B U S IN ESS U N IT
S TR ATEG IC P LA N N IN G
Business M ission
Each business unit needs to define
its specific mission within the
broader company mission.
SW O T Analysis
SWOT analysis: The overall evaluation of a
company’s strengths, weakness, opportunities, and
threats.
EXTERNAL ENVIRONMENT ANALYSIS ( Opportunity and
Threats)
A marketing opportunity is an area of buyer need or
potential interest in which a company can perform profitably.
Opportunities can take many forms :
A company may make a buying process more convenient or efficient.
A company can meet the need for more information and advice. A company can introduce a new capability
A company may be able to deliver product or service faster
Market Opportunity Analysis: a matrix used to
determine the attractiveness and success
probability of any opportunity.
Five questions are asked:
1. Can the benefits involved in the opportunity be
articulated to a defined target?
2. Can the target market be located and reached
with cost-effective media and trade channels?
3. Does the company posses access to the critical
capabilities and resources needed to deliver the customer benefits?
4. Can the company deliver the benefits better than
any actual or potential competitors?
5. Will the financial rate of return meet or exceed
Market Opportunity Matrix:
1
2
3
4
Success probability
High Low
-EXTERNAL ENVIRONMENT ANALYSIS
( Opportunity and Threats)
Threat: a challenge posed by an unfavorable
trend or development that would lead, in
the absence of defensive marketing action,
to deterioration in sales or profit.
Four outcomes that characterize
business’s overall attractiveness based
on the major threats and opportunities
1.
Ideal business
: high in major
opportunities, low in major threats
2.
Speculative business
: high in both
major opportunities and threats.
3.
Mature business
: low in major
opportunities and threats
4.
Troubled business
: low in opprotunities
Internal Environment Analysis
(Strengths/Weaknesses Analysis)
Each business needs to evaluate its internal strengths
and weaknesses.
The business does not have to correct all its
weakness, nor should it gloat about all its strengths.
The big question is whether the business should limit
it self to those opportunities where it possesses the required strengths or whether it should consider
better opportunities where it might have to acquire or develop certain strengths.
Some times, business does poorly not because its
departments lack the required strengths, but because they do not work together as a team.
It is therefore critical to assess interdepartmental
Check list for performing strengths and weakness
analysis
PERFORMANCE IMPORTANCEMAJOR STRENGT H MINOR STRENGT H NEUTR
AL MINOR WEAKNE SS
MAJOR WEAKNE SS
HI LOW MED
MARKETIN G 1.Company reputation 2.Market Share 3.Customer satisfaction 4. Customer retention 5. Product quality 6. ……… FINANCE 1. Cost of capital
G oal form ulation
Goal formulation : the formulation of the specific
goals for the planning period.
Managers use the goals to describe objectives
that are specific with respect to magnitude and time.
The objective including:
Profitability Sales growth
Market share improvement Risk containment
Goals criteria:
1.
Hierarchically, from the most to the least
important
2.
Quantitatively
3.
Realistic
Strategic Form ulation
Goals indicate what business wants
to achieve
Strategy indicate a game plan for
getting the goals.
Business strategy consists of
Porter’s Generic Strategies:
1.
Overall cost leadership; lowest production and
distribution cost in order to get lower price than
its competitor and winning the market.
2.
Differentiation; concentrates on achieving
superior performance in an important customer
benefit area. Example, the firm seeking quality
leadership.
3.
Focus; business focuses on one or more narrow
Operational effectiveness and strategy
According to Porter, firms pursuing the same strategy
directed to the same target market constitute a strategic group
The firm that carries out that strategy best will make
the most profits.
Porter drew a distinction between operational
effectiveness and strategy.
The companies believe they can win by performing the
same activities more effectively than competitor, but competitor can quickly copy the operationally effective company using benchmarking and other tools, thus
diminishing the advantage of operational activities.
Porters define strategy as “the creation of a unique and
valuable position involving a different set of activities”. In this context, a company can claim that it has a
Program form ulation and Im plem entation
A great marketing strategy can be sabotaged
by poor implementation.
According to Mc kinsey and Company, strategy
is only one of seven elements In successful
business practice. The frame work of the
elements is called Mc Kinsey’s 7-s framework
for business success.
The elements are:
Hard ware elements: strategy, structure and
systems
Soft ware elements: Style, skills, staff, shared values
According to this framework, when these
Feedback and Control
As it implements its strategy, the firm needs to track
the results and monitor new developments on the marketing environment.
If the environments change, the company can count it,
so the company need to review and revise its implementation, programs, strategies, or even objective.
The key to organizational health is willingness to
examine the changing environment and to adopt new goals and behaviors.
High performance organizations continously monitor
