Chapter 2: Strategic Planning for Competitive advantage2-1 The Nature of strategic planning: ●The managerial process of creating and maintaining a fit between the organizations objectives and resources and the evolving market opportunities ●Goal: long run profitability and growth●Strategic marketing addresses two questions: 1) What is the org. Main activity at a particular time? 2) How will it reach its goals?○EX: Coach, the iconic leather good brand, is making an effort to reinvent itself as sa lifestyle brand. It has introduced a bunch of new products 2-2 Strategic Business units: ●(SBU) a subgroup of a single business or a collection of related businesses within the larger org. ●When properly created each SBU has the following characteristics: ○A distinct mission and a specific market○Control over its resources ○Its own competitors a single business or a collection of related business’ ●There are several tools available that a company can use to manage the strategic direction of its portfolio of business○Ansoff’s strategic opportunity matrix○Boston consulting group model ○General electric model ●Market share and profitability are compatible goals●Ansoff’s strategic opportunity mix: ○Matches products with markets○Market penetration: ■A marketing strategy that tries to increase market share among existing customers (FTR energy)○Market development: ■A marketing strategy that entails attracting new customers to existing products (McDonalds)○Product development: ■A market strategy that entails the creation of new products for present markets (Beats)○Diversification: ■A strategy of increasing sales by introducing new products into new markets (UGG)The Innovation Matrix: ●Ansoff’s matrix does not reflect the reality of how businesses grow ●The layout of the innovation matrix demonstrates that as a company moves away from its core capabilities it traverses a range of change and innovation rather than choosing one of the four in Ansoff’s matrix●The ranges: ○Core innovation (yellow): the decisions implement changes that use existing assets to provide added convenience to existing customers and potentially enticecustomers from other brands (Tide detergent)
○Adjacent innovation (orane): these decisions are designed to take company strengths into new markets (Botox)○Transformational Innovation (red): these decisions result in brand new markets, products and often new businesses. The company must rely on new, unfamiliar assets to develop the type of breakthrough decisions that fall in this category (GoPro)●The Boston consulting group model○Portfolio matrix: a tool for allocating resources among products or strategic business units on the basis of relative market share and market growth rate ○Market share and profitability are strongly linked ○The measure of market share used in the portfolio approach is relative market share ○
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- Spring '14