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PowerPoint by Yu Hongyan Business School of Jilin University

Chapter 4 Winning Markets Through Strategic Planning, Implementation, and Control. PowerPoint by Yu Hongyan Business School of Jilin University. Implementation. Control. Corporate planning Division planning Business planning Product planning. Organizing Implementing. Measuring

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PowerPoint by Yu Hongyan Business School of Jilin University

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  1. Chapter 4 Winning Markets Through Strategic Planning, Implementation, and Control PowerPoint by Yu Hongyan Business School of Jilin University Prof.YU Hongyan JLU

  2. Implementation Control Corporate planning Division planning Business planning Product planning Organizing Implementing Measuring results Diagnosing results Taking corrective action Strategic-Planning, Implementation, and Control Process Planning

  3. Objectives 1. CORPORATE AND DIVISION STRATEGIC PLANNING 2. BUSINESS STRATEGY PLANNING 3. THE MARKETING PROCESS 4. MANAGING MARKETING PROCESS Prof.YU Hongyan JLU

  4. 1. CORPORATE AND DIVISION STRATEGIC PLANNING 1.1 Defining the Corporate Mission 1.2 Establishing Strategic Business Units (SBUs) 1.3 Assigning Resources to SBUs 1.4 Planning New Businesses, Downsizing Older Businesses Prof.YU Hongyan JLU

  5. 1. CORPORATE AND DIVISION STRATEGIC PLANNING (cont’d) • 1.1Corporate Mission • Peter Drucker • What is our business? • Who is our customer? • What is of value to the customer? • What will our business be? • What should our business be? Prof.YU Hongyan JLU

  6. 1.1 Corporate Mission Good Corporate Mission Limited number of goals Stress major policies & values Define competitive scopes 1. CORPORATE AND DIVISION STRATEGIC PLANNING (cont’d) Prof.YU Hongyan JLU

  7. For more than 50 years, Our Credo has helped us in fulfilling our responsibilities to customers, employees, communities and stockholders. The mission of Southwest Airlines is dedication to the highest quality of Customer Service delivered with a sense of warmth, friendliness, individual pride, and Company Spirit. To Our Employees…..

  8. 1. CORPORATE AND DIVISION STRATEGIC PLANNING (cont’d) 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 Prof.YU Hongyan JLU

  9. 1. CORPORATE AND DIVISION STRATEGIC PLANNING (cont’d) • Motorola • To honorably serve the needs of the community by providing products and services of superior quality at a fair price to our customers; • to do this so as to earn an adequate profit which is required for the total enterprise to grows;and by so doing provide the opportunity for our employees and shareholders to achieve their reasonable personal objectives Prof.YU Hongyan JLU

  10. Discussion Scenario Critique the following hypothetical mission statement. “The overall mission of KDT is to provide cutting edge Internet services to consumer and business clients, while increasing the value of our shareholder’s investment.” 中国建设银行,建设美好生活 中国移动:沟通从心开始 Prof.YU Hongyan JLU

  11. 1. CORPORATE AND DIVISION STRATEGIC PLANNING (cont’d) 1.2 Establish Strategic business units (SBUs) • A business can be defined in terms of three dimensions • Customer group • Customer needs • Technology Prof.YU Hongyan JLU

  12. Derek Abell(1980)Defining the Business based on customer group, customer needs and technology. It is customer satisfying process not a goods producing process Customer need 空调 通风 照明 供暖 蜡烛 Customer group 电 视 制作室 家庭 工 厂 办公室 白炽灯 日光灯 Technology

  13. 1. CORPORATE AND DIVISION STRATEGIC PLANNING (cont’d)

  14. 1. CORPORATE AND DIVISION STRATEGIC PLANNING (cont’d) 1.2 Establish Strategic business units (SBUs) • SBUs share three characteristics: • Single business or collection of businesses which can be managed separately • Has own set of competitors • Has manager responsible for strategic planning and profits Prof.YU Hongyan JLU

  15. Common Tools Philosophy Profitability Goals Portfolio Matrix $ Market Share 1. CORPORATE AND DIVISION STRATEGIC PLANNING (cont’d) 1.3 Assigning Resources to SBUs Prof.YU Hongyan JLU

  16. 1. CORPORATE AND DIVISION STRATEGIC PLANNING (cont’d) 1.3 Assigning Resources to SBUs The Boston Matrix • The Boston Matrix is a well known tool for the marketing manager • It was developed by The Boston Consulting Group (BCG) • It is an approach to product or business portfolio planning • It has two controlling aspect namely relative market share (meaning relative to your competition) and market growth Prof.YU Hongyan JLU

  17. Relative market share high 1 low Market Growth Rate low 10 high BCG Portfolio Matrix High growth Low market share Need cash Poor profit margins High growth Market leaders Require cash $ Low growth High market share High cash flow Low growth Low market share Minimal cash flow

