Chapter 3:

Market-Oriented Strategic
Planning

Otterbein College
Winter 2000

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 Objectives

• Corporate and division strategic planing

• Business unit planning
• The marketing process
• Product level planning
• The marketing plan

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 Market-Oriented Strategic Planning

Objectives Resources

Skills Opportunities

10/10/2005 3-3

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 Market-Oriented Strategic Planning

Objectives Resources

Profit
and
Growth
Skills Opportunities

10/10/2005 3-4

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 Corporate Headquarters Planning

• Define the corporate mission

• Establish strategic business units (SBUs)

• Assign resources to SBUs

• Plan new businesses, downsize older ones

10/10/2005 3-5

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 Strategic Planning, Implementation, & Control Process

Planning Implementation Control

Corporate Measuring
planning Organizing results
Division
planning Diagnosing
results
Business Implementing
planning
Taking
Product corrective
planning action

10/10/2005 3-6

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 Good Mission Statements

Limited number of goals

Stress major policies & values

Define competitive scopes

10/10/2005 3-7

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Boston Consulting Group’s Growth-Share Matrix

20%-
Market Growth Rate
Stars Question marks
4
18%-
16%-
14%-
3
?2 ? 1
12%- 5
10%-
8%- Cash cow Dogs
6%- 8
4%-
2%- 6
0
7
10x 4x 2x 1.5x 1x .5x .4x .3x .2x .1x
Relative Market Share
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 Market Attractiveness: Competitive
Position Portfolio Classification

BUSINESS STRENGTH
Strong Medium Weak
1.00
MARKET ATTRACTIVENESS

5.00 3.67 2.33

5.00 Joints
Low Medium High

Hydraulic Aerospace
pumps fittings
3.67
Clutches
Fuel
pumps
Flexible
2.33 diaphragms
Relief
valve
1.00
Invest/grow
10/10/2005 Selectivity/earnings Harvest/divest
3-9

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 The Strategic-Planning Gap

Desired
Desired
sales
sales
Diversification growth
Strategic-
planning
Integrative growth gap
Sales

Intensive growth

Current
Current
portfolio
portfolio

0 5 10
10/10/2005
Time (years) 3-10

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 Intensive Growth Strategies:
Ansoff’s Product/Market Expansion Grid

Existing New
products products

Existing 1. Market 3. Product

markets penetration development

New 2. Market
markets development 4. Diversification

10/10/2005 3-11

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 Opportunity Matrix

Success Probability Opportunities

High Low
1. Company develops a more
powerful lighting system
Attractiveness

2. Company develops a device

High 1 2 for measuring the energy
efficiency of any lighting
system
3. Company develops a device
for measuring illumination
level
4. Company develops a
Low 3 4 software program to teach
lighting fundamentals to TV
studio personnel

10/10/2005 3-12

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 Threat Matrix

Probability of Occurrence Threats

High Low
1. Competitor develops a
superior lighting system
Seriousness

High 1 2
2. Major prolonged
economic depression

3. Higher costs

Low 3 4
4. Legislation to reduce
number of TV studio
licenses
10/10/2005 3-13

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 The McKinsey 7-S Framework

Structure
Structure

Strategy
Strategy Systems
Systems

Shared
Shared
values
values
Skills
Skills Style
Style

Staff
Staff
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 The Value-Delivery Process
(a) Traditional physical process sequence

Make the product Sell the product

Design Price Sell Advertise/
product Procure Make promote Distribute Service

(b) Value creation & delivery sequence

Choose the Value Provide the Value Communicate the Value

Strategic marketing Tactical marketing

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 The Marketing Plan

Executive Summary & Table of Contents

Current Marketing Situation
Opportunity & Issue Analysis
Objectives
Marketing Strategy
Action Programs
Projected Profit-and-loss
Controls
10/10/2005 3-16

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