Winning Markets Through
Market-Oriented Strategic Planning
by
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Kotler on
Marketing
It is more important
to do what is
strategically right
than what is
immediately
profitable.
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The Value Chain
• Micheal Porter of Harvard has proposed the value
chain as the tool for identifying ways to create more
customer value.
• The value chain identifies nine strategically relevant
activities that create value and cost in a specific
business.
Support
Activities
The Generic Value Chain
Firm infrastructure
Human resource management
Technology Development
Procurement
MarketOutServing
Inbound Operabound
ice
Logistics tions
and
Logistics
sales
Primary Activities
The Value Chain
• BENEFITS
– Helps in examining costs and performance in each
value creating activity.
– Helps in benchmarking those activities
– Helps in coordinating the activities
Strategic Planning
• Successful marketing requires companies to
have capabilities such as understanding
,creating, delivering, capturing and sustaining
customer value.
• But still only a handful of companies stand out
as master marketers.
• These successful companies focus on the
customer and are organized to respond
effectively to changing customer needs.
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Strategic Planning
• Strategic Planning calls for action in three
areas
– Managing business as an investment portfolio
– Assessing each business’s strength by considering
the market growth rate and the company’s
position and fit in that market.
– Establishing a strategy (a game plan)
Strategic Planning
• Strategic Planning is carried out at four
organizational levels.
– Corporate and Division Strategic Planning
– Business Unit Strategic Planning
– Product Level Strategic Planning
Organization Chart
Unilever
HPC
Home Care
FOODS
Personal Care
UPL
U Foods Ltd
U Foods Solutions
Surf Excel
Clear
Blue Band
Energile
Comfort
Close Up
Flora
Rafan
Fair and Lovely
Supreme
Knorr
Life Buoy
Lipton
Lux
Walls
Corporate and Division Strategic Planning
• All corporate headquarters undertake four
planning activities
– Defining the Corporate Mission
– Establishing Strategic Business Units (SBUs)
– Assigning resources to each SBU
– Assessing Growth Opportunities
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Corporate and Division Strategic Planning
• Defining the Corporate Mission
– Mission statements define which competitive
scopes the company will operate in
•
•
•
•
•
•
Industry scope
Products and applications scope
Competence scope
Market-segment scope
Vertical scope
Geographical scope
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Can you name a company that has
recently changed its product scope or
market segment scope in a very public
way? Was this an expansion or
contraction of scope?
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Corporate and Division Strategic Planning
• Establishing Strategic Business Units (SBUs)
– Three characteristics of SBUs
• Single business or collection of related businesses
that can be planned for separately
• Has its own set of competitors
• Has a manager who is responsible for strategic
planning and profit
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Corporate and Division Strategic Planning
• Assigning Resources to each SBU
– The purpose of identifying the company’s strategic
business units is to develop separate strategies and
assign appropriate funding.
– Senior management knows that its portfolio of
businesses usually includes a number of
“yesterday’s has-beens” as well as “tomorrow’s
breadwinners”.
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Corporate and Division Strategic Planning
• Assessing Growth Opportunities
– Intensive Growth
– Integrative Growth
– Diversification Growth (concentric, horizontal,
conglomerate)
– Downsizing Older Businesses (prune, harvest,
divest)
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Give an example of a market segment
where integrative growth would be
preferable to growth through
diversification. Explain
why one approach is better
than the other.
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Business Unit Strategic Planning
• Business Mission
• SWOT Analysis
– External Environment Analysis
(Opportunity and Threat Analysis)
– Internal Environmental Analysis
(Strength/Weakness Analysis)
• Goal Formation (SMART)
– Specific, Measurable, Actionable,
Realistic, Time Bound
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Give some examples of companies
that have grown to dominate their
market segment by using technology
to make buying opportunities more
convenient and efficient.
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Business Unit Strategic Planning
• Porter’s Generic Strategies
– Overall cost leadership
– Differentiation
– Focus
• Strategic Group
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Business Unit Strategic Planning
• Strategic Alliances / Marketing Alliances
– Product or service alliances
– Promotional alliances
– Logistical alliances
– Pricing collaborations
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Business Unit Strategic Planning
• Program Formulation and Implementation
– A great marketing strategy can be sabotaged by
poor implementation.
– Must take care of all the stake holders.
• Feedback and Control
– The marketplace will change, and when it does,
the company will need to review and revise its
implementation programs, strategies, or even
objectives.
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Product Level Strategic Planning
• A market plan is a written document that
summarizes what the marketer has learned
about the market place and indicates how the
firm plans to reach its marketing objectives.
Product Level Strategic Planning
• Contents of the Marketing Plan
– Executive Summary
– Current Marketing Situation
– Opportunity and issue analysis
– Objectives
– Marketing strategy
– Action programs
– Financial projections
– Implementation controls
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