  18. Relative market share HIGH LOW Palmtop掌上型电脑(PROBLEM CHILD) 手提电脑(STAR) Market growth rate LOW HIGH PC(CASH COW) Mainframe主机Computer(DOG) Discussion Scenario

  19. 20%- 18%- 16%- 14%- 12%- 10%- 8%- 6%- 4%- 2%- 0 Stars Question marks 4 ? ? 1 3 ? ? 5 2 Market Growth Rate Dogs Cash cow 8 6 7 10x 4x 2x 1.5x 1x .5x .4x .3x .2x .1x Relative Market Share The Boston Consulting Group’s Growth-Share Matrix

  20. 1. CORPORATE AND DIVISION STRATEGIC PLANNING (cont’d) 1.3 Assigning Resources to SBUs • The Boston Matrix Prof.YU Hongyan JLU

  21. 1. CORPORATE AND DIVISION STRATEGIC PLANNING (cont’d) 1.3 Assigning Resources to SBUs • Life cycle Prof.YU Hongyan JLU

  22. Aim is to increase market share, Provide financial resources if SBU (Problem Child) has potential to be a Star. Build Hold Aim is to preserve market share if SBU is a successful Cash Cow. Use cash flow for other SBUs. Harvest Aim is to Increase short-term cash return. Appropriate for all SBUs except Stars. Divest剥夺 Get rid of SBUs with low shares in low-growth markets.appropriate for dog and question 1. CORPORATE AND DIVISION STRATEGIC PLANNING (cont’d) 1.3 Assigning Resources to SBUs Prof.YU Hongyan JLU

  23. BUSINESS STRENGH STRONG MEDIUM WEAK HIGH High Attractiveness Medium Attractiveness MARKET ATTRACTIVENESS MEDIUM Low Attractiveness LOW Market Attractiveness Matrix (GE)

  24. BUSINESS STRENGTH Strong Medium Weak 1.00 3.67 2.33 5.00 5.00 Joints High Aerospace fittings Hydraulic pumps 3.67 Clutches MARKET ATTRACTIVENESS Fuel pumps Medium Flexible diaphragms 2.33 Low Relief valve 1.00 Invest/grow Selectivity/earnings Harvest/divest 1. CORPORATE AND DIVISION STRATEGIC PLANNING (cont’d)

  25. Medium Strong Weak high Medium Low

  26. 1. CORPORATE AND DIVISION STRATEGIC PLANNING (cont’d) 1.3 Assigning Resources to SBUs • Attributes of Market Attractiveness • High profitability • Rapid growth • Lack of government regulation • Insensitivity to price increase • Lack of competition • Availability of technology Prof.YU Hongyan JLU

  27. 1. CORPORATE AND DIVISION STRATEGIC PLANNING (cont’d) 1.3 Assigning Resources to SBUs • Business Strength Market share • Share growth • Product quality • Brand reputation • Distribution network • Promotional effectiveness • Productive capacity Prof.YU Hongyan JLU

  28. 1. CORPORATE AND DIVISION STRATEGIC PLANNING (cont’d) 1.3 Assigning Resources to SBUs • Critique of Portfolio Models • +help managers think more strategically • +understand the economics of their business better • +improve the quality of their plans • +Improve communication between B&C • +Pinpoint the information gap • +Eliminate weaker business and strengthen Prof.YU Hongyan JLU

  29. 1. CORPORATE AND DIVISION STRATEGIC PLANNING (cont’d) 1.3 Assigning Resources to SBUs • Portfolio models must be used cautiously • -too much emphasis on market share growth • -sensitive to the rating and weights Prof.YU Hongyan JLU

  30. 1. CORPORATE AND DIVISION STRATEGIC PLANNING (cont’d) • 1.4 Planning New Businesses and Downsizing Old Businesses • Identify opportunities to achieve further growth within the company current business –intensive growth opportunity • Build business that are related to the company current business-integrative growth • Add attractive business that are unrelated to the company current business-diversification growth Prof.YU Hongyan JLU

  31. Desired sales Diversificationgrowth Strategic- planning gap Integrative growth Sales Intensive growth Current portfolio 0 5 10 Time (years) The Strategic-Planning Gap

  32. Existing products New products 1. Market penetration 3. Product development Existing markets 2. Market development New markets Three Intensive Growth Strategies: Ansoff’s Product/Market Expansion Grid 4. Diversification

  33. Review- 1. CORPORATE AND DIVISION STRATEGIC PLANNING 1.1 Defining the Corporate Mission 1.2 Establishing Strategic Business Units (SBUs) 1.3 Assigning Resources to SBUs 1.4 Planning New Businesses, Downsizing Older Businesses Prof.YU Hongyan JLU

