Strategic Management

Company Vision & Mission

Define Business
Self & Environment Analysis (SWOT)
Set Corporate Objectives
Set Individual Business Plans for SBUs
Strategy Formulation
Strategy Implementation
Strategy Control
 Mission Statements
Mission is the expression of corporate intent,
purpose, what it stands for.
Reliance:
To become a major player in the global
chemicals business & simultaneously grow in
other growth industries like infrastructure
TCS
To be India’s most successful & most respected
IT Company
Merck: To preserve & improve human life.
 Defining the Business
Defining the business is the prerequisite for selecting
the right opportunities and steering the firm on correct
path.
What business we are in?
Who do we intend to serve?
Can we accurately define our business
Do we know what brought us to this business?
What is the future of this business?
Do we want to be in it in future? What are our core
competence?
 Defining Business
Business definition should related to the functions of products,
encompass related areas, include new opportunities
Ford – “We are in the business of automotive & auto-related
products and services”

Xerox – “We are a document processing Company”

Unilever – “Our Company is to make cleanliness

commonplace, to lessen work for women, to foster health, and
to contribute to personal attractiveness so that life may be
more enjoyable for the people who use our products”
 Strategic Planning

Strategic Planning is the management task concerned

with the growth and future of a business enterprise.
It can be view as a stream of decisions and actions that
lead to effective strategies and which, in turn, help the
firm achieve its growth objectives.
The process involves thorough self appraisal of self &
environment
 Major concerns of Strategic Planning

Strategic Planning is concerned with:

•Future – long term dynamics
•Growth – direction, extent, speed, timing of growth
•Environment – Fit between the business & its
environment
•Business Portfolio – product-market scope & positions
•Strategy
•Integration – integration of all management functions
•Crating core competence / competitive advantage
•Corporate Strategy
 Component Tasks in Strategic Planning

Clarifying the mission of the Organization

Defining the Business
Surveying the Environment
Internal Appraisal of the firm
Setting Corporate Objectives
Formulating Corporate Strategy
 Strategic Marketing/Planning
5 Business Orientations:
Product – Technology Push
Production – Mass Production
Sales – Sales Push
Marketing – Market Pull
Competition – Compete in the Market (Strategy)
Strategy : out thinking, out planning, out playing
competition
Strategic Marketing : combination of Marketing &
Competitive Strategy concept
 Strategic Marketing/Planning
Marketing Strategy is to locate, attract & retain customers &
also to block competitors & new entrants

M.S: is concerned with finding “sustainable competitive

advantage” (SCA) in a continuously changing world to have
long term association with customers.
M.S: is a consistent, appropriate feasible set of principles
through which a particular Company hopes to achieve its long
term customer satisfaction & Company’s profit objectives in a
particular competitive environment.
 Strategic Marketing/Planning
Philip Kotler
Marketing Strategy is the managerial process of analysing
market opportunities & choosing marketing positions,
programs & controls that create & support viable business that
serve the Company’s purposes & objectives.
M.S takes into account, concepts/tolls like, SWOT, PLC,
Marketing Mix, Consumer Behaviour etc.

Abel & Hammod: M.S is akin to Business Strategy- define

business, set a mission, select feasible plan, budget &
implement.
 Strategic Marketing/Planning
Factors:
Co’s position in the market
Co’s mission, policies, objectives & resources
Competitors market share & strategy
Consumer behaviour in target market
Products current & projected LC stage
General environment conditions
 Strategic Marketing/Planning
Dimensions:
Level of investment
Product line, positioning, pricing, distribution
Strategies needed to compete in the market
Assets, skills & synergies to provide SCA
 Strategic Marketing/Planning
Requirements:
•Specific deadline
•Control performance
•Resource allocation
•Careful timing
Advantages:
•Helps organizations to orient to key external factors
(consumer & competitor)
•To have long term view – emerging trends, gear with
resources to take advantage of opportunities
•Str. Mktg is to gain SCA to get LT customer satisfaction
 Strategic Marketing/Planning
External Analysis - Opportunities & Threats
Customer, Competitors, Market, Environment

Self Analysis – Strengths & Weakness

Str. Mktg helps you to
Exploit Own strength & neutralise comp. strength
Exploit Comp. weakness & nuetralise our weakness
Exploit Market opportunities & neutralise market Threats
 Why is marketing planning
necessary?
• Systematic futuristic thinking by management
• better co-ordination of company efforts
• development of better performance standards for
control
• sharpening of objectives and policies
• better prepare for sudden new developments
• managers have a vivid sense of participation
Criticisms of marketing planning
• Formal plans can be quickly overtaken by
events
• Elements of the plan my be kept secret for
no reason
• gulf between senior managers and
implementing managers
• the plan needs a sub-scheme of actions
 Cautionary notes for effective
planning
• Don’t blindly rely on mathematical and
statistical calculations. Use your judgement
as well
• Don’t ever assume that past trends can be
exploited into the future forever
• if drawing conclusions from statistical data,
make sure the sample size is sufficiently
large
 Behavioural planning problems
• Planning recalcitrance: resistance and non-co-
operation by managers in planning
• fear of uncertainty in planning: a lack of comfort in
planning activities
• political interests in planning activities:resource
bargaining, padding of requirements, and avoidance
of consensus
• planning avoidance: compliance rather than
commitment to planning
 Standard Planning Framework
• Analysis - where are we now?
• Objectives - where do we want to be?
• Strategies - which way is best?
• Tactics - how do we ensure arrival?
• Control - are we on the right track?
 Tasks involved in Marketing Planning

