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Figure 2.1
Three Levels of Business Planning
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Strategic Planning
Managerial decision process that matches firms resources and capabilities to its market opportunities for long-term growth and survival
Top management defines firms purpose and objectives
Example: increase firms total revenues by 20% over next five years
SWOT - Starbucks
Growth Strategy for the US
Strength profitable and cash-rich Threat New potentially damaging competition (Walmart & Kicks) Strategy indicated
Reinforce positioning Introduce flanker brand to compete with Wal-mart on the lower end (Seattle Coffee Company)
SWOT - Starbucks
Growth Strategy for France Strength high quality, global management expertise Strength cash-rich and profitable Opportunity No concept like Starbucks exists in France Threat sock juice damaging pre-existing attitudes US-France political tensions Strategy Target a more receptive segment the young French Sell the American Starbucks experience (coffee, ambience, music, healthful (no-smoking), internet, a cool place to hang out)
Objective
Attitudes in the target segment
Operational Planning
First-line managers focus on day-today execution of functional plans Such planning includes detailed annual, semiannual, or quarterly plans
Example: an objective may be set in terms of units of a product a particular salesperson needs to sell per month (sales quota)
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Mission statement:
A formal document that describes the firms overall purpose and what it hopes to achieve in terms of its customers, products, and resources
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http://www.missionstatements.com/fortu ne_500_mission_statements.html
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Internal Environment
Controllable elements inside a firm that influence how well the firm operates include:
People (human capital), physical facilities, financial stability, corporate reputation, quality products, strong brands, technologies, etc.
External Environment
Elements outside the firm that may affect it either positively or negatively:
Economic, competitive, technological, legal/political/ethical, and sociocultural trends Trends manifest as opportunities or threats Firm cannot directly control external factors but can respond to them via planning
Visit Trendwatching.com
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Recent sociocultural trends influencing food marketing stem from consumer desires for low fat, low carb, and organic foods
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SWOT Analysis
An analysis of an organizations strengths (S) and weaknesses (W) and the opportunities (O) and threats (T) in the external environment SWOT enables the firm to develop strategies that maximize strengths and capitalize upon opportunities
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Figure 2-2
SBUs and the Strategic Plan
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Portfolio analysis:
Assessing the potential of a firms SBUs Helps make decisions regarding which SBUs should receive more or less of the firms resources
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Figure 2-3
Boston Consulting Group (BCG) Matrix
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Figure 2-4
Product-Market Growth Matrix
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Pricing strategies:
Include setting prices for final consumers, wholesalers, and retailers based on costs, demand, or competitors prices
2-30 Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall
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Marketing metrics:
Return on marketing investment (ROMI)
Action plans:
Support plans that guide implementation and control of marketing strategies
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Metrics Moment
ROMI is the revenue or profit margin generated by investment in a specific marketing program divided by the cost of that program (expenditure) at a given risk level, as determined by management
2-33 Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall
Corporate Culture
The way employees dress reflects their organizations corporate culture.
Think about the way people dress at a firm that is familiar to you. What does the typical attire at that firm say about the culture of the organization?
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