  34. 2. BUSINESS STRATEGIC-PLANNING Figure 4-4:The Business Strategic-Planning Process Prof.YU Hongyan JLU

  35. 2. BUSINESS STRATEGIC-PLANNING (cont’d) • 2.1 Business Mission Prof.YU Hongyan JLU

  36. 2.2 SWOT Analysis Opportunities and threats stemming from the external environment Internal strengths and weaknesses Monitor key forces for trends Macro environment, and microenvironment For each trend, conduct an MOA - Marketing Opportunity Analysis 2. BUSINESS STRATEGIC-PLANNING (cont’d) Prof.YU Hongyan JLU

  37. Opportunity Matrix Success Probability Opportunities 1. Company develops a more powerful lighting system 2. Company develops a device for measuring the energy efficiency of any lighting system 3. Company develops a device for measuring illumination level 4. Company develops a software program to teach lighting fundamentals to TV studio personnel High Low 1 2 High Attractiveness 3 4 Low

  38. Threat Matrix Threats Probability of Occurrence 1. Competitor develops a superior lighting system 2. Major prolonged economic depression 3. Higher costs 4. Legislation to reduce number of TV studio licenses High Low 1 2 High Seriousness 3 4 Low

  39. 2.2 SWOT Analysis Opportunities and threats stemming from the external environment Internal strengths and weaknesses Brand awareness, image, reputation Distribution, pricing, customer loyalty, product benefits Finance, R&D, manufacturing 2. BUSINESS STRATEGIC-PLANNING (cont’d) Prof.YU Hongyan JLU

  40. item performance 特强 稍强 中间 稍弱 特弱 weight high middle low 营销 1，企业声誉 2，市场份额 3，顾客满意 4，顾客维持 5，产品质量 6，服务质量 7，定价有效性 8，分销有效性 9，促销有效性 10，销售人员有效性 11，创新效果 12，地理覆盖范围 进行优劣势分析的检查表 （续〕

  41. 项目 绩效 特强 稍强 中间 稍弱 特弱 weight 高 中 低 财务 13，资金成本或有效性 14，现金流 15，财务稳健性 制造 16，设备 17，规模经济性 18，生产能力 19，技能和奉献型工人 20，准时生产交货能力 21，技术和制造工艺 组织 22，远见卓识的领导 23，能奉献的员工 24，创业导向 25，柔性或反应能力

  42. 2. BUSINESS STRATEGIC-PLANNING (cont’d) Trade-off 2.3 Goal Formulation Effective Goals: Must be Realistic Must be Consistent Must be Hierarchical Must be Stated Quantitatively Prof.YU Hongyan JLU

  43. 2. BUSINESS STRATEGIC-PLANNING (cont’d) Discussion Scenario Effective Goals: Critique the following objectives: Our objectives are to . . . 1) better serve customers. 2) be the best we can be. 3) increase market share. 4) maximize shareholder wealth. Prof.YU Hongyan JLU

  44. “Our objective is to increase market share by 40% and to obtain customer satisfaction ratings of at least 90% in 2001.” 2. BUSINESS STRATEGIC-PLANNING (cont’d) • 2.3Goal Formulation Prof.YU Hongyan JLU

  45. 2. BUSINESS STRATEGIC-PLANNING (cont’d) • 2.4 Strategy Formulation A plan of action resulting from strategy or intended to accomplish a specific goal Differentiation Porter’s GenericStrategies Focus Overall cost leadership Prof.YU Hongyan JLU

  46. 2. BUSINESS STRATEGIC-PLANNING (cont’d) • 2.5 Program formulation and program implementation involves: • Developing supporting programs • Estimating implementation costs • Carefully managing the details so great strategy isn’t ruined by poor implementation Prof.YU Hongyan JLU

  47. 2. BUSINESS STRATEGIC-PLANNING (cont’d) • 2.6 Feedback and control • Do the right thing(effectiveness) • To do things right(efficiency) • Do the right thing than to do thing right 首先要做对,然后是做好 Prof.YU Hongyan JLU

  48. 3. THE MARKETING PROCESS • 3.1 The Value-Delivery Sequence • Traditional physical process sequence • Value creation and delivery sequence Prof.YU Hongyan JLU

  49. Make the product Sell the product Design product Advertise/ promote Procure Make Price Sell Distribute Service Choose the Value Provide the Value Communicate the Value Strategic marketing Tactical marketing 3.1 The Value-Delivery Process (a) Traditional physical process sequence (b) Value creation & delivery sequence

  50. 3. THE MARKETING PROCESS (cont’d) Figure 4-5: Two Views of the Value-Delivery Process Prof.YU Hongyan JLU

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