The strategic plan contains several components: the mission, the strategic objectives, the strategic audit, SWOT analysis, portfolio analysis, objectives and strategies. All of these feed from and feed into marketing plans.
The Mission
A mission states the purpose of a company. Firms often start with a clear mission held within the mind of their founder. A mission statement is a statement of the organization’s purpose what it wants to accomplish in the larger environment, A clear mission statement acts as an ‘invisible hand’ that guides people in the organization, so that they can work independently and yet collectively towards overall organizational goals.
mission statements should be market-oriented
- WHAT BUSINESS ARE WE IN?
- WHO ARE OUR CUSTOMERS?
- WHAT ARE WE IN BUSINESS FOR?
- WHAT SORT OF BUSINESS ARE WE?
A mission should be
- Realistic
- Specific
- Based on distinctive competences
- Motivating
Strategic Audit
The strategic audit covers the gathering of the vital information. It is the intelligence used to build the detailed objectives and strategy of a business. It has two parts: the external and internal audit.
External audit
Detailed examination of the markets, competition, business and economic environment in which the organization operates.
internal audit
An evaluation of the firm’s entire value chain. It includes the primary activities that follow the flow of goods or services through the organization: inbound logistics, operations, outbound logistics, sales and marketing, and after sales services.
SWOT Analysis
SWOT analysis is distillation of the findings of the internal and external audit which draws attention to the critical organizational strengths and weaknesses and the opportunities and threats facing the company.
Opportunities
- Economic climate
- Demographic climate
- Market
- Technology
Threats
- Competitive Activity
- Channel Pressure
- Demographic changes
- Politics
Strengths and Weaknesses
The strengths and weaknesses in the SWOT analysis do not list all features of a company, but only those relating to critical success factors. A list that is too long betrays a lack of focus and an inability to discriminate what is important. The strengths or weaknesses are relative, not absolute. The strengths and weaknesses that most Critically affect an organization’s success. These are measured relative to competition.
Portfolio Analysis
A tool by which management identifies and evaluates the various businesses that make up the company. The collection of businesses and products that make up the company is called business portfolio.
Strategic business unit
A unit of the company that has a, separate miss ton and objectives and than can be planned independently from other company businesses. An SBU can be a company division, a product line within a division, or sometimes a single product or brand.
THE BOSTON CONSULTING GROUP BOX
Stars
Stars are high growth, high share businesses or products. They often need heavy investment to finance their rapid growth. Eventually their growth will slow down, and they will turn into cash cows.
Cash Cows
Cash cows are low growth, high share businesses or products. These established and successful SBUs need less investment to hold their market share. Thus they produce cash that the company uses to pay its bills and to support other SBUs that need investment.
Question Marks
Question marks are low share business unite in high growth markets. They require cash to hold their share, let alone increase it. Management has to think hard about question marks – which ones they should build into stars and which ones they should phase out.
Dogs
Dogs are low growth, low share businesses and products. They may generate enough cash to maintain themselves, but do not promise to be large sources of cash.
Strategy
Ansoff Matrix
Market Penetration
Because of  known nature of clients and has established networks, and so on, selling current items into existing markets is the least risky method. Ansoff coined the phrase “Market Penetration” to describe this method. This is only achievable in markets that are still growing, or in markets where companies are willing to employ other aspects of the marketing mix (such as price discounting and additional promotional activities) to gain market share at the expense of competitors.
Product Development
The second strategic choice in the Ansoff Matrix is to use a ‘Product Development’ plan to create new items for existing markets (customers). Because the marketing mix’s ‘Product’ and ‘Promotion’ parts will vary (at a minimum), the risk is larger than market penetration. This strategy’s effectiveness hinges on the company’s ability to perform effective research and gain insight into consumer and market needs, as well as their own internal capabilities and competences for creating innovation.
Market Development
The third strategic option is to use a ‘Market Development‘ plan to expand existing products into new markets. This is also thought to be riskier than market penetration because understanding the complexities of new markets can be challenging. The marketing mix is expected to alter in two ways: ‘Place,’ with new channels and routes to market being considered, and ‘Promotion,’ with new target segments being promoted.
Diversification
The Ansoff Matrix’s final approach is ‘Diversification,’ which entails creating new products for new markets. Because the company is entering a new market, this strategy is considered the riskiest of the four. This risk can be avoided by implementing ‘related’ diversification, which has the potential to yield the best results.
