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Strategic planning: the process of developing and maintaining a strategic fit
between the organization’s goals and capabilities and its changing marketing
Steps in strategic planning:
o Defining the company mission
o Setting company objectives and goals
o Designing the business portfolio
What businesses and products is right and how much support
to be given to each.
o Planning marketing and other functional strategies
Within each department (i.e. each business/product).
Mission statement: a statement of the organization’s purpose – what it wants
to accomplish in the larger environment.
o Guides people within an organization.
o Should be market-oriented not myopically (product-) oriented.
I.e. not “We sell tools and home improvement items” but “We
offer products and services to meet the everyday needs of
o Should focus on customers and the customer experience the company
seeks to create.
Each manager should have objectives, relating to fulfilling the company’s
mission statement, and be responsible for reaching them.
McDonald’s lost touch with it’s customer focused goal with it’s initial mission
of “being the world’s best quick-service restaurant” so it created the Plan to
Win which refocused the company on customers and detailed how it planned
to be successful once again.
Business portfolio: the collection of businesses and products that make up
o The best one is one that best fits the company’s strengths and
weaknesses to opportunities in the environment.
Two steps in business portfolio planning:
o Analyze current business portfolio
Determine which businesses should receive more, less, or no
Portfolio analysis: the process by which management evaluates
the products and businesses that make up the company.
Strategic business units (SBU’s): key businesses that make up
Can be an entire division, product line, or simply a
product. SBU’s are evaluated on two important dimensions:
Attractiveness of the SBU’s market or industry
Strength of the SBU’s position in that market or industry
o Develop strategies for growth and downsizing
Growth allows a company to compete more effectively, satisfy
their stakeholders, and attract top talent.
Objective must be “profitable growth” not growth itself.
Marketing needs to identify, evaluate, and select market
opportunities and establish strategies for capturing them.
Product/market expansion grid: a portfolio-planning tool for
identifying company growth opportunities through market
penetration, market development, product development, or
Growth-share matrix: a portfolio planning method that evaluates a
company’s SBUs in terms of its market growth rate (attractiveness of
market) and relative market share (strength in the market).
o Four types of SBUs:
High-growth, high-share businesses or products.
Heavy investments needed to finance their rapid
Growth will slow and it will become a cash cow.
Low-growth, high-share businesses or products.
Less investment needed thus producing a lot of cash for
the company to invest in other SBUs.
High-growth, low share businesses or products.
A lot of investment needed to hold market share.
Management need to carefully decide which ones to
turn into stars and which to phase out.
Low-growth, low-share businesses or products.
May produce enough cash to maintain themselves but
are not large sources of cash.
Four different strategies a company may employ with an SBU:
o Invest more in the business unit to build its share.
o Invest just enough to hold the SBU’s share at the current level.
o Harvest the SBU to milk its short-term cash flow regardless of the
o Divest the