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Chapter 2

A+ Notes: Ch. 2


Department
Management (MGM)
Course Code
MGMA01H3
Professor
Aggrawal
Chapter
2

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Ch 2: Company and Marketing Strategy
Companywide Strategic Planning: Defining Marketing’s Role
NASCAR: customer driven strategy create long lasting relationships
strategic planning – developing & maintaining strategic fit b/w org’n’s goals/capabilities &
changing market opportunities
focus on L-T survival and growth sets stage for rest of planning
mission statement – org’n’s purpose – what it wants to accomplish in larger enviro.
market-oriented & defined in terms of basic customer need
not just “We sell _______”, “be the best in _______ industry”
not to make more sales/profit how can co. make contribution to world?
ex. Google: organize world’s info and make it universally accessible”
mission needs to be translated to objectives for current period
Designing the Business Portfolio
business portfolio – collection of business and products that make up company
guided by mission statement & obj, fit co’s strengths/weaknesses to opportunities
portfolio analysis – mgmt evaluates strategic business units (SBUs)
SBUs can be division, product line, indiv. product
growth-share matrix (BCG) – evaluate in terms of market growth & market share
Star
Need heavy investment to
finance rapid growth
eventually cools down
to be cash cow
Question mark
Require lots of $ just to
hold market share
build into star or phase
out?
Cash Cow
Established & successful
Low investment needed
Produce $ to support other
units
Dog
May generate enough $ to
support self
4 strategies: build (more $), hold (just enough), harvest (milking S-T cash flow), divest (sell or
phase out)
limitations of BCG: difficult to define SBUs & measure growth/share, time-consuming, costly,
focus on current instead of future planning, may be hard to manage all SBUs centrally
co. must also identify new business/products for future marketing helps identify, evaluate,
select opportunities & set strategy to obtain market
product/market expansion grid – identifies strategies for growth
Existing Products New products
Existing
Markets Market
penetration
sales of current product
to current market
Product
development
New or modified product to
current market
New
Markets Market
development
Identify new markets for
current product
(demographic or
geographic)
Diversification
Start up or buy business
outside of current market
and product
Relative market share
Growth rate
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