Strategic Planning

Week 2

CHAPTER 2

STRATEGIC PLANNING AND THE MARKETING PROCESS

CHAPTER OUTLINE

Introduction

a. The chapter begins with an in-depth appraisal of the history and marketing practices

of the world-famous Intel Corporation.

b. The purpose of this section is to demonstrate that no matter how good a company’s

basic product may be, the organization can still be vulnerable to decline unless

aggressive and innovative policies and strategies are maintained. Changing market

opportunities must be explored and pursued.

c. Intel has found ways to grow profitably despite a rapidly changing market. They

also found unique ways to advertise their product. Today, everyone asks for

products that have the Intel chip “inside.”

d. However, the day of the PC may be on the wane and Intel must meet the challenge

of finding new strategies to meet new market demands and opportunities.

e. All companies must look ahead and develop long-term strategies to meet the

changing conditions in their industries. Each company must find the game plan

that makes the most sense given its specific situation, opportunities, objectives,

and resources.

Strategic Planning

a. Many companies operate without formal plans. However, formal planning can

provide many benefits:

1). It encourages management to think ahead systematically.

2). It forces managers to clarify objectives and policies.

3). It leads to better coordination of company efforts.

4). It provides clearer performance standards for control.

5). It is useful for a fast-changing environment since sound planning helps the

company anticipate and respond quickly to environmental changes and sudden

developments.

b. There are three different types of plans that companies might use:

1). Annual plans (deals with the company’s current businesses and determine how to keep them going).

2). Long-range plans (also deals with company’s current businesses and determine how to keep them prosperous).

3). Strategic plans involve adapting the firm to take advantage of opportunities in

its constantly changing environment.

c. Strategic planning is defined as the process of developing and maintaining a

strategic fit between the organization’s goals and capabilities and its changing

marketing opportunities.

1). Strategic planning sets the stage for the rest of the planning in the firm.

2). There are four steps to the strategic planning process:

a). Defining a clear company mission.

b). Setting supporting company objectives.

c). Designing a sound business portfolio.

d). Planning and coordinating marketing and other functional strategies.

Steps in Strategic Planning

Defining the Company’s Business and Mission

d. An organization exists to accomplish something.

e. When management senses that the organization is drifting, it is time to renew its

search for purpose by asking:

1). What is our business?

2). Who is our customer?

3). What do customers value?

4). What should our business be?

f. The first step in the strategic planning process is defining the company mission.

1). A mission statement is a statement of the organization’s purpose—what it wants

to accomplish in the larger environment.

2). A clear mission statement acts as an “invisible hand” that guides people in the

organization.

3). Market definitions of a business are better than product or technological defin-

itions. Products and technologies can become outdated, but basic market needs

may last forever.

4). A market-oriented mission statement defines the business in terms of satisfying

basic customer needs.

g. The mission statement must avoid being too narrow or too broad. Mission

statements must:

1). Be realistic.

2). Be specific.

3). Fit the market environment.

4). Indicate distinctive competencies.

5). Be motivating.

Setting Company Objectives and Goals

h. The company’s mission needs to be turned into detailed supporting objectives for

each level of management. This second step in the strategic planning process re-

quires the manager to set company goals and objectives and be responsible for

achieving them.

1). The mission leads to a hierarchy of objectives including business and marketing

objectives.

2). Objectives should be as specific as possible.

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