Chapter 2 - Strategic planning and the marketing environment

Functional planning

a decision process that concentrates on developing detailed plans for strategies and tactics for the short term that support an organizations long term strategic plan

Strategic planning

a managerial decision process that matches an organizations resources and capabilities to its market opportunities for long term growth and survival

BCG Growth-Market Share Matrix

a portfolio analysis model developed by the Boston Consulting Group that assesses the potential of successful products to generate cash that the company can then use to invest in new products

Mission statement

a statement in an organisation strategic plan that describes the overall purpose of the organization and what is intends to achieve.

Business planning

an ongoing process of making decisions that guide that company both in the short and long term/

Activities in the Evaluation of internal and external environments stage (strategic)

analysing environment using SWOT, PEST and PESTE analysis'

SWOT Analysis

analysis of an organisations strengths and weaknesses and opportunities and threats in its internal and external environment

PEST analysis

analysis of political...etc that can affect an organisation

Activities in the development of marketing strategies stage (functional)

develop actual marketing strategies by selecting a target market and developing marketing mix strategies including the 4 P's. - product, place, price, promotion

Strategic Business Units (SBU's)

individual units within the company that operates as a separate business having its own mission, objectives, competitors etc

factors of external environment

overall economy, competition, technology, laws and trends in society an pop culture, the business cycle, inflation, incomes, competitive environment and demographics.

factors of internal environment

the company's technologies, facilities, financial stability, reputation, quality of products and its employee's.

Business portfolio

the group of different products or brands owned by an organisation and characterised by different income generating and growth capabilities

External environment

the uncontrollable elements outside an organisation that may affect its performance either way.

Activities in the setting organisational objectives stage (strategic)

translating mission into objectives that are SMART

The Steps in the Strategic Planning Process

1. Define the mission 2. Evaluate the internal and external environments 3. Set organisational or SBU objectives 4. Establish the Business portfolio 5. Develop growth strategies

The Steps in the Functional Planning Process

1. Perform a situation analysis 2. Set marketing objectives 3. Develop marketing strategies 4. Implement marketing strategies 5. Monitor and control marketing strategies.

The 3 levels of business planning

1. Strategic Planning 2. Functional planning (marketing planning) 3. Operational Planning

Operational Planning

A decision process the focuses on developing detailed plans for day to day activities that carry out an organizations functional plans.

Portfolio Analysis

A tool for evaluating a company's business mix and assessing the potential of its SBU's

Product Development

Create growth by selling new products in existing markets

Activities in the development of growth strategies stage (strategic)

Decide how to create growth using the product-growth matrix. Then decide on a type of strategy from: 1. Market penetration 2. Market development 3. Product development 4. Diversification

Activities in the Establishing business portfolio stage (strategic)

Deciding how to best allocate resources using a portfolio analysis such as the BCG matrix and distinguishing markets as: stars, question marks, cash cows and dogs

Diversification

Emphasize both new products and new markets to achieve growth

Market development

Introduce existing products to new markets

Layout of the product-growth matrix

Market penetration [ product development Market development [ diversification

Activities in "define the mission" stage of the strategic planning process

Mission Statement

PESTE analysis

PEST + Environment

Market penetration

Seek to increase sales of existing products to existing markets

layout of BCG matrix

Stars [question marks Cash cows[ Dogs

Internal Environment

The controllable elements inside an organisation and how it does things that influence operations