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Strategic Planning for Competitive Advantage: 

Strategic Planning for Competitive Advantage Prepared by Deborah Baker Texas Christian University Chapter 2

Learning Objective : 

Learning Objective Understand the importance of strategic marketing and know a basic outline for a marketing plan. 1

Strategic Planning: 

Strategic Planning The managerial process of creating and maintaining a fit between the organization’s objectives and resources and evolving market opportunities. 1

Strategic Planning: 

Strategic Planning LONG RUN PROFITABILITY AND GROWTH 1

Strategic Marketing Planning: 

Strategic Marketing Planning The Marketing Plan 1

Planning: 

Planning The process of anticipating future events and determining strategies to achieve organizational objectives in the future. 1

The Marketing Plan: 

The Marketing Plan A written document that acts as a guidebook of marketing activities for the marketing manager. 1

Why Write a Marketing Plan?: 

Why Write a Marketing Plan? 1

Marketing Plan Process: 

Marketing Plan Process 1

Defining the Business Mission: 

Defining the Business Mission Answers the question, “What business are we in and where are we going?” Focuses on the market(s) rather than the good or service Strategic Business Units may also have a mission statement 2

AMA’s Mission Statement: 

AMA’s Mission Statement 2

PepsiCo’s Mission Statement: 

PepsiCo’s Mission Statement “PepsiCo’s overall mission is to increase the value of our shareholders’ investment. We do this through sales growth, cost controls and wise investment of resources. We believe our commercial success depends upon offering quality and value to our consumers and customers; providing products that are safe, wholesome, economically efficient and environmentally sound; and providing a fair return to our investors while adhering to the highest standards of integrity.” http:\\www.pepsico.com 2

Strategic Business Units (SBUs): 

Strategic Business Units (SBUs) A distinct mission and specific target market Control over their resources Their own competitors Plans independent of other SBUs 2

Marketing Objective: 

Marketing Objective A statement of what is to be accomplished through marketing activities. 3

Marketing Objectives: 

Marketing Objectives Realistic Measurable Time specific Consistent with Organization’s Priorities 3

Examples of Marketing Objectives: 

Examples of Marketing Objectives 3

Marketing Plan Objectives: 

Marketing Plan Objectives 3

SWOT Analysis: 

SWOT Analysis Identifying internal strengths (S) and weaknesses (W) and also examining external opportunities (O) and threats (T) 4

SWOT Analysis: 

SWOT Analysis 4

SWOT Analysis: 

SWOT Analysis 4

SWOT Analysis: 

SWOT Analysis Social Demographic Economic Technological Political/Legal Competitive 4

Environmental Scanning: 

Environmental Scanning Collection and interpretation of information about forces, events and relationships in the external environment that may affect the future of the organization or the marketing plan implementation. 4

Environmental Scanning: 

Environmental Scanning Examination of macroenvironmental forces Social Demographic Economic Technological Political / Legal Competitive Helps identify market opportunities Provides guidelines for design of marketing strategy 4

Learning Objective : 

Learning Objective Identify sources of competitive advantage Identify ways of competing 5

Competitive Advantage: 

Competitive Advantage The set of unique features of a company and its products that are perceived by the target market as significant and superior to the competition. -> Observable to the consumer ->Important to the consumer ->Consumer is willing to pay for difference 5

Competitive Advantage: 

Competitive Advantage 5

Cost Competitive Advantage: 

Cost Competitive Advantage Being the low-cost competitor in an industry while maintaining satisfactory profit margins. 5

Cost Competitive Advantage: 

Cost Competitive Advantage 5

Sources of Cost Reduction: 

Sources of Cost Reduction 5

Product/Service Differentiation: 

Product/Service Differentiation Advantage achieved when a firm provides something that is unique and valuable to buyers beyond simply offering a lower price than the competition. 5

Examples of Product/Service Differentiation: 

Examples of Product/Service Differentiation Product feature (functional; aesthetic) Product performance Brand names Strong dealer network Product reliability Image Service 5

