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Study notes welcome you all. In this session, we look at the company-wide strategic planning. Enjoy this session 

Introduction

Let’s talk about Nike shoes, everyone here and there knows about Nike shoes right? Why everyone knows about Nike? What is the reason behind this? Well, everyone knows about Nike because Nike didn’t just provided good athletic shoe, Nike builds good customer relationship. In the late 1990s, Nike sales were dropping as creative work was dying. They were looking like every other sports equipment providing company. Right after that things turned around as Nike looked into their roots and focused on product innovation and developing good customer relationship. Like, Nike every outstanding marketing organization should focus on developing customer-driven strategy and programs which will create customer value and relationship.

you might want to see five concepts of marketing

Company-wide strategic planning: Defining marketing’s role

According Philip Kotler: Company-wide strategic planning guides marketing and planning. Like marketing strategy, the company’s broad strategy must also be customer focused.

what is strategic planningStrategic planning is the process of developing and maintaining a strategic fit between the organization’s goals and capabilities and its changing marketing opportunities. Every organization must develop a plan for its long-run survival and growth. And strategic planning sets the stage for the rest of planning in the organization. If you fail to plan, than I have to say you are planning to fail. An organization usually prepares annual, long range and strategic plan. The annual and long-range plans deals with company current businesses and explains how to keep them going. Planning activities occur at the business unit, product and market levels and include
  • Defining the company mission
  • Setting company objectives and goals
  • Developing business portfolio
  • Planning marketing and other functional strategies
    four steps of strategic planning

Defining the company mission:

A company exists to accomplish something and this purpose should be clearly stated. Forming a good mission begins with answering some question such as: What is our business? Who is the customer? What do customers value? What should our business be? These simple looking questions are the most difficult question a company has to answer. A successful company always raises these question to remind them about their mission. A company forms a mission statement by answering these questions. Now you be might thinking what is mission statement? Mission statement is a formal statement of the company's purpose—what it wants to achieve in the larger environment. A mission statement should be like an invisible hand, which will guide people in the organization. People should avoid making mission statement too narrow or too broad. Some organization uses product oriented mission statement such as 'we make and sell furniture.' This should be avoided as product and technology eventually gets outdated but basic market needs last forever. So an organization mission statement should be market oriented and motivating. For example, a brokerage firm market-oriented mission statement should be ‘We are the guardian of our customer financial dreams’ not “we are a brokerage firm’. Below table will help you understand the difference between product oriented and market-oriented mission statement.
example of product and market oriented definition

Setting company objectives and goal:

Now a company turns its mission into detail business and marketing objectives. Every manager should have objectives and be responsible for reaching them. For example, ABC company which makes and markets kitchen and bathroom fixtures. Everything from toilet to a kitchen sink. But ABC Company also offers other product and services including furniture, stone, backup power system etc. and owns a resort. ABC Company ties this different product portfolio under the mission “contributing to a higher level of gracious living to those who are touched with our products and services.” This broad mission of ABC Company leads to a hierarchy business and marketing objectives. The overall objective of ABC Company is to build profitable customer relationship by developing beautiful and innovative products. ABC Company does this by investing in research and design. Research is expensive and it is funded through the profit so increasing profit becomes another major objective for ABC Company. Profits can be increased by expanding sales or reducing the cost of production. Sales can be expanded by increasing market share in the home country or by entering foreign markets. Market share can be increased by high production, promotion or cutting prices. These goals then become the company current marketing objectives. Marketing strategies and programs must be developed to support these marketing objectives.

That's all for today, in our next session we will look designing the business portfolio. Thank you!

Company wide strategic planning and its four steps
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