Term
| what is the main purpose of strategic planning? |
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Definition
| strategic planning aims to help firms understand how to compete for the future |
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Term
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Definition
the process of developing and maintaining a strategic fit between the organizations goals and capabilities in the light of changing market opportunities. it is dependent on:
clear company mission
supporting objectives
sound business portfolio
coordinated functional strategies |
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Term
| corporate level steps in strategic planning |
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Definition
defining company mission
setting company objectives and goals
designing the business portfolio |
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Term
| business unit, product and market level strategies |
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Definition
| planning marketing and other fuctional strategies |
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Term
| mission statements should be ____-_____ and defined in terms of satisfying ______ ______. |
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Definition
| mission statements should be market-oriented and defined in terms of satisfying customer needs |
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Term
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Definition
| management evaluates the products and businesses that make up the company, putting strong resources into its more profitable businesses and phase down it's weaker ones. ABUs are evaluated on two important dimensions: the attractiveness of the SBU's market, and the strength of the SBU's position in that market. |
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Term
| strategic business unit (SBU) |
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Definition
| the key businesses that make up the company |
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Term
| what is the hierarchy of strategic planning? |
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Definition
| mission statements need to be turned into detailed and specific objectives at each level of management (including marketing). strategies are then developed to meet these objectives |
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Term
| what is marketing's role in strategic planning? |
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Definition
marketing provides a guiding philosophy that suggests that the company's strategy revolve around the needs of important customer groups.
it also helps to identify attractive market opportunities and asses the company's potential to take advantage of them |
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Term
| what is the goal of marketing strategy? |
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Definition
that the focus is on developing marketing position and customer satisfaction and retention
ex- westpac's strategic priorities |
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Term
| what are the differences between corporate strategy, business strategy, and marketing strategy? |
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Definition
corporate strategy is concerned with the economic value and financing requirements of the organization, and the returns required by stakeholders
business strategy is focused on building, defending and maintaining a competitive position through development and implementation of competitive marketing strategies
the focus of marketing strategy is on the planning and coordination of marketing resources and the integration of the marketing mix to achieve a desired result in the markets selected for targeting by the business |
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Term
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Definition
| focuses on shareholder value by building core competencies to add economic value |
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Term
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Definition
| focuses on business value by having distinctive competencies involving developing competitive position and advantage to add economic value |
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Term
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Definition
| focuses on customer value by developing market position and customer satisfaction in order to create, maintain and defend customer value |
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Term
| what is the optimal balance perspective? |
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Definition
| in the ultimate balance perspective the shareholder and the customer value are equally valued by management |
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Term
| how should marketing objectives be organized? |
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Definition
| marketing objectives should be specific, measurable, achievable, realistic, and timely. |
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Term
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Definition
| a business portfolio planning method that classifies all a company's SBUs by the growth share matrix. it uses measures of market growth rate and relative market share to determine four different types of SBUs |
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Term
| market growth rate (used in BCG matrix) |
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Definition
| found on the vertical axis of the BCG matrix, the market growth rate provides a measure of market attractiveness |
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Term
| relative market share (BCG matrix) |
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Definition
| found on the horizontal axis of the BCG matrix, relative market share serves as a measure of company strength in the market |
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Term
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Definition
1. stars
2. cash cows
3. dogs
4. question marks |
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Term
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Definition
| stars are high growth, high share businesses or products. they often need heavy investments to finance their rapid growth. eventually their growth will slow down and they will turn into cash cows |
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Term
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Definition
| 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 a lot of cash that the company uses to pay its bills and support other SBUs that need investment |
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Term
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Definition
| question marks are low share business units in high growth markets. they require a lot of cash to hold their share, let alone increase it. management has to think hard about which question marks it should try to build into stars and which should be phased out |
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Term
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Definition
| 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. |
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Term
| what does the BCG planning approach say about the four groups? |
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Definition
| the BCG planning approach says that they company invests funds from mature successful products and businesses (cash cows) to support promising products and businesses in faster growing markets (stars and question marks) in hopes of turning them into future cash cows |
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Term
| how does the BCG affect strategy? |
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Definition
| the BCG must decide how much it will invest in each product or business (SBU). For each SBU it must decide whether to build (invest more in the SBU), hold (invest just enough to maintain current level), harvest (milk the SBU for short term cash flow regardless of the long term effect) or divest (selling the SBU or phasing it out and using the resources elsewhere). |
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Term
| what does the GE matrix do? |
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Definition
| the GE matrix maps SBUs on a grid of the industry and the SBU's position within that industry. Using the axis "industry attractiveness" and "SBU strength" the GE matrix is able to incompass more variables the the BCG matrix |
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Term
| what are the strategic implications of GE matrix results? |
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Definition
resource allocation recommendations can be made in regards to a SBU by it's position within the matrix of whether to:
1. Grow: strong SBUs in attractive industries, average SBUs in attractive industries, and strong SBUs in average industries
2. Hold: average SBUs in average industries, strong SBUs in weak industries, and weak SBUs in attractive industries
3. Harvest: weak SBUs in unattractive industries, average SBUs in unattractive industries, and weak SBUs in average industries |
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Term
| what are some factors of industry attractiveness in the GE planning grid? |
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Definition
| market size, market growth rate, industry profit margin, amount of competition, seasonality/cyclality demand, industry cost structure |
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Term
| what are some factors of business strength in the GE planning grid? |
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Definition
| companies profit share, price competitiveness, product quality, customer/market knowledge, sales effectiveness, geographic advantages |
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Term
| Ansoff's growth vector matrix (aka product/expansion grid) |
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Definition
| a portfolio planning tool used to assist in identifying growth opportunities through market penetration, market development, product development, or diversification based on the "increasing newness" of products/services and markets/customers |
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Term
| "To be successful, a company must do a better job of ______ _____ ______ than its _______." |
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Definition
| To be successful, a company must do a better job at satisfying target customers than its competitors |
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Term
| "Marketing strategies must be geared to the needs of the _____ and also take into account the ______" |
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Definition
| Marketing strategies must be geared to the needs of the consumer and also take into account the competitors. |
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Term
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Definition
| Recognized brands make shopping easier because brand names connect a product with the benefits the customer can expect. This connection is learned from the customer's experience and marketing activities. |
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Term
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Definition
| brand familiarity = customer recognition and acceptance |
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Term
| what are the five levels of brand familiarity used in strategic planning? |
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Definition
1. rejection
2. non-recognition
3. brand recognition
4. brand preference
5. brand insistence
marketing strategies need to change to move customers on to the next level |
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Term
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Definition
| brand equity is the value of the brand based on its ability to achieve high brand loyalty. It is also the extent to which customers will pay more for the brand |
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