RAHUL JAIN
(Striving for excellence)
BCOM (H), PGPM, FCS
Strategy formulation ...
 An organization must select any of innumerable
ways of seeking to attain its objectives.
 Strategies define how organizations should
use their resources to meet their objectives.
 Hence,
… strategies put constraints on employees to
focus activities on what the organization does
best or areas where it has an advantage over
competitors.
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Mission – Basic reason for
existence
Mission: How do we intend to win in this business?
Factors influencing Mission
 Stakeholders
 Internal resources and Power
 Values of top management
 Past development of firm
Business definition
 Products
 Markets
 Function (Technology and Processes)
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Vision- Yin Yang
 Core Ideology (Core values and Purposes)
 Envisioned Future (BHAG and vivid description)
A vision, is more encompassing. It answers the question, "What will success
look like?" It is the pursuit of this image of success that really motivates
people to work together.
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Starbucks’ Mission and Vision
Starbucks’ Mission
Starbucks’ mission is to “establish Starbucks as the premier purveyor of the finest coffee in
the world while maintaining our uncompromising principles as we grow” (Starbucks
Website, 2006, p.1).
Starbucks strategic plan to make its mission a reality is evidence by the company’s rapid
expansion worldwide. Starbucks has locations in all 50 States in the US, plus the District
of Columbia and Puerto Rico (Starbucks Company Fact Sheet, 2006). Starbucks can also
be found in 36 countries outside the US (Starbucks Company fact Sheet, 2006).
Starbucks is committed to buying only certified coffee in pursuit of selling the finest
coffee.
Starbucks’ Vision
According to the company’s profile, (2006) its vision is to make Starbucks coffee the most
recognized and respected brand in the world by using high quality roast beans to make
coffee beverages along with other products. The company wants to develop
enthusiastically satisfied customers at all times. They want to make positive
contributions to their communities and their environment.
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Need for Solid Market Research
 Size of market
 Competitor Analysis
 Market Conditions and trends
 Profit Margins
 Revenue Opportunities
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Economic Analysis
 National Income Data
 Industry Growth
 Impact of changes in Interest rate, inflation, taxes on
Growth
 Other Key economic data
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Market demand
 Market demand for a product is the total volume that
would be bought by a defined consumer group in a
defined geographical area in a defined time period in a
defined marketing environment under a defined
marketing program.
 It is not a fixed number but rather a function of stated
conditions. Therefore it is called market demand
function.
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Customer Analysis
 What type of customer will buy the product or
service?
 Where are these customers located?
 How many potential customers (N) are there?
 How often do they consume or use it?
 What is the Competition?
 What are people paying?
 What is the Potential for the Market to Develop?
 What is my share of the Market?
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Market Potential
 Total Market Potential = Number of buyers in the
specific market under the given assumptions *
quantity purchased by an average buyer * price of an
average unit.
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Key Steps in Estimating Market Potential:
 1. Define your target market and market segments.
 2. Define the geographic boundaries of your market.
 3. Derive an average selling price.
 4. Determine the average annual consumption.
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Company Sales Forecast:
The various ways of estimating demand are:
1. Historical Sales figures
2. Forecasting current Demand by regression analysis,
trend analysis
3. Estimating Industry growth
4. Estimating Economy's growth
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Target Market
 A target market can be thought of as the customers who are
most likely to buy from you and generally are described
using demographic variables (gender, age, education) as
well as psychographic variables (lifestyle and belief system
variables).
 In many cases, a business may have more than one target
market. Think about the automobile industry,
Automobile manufactures have a number of target markets,
i.e., truck buyers, luxury car buyers, economy buyers. Your
business should be able to develop specific profiles for each
of your target markets using demographic and
psychographic variables.
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Revenue Analysis
 Revenues= No. of expected buyer*quantity purchased by an
average buyer*price of an average unit
 Sales Budget
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