•Analysing the marketing environment & spotting the

opportunities & threats
•Internal Appraisal (Company’s Strengths &
Weaknesses)
•Setting the marketing objectives
•Formulating the marketing strategy
•Developing detailed marketing plans & programs
•Formulating the marketing budget
 Analysing the marketing environment &
spotting the opportunities & threats
Purpose:
a. Find out favourable & Unfavourable factors
prevailing / emerging in the environment
b. Find out specific business opportunities available to
the business unit and their relative attractiveness
•Macro environmental factors, Customer & competitor
analysis should be considered for O & T
•Develop an Opportunity-Threat Profile (O-T Profile)
 O-T profile
Opportunity – Threat Profile
OPPORTUNITIES

HIGH LOW
T
H
HIGH SPECULATIVE TROUBLED
R MARKET MARKET

E LOW IDEAL MATURE

A MARKET MARKET

T
 Internal Appraisal (Assessing Company’s
Strengths & Weaknesses)

Main Tasks:
1.Assessing the strengths & Weakness of the business unit
2.Assessing the health & status of different product lines,
products, brands
3.Assessing the competitive advantage available to the unit
 Assessing the strengths &
Weakness of the business unit
The S & W of the unit have to be assessed in each of the
functions/areas like marketing, finance, manufacturing
operations, R&D, HR, image of the unit, its status etc
Evaluate the capabilities of the SBU
S-W in Marketing:
Overall market growth, firm’s market share, competitor’s
share, firm’s production capacity in relation to market
potential, PLC of various products, brand equity, product
quality, technology, synergy in product mix, prices, margins,
marketing spends, overall capability in marketing
 Techniques for analysing S-W in Marketing
Marketing Audit
Market share analysis
Cost-Volume-Profit analysis
Marketing cost analysis
Sales force productivity analysis
Consumer satisfaction index
Brand monitoring surveys
Perception mapping & Multi-dimensional scaling
 Assessing the health & status of different
product lines, products, brands
The SBU has to analyse and find out the present status &
future potential of each of its product lie/products/brands.
Based on this evaluation only, we can formulate its marketing
objectives and fix the income and profit targets for each
product line & each brand.
The idea is to find out to what extent the SBU can depend on
each product line, for sales & profit.
Using various techniques, figure out current health & future
potential of products.
 Assessing the competitive
advantage available to the unit
Routes to attain competitive advantage:
Benchmarking
Valu Chanin analysis
Innovation
Integration
Outsourcing
R&D
Supply chain expertise
Strength in Marketing channels
Merger & Acquistion
Strateegic Alliance
Product differentiation
Brand dominance
Service Disfferentiation
 Competitive Advantage vs Core Competence

• Competitive • Core Competence

Advantage - Can be competitive advantage
- cannot be core competence - Can sustain for long
- cannot sustain for long - Lasting superiority
- Not lasting superiority - Result from Company’s
- Result from functional strength strength
- - Helps in all areas
Helps in specific limited way
- - Gives strength to entire orgn
Gives strength to the
product/SBU only - Cannot be copied
- Easily can be copied - unique`
- Not unique
 Setting Marketing Objectives
Characteristics of Marketing Objectives:
•Marketing objective take the cue from Corporate Decisions
on SBUs
•Marketing Objectives must be specific (sales volume, market
share, productivity, profits)
•Marketing Objectives will specify the Growth to be achieved
( Quantum of growth, growth rate, timing of growth)
•Marketing Objective are set at three levels (Product line level,
product level, brand level)
 Formulating Marketing Strategy
Marketing Strategy is used to achieve Marketing
Objectives.
Formulating Marketing Strategy is the core of
Marketing Planning.
Select the Target Market:
•Study the customer profile, buying behaviour & motives.
•Segment the market using relevant bases.
•Evaluate each segment
•Select appropriate segment as the target market.
 Formulating Marketing Strategy

Select the Target Market

Decide Positioning Strategy
Develop Marketing Mix:
•Decide the approach in respect of each of the 4 Ps.
•Decide the relative weightage to be assigned to each
of them
•Provide for the impact of the uncontrollable,
environmental variables
 Develop Detailed Marketing Plans & Programs

Strategy to be split into Tactical (operational Plans)

Comprehensive functional plans are necessary
Functional Plans: (integrate all activities)
Product plan/Production plan
Sales forecast / sales plan
Channel plan / logistics plan
Advertising / sales promotion plan
Sales force plan
 Formulating Marketing Budget
Budget has to emerge from detailed functional
plans
Budgets are the financial version of physical
plans
Marketing planning will not be complete until
various marketing activities that are planned are
accounted for in financial terms.
Advertising budget, sales promotion budget,
product inventory budget, sales force budget,
etc.
The contents and structure of the
marketing plan
• The executive summary
• table of contents
• situational analysis and target market
• marketing objectives
• marketing strategies
• marketing tactics
• schedules and budgets
• financial data and control
Objectives of the marketing plan
• Acts as a roadmap
• assist in management control and monitoring the
implementation of strategy
• informs new participants in the plan of their role
and function
• to obtain resources for implementation
• to stimulate thinking and make better use of
resources
• Assignment of responsibilities, tasks and timing
• Awareness of problems, opportunities and threats
• Essential marketing information may have been
missing
• if implementation is not carefully controlled by
managers, the plan is worthless!