Chapter 2
Company and Marketing
Strategy
Idil Yaveroglu
Lecture Notes
Planning
Strategic Planning - The process of developing
and maintaining a strategic fit between the
organization’s goals and capabilities and its
changing marketing opportunities.
Steps in Strategic Planning
Mission Statement


A statement of the organizations scope and purpose,
often identifying its customers, markets, products,
technology and values.
A statement of what it wants to accomplish in the
larger environment
 Should be market oriented not product or
technology oriented.
 Old: Industry
/ Product: Newspaper / Railroad
 New: Customer / Benefit: _________ / __________
Market-Oriented Mission
A mission statement asks..




What is our business?
Who is the customer?
What do consumers
value?
What should our
business be?
A mission statement should be:






An “invisible hand”
Neither too narrow nor too
broad
Should be market oriented,
not product oriented
Fitting of market
environment
Based on distinctive
competencies
Motivating
Example Mission Statements
“We create fantasies – a place where America still works the way it’s
supposed to”
We help people experience the emotion of competition, winning,
and crushing competitors.
We sell lifestyle and self expression; success and status, memories,
hopes and dreams.
Google’s mission is to organize the world‘s information and make it
universally accessible and useful.
“..creativity, quality design and rapid turnaround to adjust to changing market demands”
Example: Southwest airlines
http://www.youtube.com/watch?v=DYA_ivyj3kE
http://www.youtube.com/watch?v=3ccinu-bY3s
http://www.youtube.com/watch?NR=1&v=Jy0Yf1CAsuQ&feature=endscr
een
Mission
Statement
Marketing
Objectives
Business
Objectives
Designing the Business Portfolio



Business Portfolio – the collection of businesses
and products that make up the company
Identify key businesses or strategic business units.
A strategic business unit is a unit of a company
with a separate mission and objectives and that
can be planned independently from other
company businesses.
Assess attractiveness of the SBUs
The BCG Matrix
MS of your business
MS of biggest player
Strategies that can be followed for each SBU:
Build: invest more
Hold: invest enough to hold current position
Harvest: Milking ST cash flow
Divest: Phasing out
A “healthy” portfolio?
GROWTH-SHARE MATRIX - FIRM A
120.0%
VAZY-Ad
VAZA-Ad
VAZF-Fo
VAZA-Fo
VAZY-Fo
50.0%
VAZY-In
VAZA-In
SAND-Hi
SAND-Ot
SASI-Si
SACK-Ot
SAND-Si
SAND-Pr
- 20.0%
5.0
1.0
0.1
Relative market share
A “sick” portfolio?
GROWTH-SHARE MATRIX - FIRM O
120.0%
50.0%
SOAP-Hi
SOLO-Hi
SOAP-Si
SONG-Bu
SOAP-Pr
SOAP-Bu
- 20.0%
5.0
1.0
0.1
Relative market share
Procter and Gamble


http://www.pg.com.tr/procter/pg_sitemap.htm
http://www.pg.com/en_US/brands/all_brands.sht
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Limitations of the BCG Matrix


Difficult to implement – sometimes it is difficult to
define SBUs and measure market share and growth
Classifies current businesses but provides little
advice for future planning.
Product/Market Expansion Grid
Strategic Windows
Market
Penetration
Market
Development
Product
Development
• Increase market share among existing customers
• Attract new customers to existing products
• Create new products for present markets
• Introduce new products into new markets
Diversification
Marketing Strategy and Marketing Mix
Target Market Strategy

Segment the market based on groups with
similar characteristics

Analyze the market based on attractiveness of
market segments

Select one or more target markets

Find points of difference

Position your product

Develop a marketing mix that will produce
satisfying exchanges with target markets
Marketing Mix
 The
marketing mix includes controllable and tactical
marketing tools knows as the 4P’s
 The 4P’s include
 Product
 Place
 Promotion
 Price
The Marketing Mix
SWOT Analysis
S
W
O
T
Things the company does well.
Internal
Things the company does not do well.
Conditions in the external environment that favor
strengths.
External
Conditions in the external environment that do not
relate to existing strengths or favor areas of current
weakness.
©South-Western College Publishing
SWOT Analysis
Strengths and Weaknesses
INTERNAL
o
o
o
o
o
o
Production Costs
Marketing Skills
Employee Capabilities
Financial Resources
Available Technology
Company/Brand Image
SWOT Analysis
Opportunities and Threats
EXTERNAL
oSocial
oTechnological
oDemographic
oPolitical/Legal
oEconomic
oCompetitive
Competitor Analysis
Identifying Competitors
 Competitor myopia: a narrow view of the potential
competitors
Fall of the Railroads

“They let others take customers away from them
because they assumed themselves to be in the railroad
business rather than in the transportation business. The
reason they defined their industry wrong was because they
were railroad oriented instead of transport oriented; they
were product oriented instead of customer oriented.”
 Theodore Levitt “Market Myopia”

Competitor Analysis
Identifying Competitor Strategies
 Strategic group – group of firms in an industry following
the same or similar strategy in a given target market.
 Benchmarking – process of comparing the companies
products and processes to those of competitors or
leading firms in other industries to identify best practices
and find ways to improve quality and performance
 Competitors to Attack and Avoid


Weak vs Strong competitors
Finding Unontested Market Spaces

Blue Ocean vs Red Ocean Strategies
Competitive Strategies

Cost Leadership: Company works to achieve lowest production and
differentiation costs


Eg. Walmart
Differentiation: Company focus is on creating a differentiated
product


…is an attractive approach whenever buyers needs are too diverse to
be satisfied by a standardized product
Its essence is to be unique in ways that are valuable to the buyer, and
that can be sustained



A premium price could be charged for the product
Eg. Nike
Focus: Company focuses its efforts by serving a few market
segments

Eg. Rolex