Corporate Strategic Planning

Outline Introduction Meaning & Role of Strategic Planning Corporate Mission Strategic Business Units (SBU) Marketing Audit

Strategic Planning

…is the managerial process of developing and maintaining a strategic fit between the organization's objectives and resources and its changing market opportunities.

Org Objectives Resources

Changing Environment

Strategic Fit

The Role of Strategy

CorporateMission &Objectives

Strategy:•Corporate•Business•Functional

Operating Plans

Sun Tze on Strategy “Know your enemy, know yourself, and

your victory will not be threatened. Know the terrain, know the weather, and your victory will be complete.”

Strategic Marketing

“Marketing Strategy is a series of integrated actions leading to a sustainable competitive advantage.”

John Scully

Corporate Mission Broad purposes of the organization General criteria for assessing the long-term

organizational effectiveness Driven by heritage & environment Mission statements are increasingly being

developed at the SBU level as well

Examples of Corporate Mission

SINGAPORE AIRLINES is engaged in air transportation and related businesses. It operates world-wide as the flag carrier of the Republic of Singapore, aiming to provide services of the highest quality at reasonable prices for customers and a profit for the company

Examples of Corporate Mission (cont’d)

MARRIOTT’S Mission Statement:

We are committed to being the best lodging and food service company in the world, by treating employees in ways that create extraordinary customer service and shareholder value

Corporate Culture The most abstract level of managerial thinking How do you define culture? What is the significance of culture to an

organization? How does marketing affect culture in the

organization?

Corporate Objectives & Goals An objective is a long-range purpose

Not quantified and not limited to a time period E.g. increasing the return on shareholders’ equity

A goal is a measurable objective of the business Attainable at some specific future date through planned actions E.g. 10% growth in the next two years

What is a Strategic Business Unit? (SBU)

A set of products or product lines With clear independence from other products or

product lines for which a business or marketing strategy should be

designed

Characteristics of a viable SBU Unique business mission Definable set of competitors Integrative planning done independently Responsible for resource management in all areas Large enough but not so large as to become

bureaucratic

Organizational Marketing Levels

Hofer and Schendel suggested that organizations develop strategies at three structural levels:

Corporate level—(corporate marketing) SBU level—(Strategic Marketing) Product/Market level—(Functional Marketing)

Marketing at the SBU Level—Strategic Marketing

Strategic Marketing requires Detailed understanding of market needs, and Proactive use of competitive intelligence at the

corporate as well as SBU’s levels

Strategic Marketing Focuses on what the firm do best at the SBU level To secure and maintain a sustainable competitive

advantage

What is Competitive Advantage? “Competitive advantage is a company’s ability to

perform in one or more ways that competitors cannot or will not match.” Philip Kotler

“If you don’t have a competitive advantage, don’t compete.” Jack Welch, GE

Other Characteristics of Competitive Advantage

Substantiality Is it substantial enough to make a difference?

Sustainability Can it be neutralized by competitors quickly?

Ability to be leveraged into visible business attributes that will influence customers

(Source: Strategic Marketing Management, Aakers)

Seeking Competitive Advantages Positions of advantage

Superior customer value Lower relative total cost

Performance advantages Customer satisfaction, Loyalty, Market Share, Profit

Sources of advantages Superior skills & knowledge, Superior resources,

Superior business process

Key Elements of Marketing Strategy Formulation

The strategic 3 Cs Customers, Competitors & the Corporation

Environment analysis -- PEST  Strategic Marketing Decisions

Where to compete How to compete When to compete

Must have a clearly defined market Must have a good match between corporate

strengths and market needs Must have significant positive differentiation in

the key success factors of the business

A Viable Marketing Strategy

Situation Analysis Internal Analysis—company; capability etc.

External Analysis—customers, market definition, industry structure

SWOT Analysis Strengths, Weaknesses, Opportunities & Threats Identify & prioritize major problems and opportunities:

selection of key issues Based on the firm’s core competencies, decide on

future options

Marketing Audit“Marketing audit is a comprehensive, systematic,

independent, and periodic examination of a company’s—or business unit’s—marketing environment, objectives, strategies, and activities with a view to determining problem areas and opportunities and recommending a plan of action to improve the company’s marketing performance” Philip Kotler

Characteristics of Marketing Audit Comprehensive

Must cover all marketing areas Systematic

Sequential diagnostic steps

Independent Internal & external auditors

Periodic Performed at regular intervals

Marketing Audit Procedure Marketing environment audit Marketing strategy audit Marketing organization audit Marketing system audit Marketing productivity audit Marketing function audit Marketing excellence review Ethical and social responsibility review