Chapter 2

Downsizing

when a company must prune, harvest or divest businesses that are unprofitable or that no longer fit the strategy

Steps in Strategic planning

1. Defining the company's mission 2. Identified customer's objective and goals 3. Developing business portfolio 4. Planning marketing and other functional strategies

Problem with Matrix approaches

1. Difficulty in defining SBUs and measuring market share and growth 2. Time consuming 3. Expensive 4. Focus on current businesses and not future planning

Strategic business units

1. company division 2. product line within a division 3. single product or brand

Analyzing the current business portfolio

1. identify strategic business units. 2. Assess the attractiveness of its various SBUs 3. Decide how much support each SBU deserves

To find the best marketing stragety

Analysis, planning, implementation and control

Marketing/ Product strategy

Build ( Transform question mark to star) Hold (maintain- stars and strong cash cows) Harvest ( get short term profits- week cows, question markets and strong dogs) Divest (liquidate businesses that tie up resources- dog)

Business portfolio

Collection of businesses and products that make up the company

Community-oriented

Communities of customer who talk not just with the company about the brand but with each other as well

Market development

Identifying and developing new market for its current product, EX: new demographic markets, new group, new geographic area, Disney

Business unit strategy

Manage your portfolio

Mission Statement

Organization's purpose, what it wants to accomplish in the larger environment

Growth-share matrix

Portfolio- planning method that evaluates a company's SBUs in terms of market growth rate and relative market share

Marketing Mix

Price, product, promotion and place

Strategic planning

Process of developing and maintaining a strategic fit between the organization's goal and capabilities, and its changing marketing opportunities

Marketing analysis

SWOT analysis

Marketing strategy

Segmentation, targeting, differentiation, positioning

Diversification

Starting up or buying business beyond its current product and market EX: starbucks tea, toyota launch lexus

Product/ Market expansion grid

looks at new products, existing products, new markets, and existing markets for company growth opportunities

Portfolio analysis

major activity in strategic planning whereby management evaluates the products and businesses that make up the company`

Market penetration

making more sales to current customers without changing its original product. EX. adding new store, adding new food and beverage offering. adding services or redesigning menu

Product development

offering modified or new product to the current market EX: instant coffee, k-sup