more/less/no investment
 second: must shape future portfolio by dvlping strategies for growth & downsizing
- portfolio analysis = process where management evaluates prods & businesses that make up company
 identify strategic business units (SBUs), key business that make up company
- Boston Consulting Group (BCG) growth-share matrix = portfolio-planning method that evaluates
company’s SBUs in terms of tis market growth rate & relative market share
 stars = high-growth, high-share businesses/prods
 often need heavy investments to finance rapid growth
 eventually, their growth will slow down & will turn into cash cows
 cash cows = low-growth, high-share business/prods
 established & successful SBUs need less investment to hold their market share
 produce a lot of cash that company uses to pay bills & support other SBUs that need
investment
 question marks = low-share business units in high-growth markets
 require a lot of cash to hold their share, let alone increase it
 management needs to think hard about which ? it should try to build into stars & which
should be phased out
 dogs = low-growth, low-share businesses/prods
 may generate enough cash to maintain themselves but do not promise to be large sources
of cash
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