NicheCompetitive Advantage: 

Niche Competitive Advantage Advantage achieved when a firm seeks to target and effectively serve a small segment of the market. 5

Niche Competitive Advantage: 

Niche Competitive Advantage Used by small companies with limited resources May be used in a limited geographic market Product line may be focused on a specific product line 5

“Sustainable”Competitive Advantage: 

“Sustainable” Competitive Advantage An advantage that cannot be copied by the competition.  An advantage is temporary at best because the world changes!!! 5

Sources of “Sustainable” Competitive Advantage: 

Sources of “Sustainable” Competitive Advantage 5

Learning Objective : 

Learning Objective Identify strategic alternatives and describe tools used to help select alternatives. 6

Competitive Rationality : 

Competitive Rationality Industries; product-markets Both customers and competitors learn from the marketplace. Competitors learn about popular products; new ideas; new technologies Customers learn about alternatives; become more demanding

Competitive Rationality: 

Competitive Rationality Results in increasing market turbulence as competitors try to out-do each other More new products, and niche products NOT market equilibrium!!!  escalating competition

Strategic Adaptability (Miles & Snow): 

Strategic Adaptability (Miles & Snow) Prospector: innovator Analyzer: early adapter/copier Defender: later adapter/copier Laggard: dragged into change  strategic window

Strategic Alternatives: 

Strategic Alternatives Increase market share among existing customers Attract new customers to existing products Introduce new products into new markets Create new products for present markets 6

Strategic Opportunity Matrix: 

Strategic Opportunity Matrix 6

Selecting a Strategic Alternative: 

Selecting a Strategic Alternative Philosophy Market Share Profitability $ 6

Portfolio Matrix: 

Portfolio Matrix Tools for allocating resources among products or strategic business units on the basis of relative market share and market growth rate. 6

BCG Portfolio Matrix: 

High growth Market leaders Require cash Large profits Low growth High market share High cash flow Low growth Low market share Minimal cash flow High growth Low market share Need cash Poor profit margins $ BCG Portfolio Matrix 6 Click Screen for Ad

BCG Portfolio Matrix Example: 

BCG Portfolio Matrix Example 6

Strategies for Resource Allocation: 

Strategies for Resource Allocation 6

GE Strategic Matrix: 

GE Strategic Matrix

Marketing Strategy: 

The activities of selecting and describing one or more target markets and developing and maintaining a market mix that will produce mutually satisfying exchanges with target markets. Marketing Strategy 7

Target Market Strategy: 

Target Market Strategy Segment the market based on groups with similar characteristics Analyze the market based on attractiveness of market segments Select one or more target markets 7

Target Market Selections: 

Target Market Selections 7

Target Market Strategy: 

Target Market Strategy 7

The Marketing Mix: 

A unique blend of product, distribution, promotion, and pricing strategies designed to produce mutually satisfying exchanges with a target market. The Marketing Mix 8

Product Strategies: 

Product Strategies The starting point of the “4 Ps” Includes physical unit, package, warranty, service, brand, image, and value Product 8

Distribution (Place) Strategies: 

Distribution (Place) Strategies Place Product availability where and when customers want them. Involves all activities from raw materials to finished products 8

Promotion Strategies: 

Promotion Strategies Promotion Role is to bring about exchanges with target markets Includes integration of personal selling, advertising, sales promotion, and public relations 8

Pricing Strategies: 

Pricing Strategies The most flexible of the “4 Ps” Price X Units Sold = Total Revenue Consider ALL customer costs Price 8

Following Up the Marketing Plan: 

Following Up the Marketing Plan Implementation Evaluation Control Marketing Audit Comprehensive Systematic Independent Periodic 9

The Marketing Audit: 

The Marketing Audit A thorough, systematic, periodic evaluation of the goals, strategies, structure, and performance of the marketing organization. 9

Effective Strategic Planning: 

Effective Strategic Planning 10