Strategic planning is deciding today what to do in the future. It sets the stage for the rest of the planning in the firm and consists of analysis and strategy. Strategic planning can be defined as the process of developing and maintaining a strategic fit between the organization’s goals and capabilities and its changing marketing opportunities. It relies on developing a clear company mission, supporting objectives, a sound business portfolio, and coordinated functional strategies.
At the corporate level, the company first analyses its present position and defines its overall purpose and mission. This mission is then turned into detailed supporting objectives that guide the whole company. Next, headquarters decides what portfolio of businesses and products is the best for the company and how much support to give each one. Each business and product unit must in turn develop detailed marketing and other departmental plans that supports the company-wide plan. Thus, marketing planning occur at the business-unit, product, and market levels. It supports company strategic planning with more detailed planning for specific marketing opportunities. Read the rest of this entry »
What is our business? Who is the customer? What do consumers value? What will our business be? What should our business be? These simple-sounding questions are among the most difficult the company will ever have to answer. Successful companies continuously raise these questions and answer them carefully and completely.
Many organizations develop formal mission statements that answer these questions. A mission statements is a statement of the organization’s purpose – what it wants to accomplish in the larger environment. A clear mission statement acts as an “invisible hand” that guides people in the organization so that they can work independently and yet collectively toward overall organizational goals. Read the rest of this entry »
The company’s mission needs to be turned into detailed supporting objectives for each level of management. Each manager should have objectives and be responsible for reaching them.
Marketing strategies must be developed to support these marketing objectives. To increase its national market share, the company may increase its product’s availability and promotion. To enter new foreign markets, the company may cut prices and target large farms abroad. There are its broad marketing strategies.
Guided by the company’s mission statement and objectives, management must plan its business portfolio. A company’s business portfolio is the collection of businesses and products that make up the company. The best business portfolio is the one that best fits the company’s strengths and weaknesses to opportunities in the environment. The company must analyze its current business portfolio and decide which business should receive more, less, or no investment, and develop growth strategies for adding new products or businesses to the portfolio.
The major tool in strategic planning is business portfolio analysis, whereby management evaluates the business making up the company. The company will want to put strong resources into its more profitable businesses and phase down or drop its weaker businesses. It can keep its portfolio of businesses up-to-date by withdrawing from declining businesses and strengthening or adding growing businesses.
Management’s first step is to identify the key businesses making up the company. There can be called its strategic business units (SBU). SBU is a unit of the company that has a separate mission and objectives and can be planned independently from other company businesses. An SBU can be a company division, a product line within a division, or sometimes a single product or brand. Read the rest of this entry »