Strategic_Planning_and_the_Basics.docx

Strategic_Planning_and_the_Basics.docx - BASICS OF...

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BASICS OF STRATEGIC PLANNING – Types of Strategies 1. CORPORATE LEVEL STRATEGY “What businesses (and how many) do we want to be in? o Identifies the portfolio of businesses that, in total, comprise the company and how these businesses relate to each other. Example – PepsiCo – has 4 businesses – Frito-Lay North America, PepsiCo Beverages North America, PepsiCo International, and Quaker Oats North America. 1.Growth strategy – Growing and expanding the business; e.g., joint ventures/acquisitions o Market Penetration . The least risky growth strategy for any business is to simply sell more of its current product to its current customers —a strategy perfected by large consumer goods companies, says McFarland. Think of how you might buy a six-pack of beverages, then a 12-pack, and then a case. "You can't even buy toilet paper in anything less that a 24-roll pack these days," McFarland jokes. Finding new ways for your customers to use your product—like turning baking soda into a deodorizer for your refrigerator—is another form of market penetration. o 2. Market Development . The next rung up the ladder is to devise a way to sell more of your current product to an adjacent market—offering your product or service to customers in another city or state, for example . McFarland
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points out that many of the great fast-growing companies of the past few decades relied on Market Development as their main growth strategy . For example, Express Personnel (now called Express Employment Professionals), a staffing business that began in Oklahoma City quickly opened offices around the country via a franchising model.
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