MARKETING MANAGEMENT

BUSINESS UNIT STRATEGIC

PLANNING

SESSION 4
BUSINESS UNIT STRATEGIC
PLANNING
Material Source:
Chapter 02 (Marketing Management – Global Edition 15e by Phillip
Kotler; Kevin Keller
 STRATEGIC PLANNING PROCESS

“ Just as every business undertakes strategic planning,

every strategic business unit too must develop a
strategic business plan.
“
The process is largely similar in both cases – only the
scale may be different.
BUSINESS UNIT STRATEGIC
PLANNING
THE PROCESS
 STRATEGIC PLANNING PROCESS
 THE BUSINESS MISSION:
 Each business unit requires a separate mission, a
separate strategy, and often, a different set of
programs. Why?
 Its market dynamics (i.e. forces that drive the
buyers & sellers) are different. Hence, a toilet soaps
business has to be managed differently from a
detergents business.
 STEP 1: SWOT ANALYSIS
 Overall evaluation of a company’s strengths,
weaknesses, opportunities, and threats.
1. Internal Environment Analysis: Strengths &
Weaknesses.
2. External Environment Analysis: Opportunities &
Threats.
 1. Internal Environment Analysis
• Strengths:
• Skills and capabilities a company possesses.
• Resources the company has at its disposal.
• Stronger reputation of the company or its brands.
• Weaknesses:
• What a company does poorly.
• What generates the most customer dissatisfaction.
• What generates the most employee dissatisfaction.
 2. External Environment Analysis
• Opportunities
• Growing market for the company’s products.
• Possibility of market expansion.
• Higher state of technology versus competition.
• Threats
• Strong competitors in the market.
• Slow growth in market potential.
• Competitors having an advantage in terms of technology
or finances.
IDENTIFYING MARKET OPORTUNITIES

 Market opportunity analysis (MOA) essentially is a means of

identifying opportunities, that either exist in the market, or
that can be created.
 SAMPLE QUESTIONS
MARKET OPORTUNITIES ANALYSIS

1. Can we access the target market cost-effectively?

2. Can we communicate benefits convincingly?
3. Do we possess the critical capabilities & resources required?
4. Can we deliver benefits better than competition?
5. Will the profit generated meet or exceed investment
threshold?
 IDENTIFYING MARKET THREATS
• External/ environmental threats: challenges resulting
from unfavorable development or trend in market; may
cause loss of sales and profit.
• High probability of its occurrence can seriously hurt a
business.
• Better companies have contingency plans in place to face or
overcome such threats.
 THE DELL EXAMPLE

• Dell Computers - company founded in 1984 by Michael Dell.

• Strategy built around following core elements:
• Build-to-order manufacturing
• Mass customization
• Partnership/ data sharing with suppliers, for JIT delivery of
components
• Direct sales/ Strong customer service.
SWOT ANALYSIS: THE DELL EXAMPLE

• Dell Computers an example of applying a SWOT analysis

successfully.
• Company pushed back established brands like IBM and
Compaq, to lead the market for desk computers for almost
a decade from late 1990s to early 2000s.
SWOT ANALYSIS: THE DELL EXAMPLE
 External Environment
 Dell’s opportunity: growing demand for desktop
computers; Dell had the infrastructure to deliver computers
in the configuration demanded by customers, and on time.
 Dell’s threat: strong competitors investing in advanced
technology and more demanding channel partners.
SWOT ANALYSIS: THE DELL EXAMPLE
 Dell’s Internal Environment
 Dell’s Strengths: selling more effectively/ efficiently
directly to consumers than IBM/ Compaq.
 Dell’s Weaknesses: brand was not very strong; channel
infrastructure could come under pressure if demand
continued to grow, & dealer relations needed more
investments to be made.
 THE DELL EXAMPLE
 On balance:
• Dell’s unique strategic game plan turned the market in its
favor in the 1990s.
• But, company unable to recognize market shift towards
portable devices – laptops/notebooks around 2005.
• Unable to make major investments on time/ weak
distribution led to major drop in sales & revenue.
STEP 2: GOAL FORMULATION
 GOALS = what a business unit wants to achieve. Under the
“Management By Objective (MBO) system, goals are expected to
be: Goals achieved with MBO can include increasing newsletter subscription, increasing social media following, and doubling web traffic.

1. Realistic: based on SWOT analysis.

2. Quantitative & measurable: the two together.
3. Arranged in a hierarchy: based on ROI.
 Companies generally willing to forego short-term profit to ensure
consistent long-term growth.
STEP 3: STRATEGY FORMULATION
 STRATEGY = game plan for achieving company’s goals.
 THREE AREA OF FOCUS:
1. Marketing strategy: focus on what customer wants.
2. Technology strategy: compatible or well-matched with what
needs to be produced & delivered.
3. Sourcing strategy: acquiring materials that meet the company’s
quality standards cost-effectively.
STEP 3: FORMULATING STRATEGIES
 MICHAEL PORTER’S SUGGESTED GENERIC
STRATEGIES –
3 TYPES:
1. Overall cost leadership: by lowering cost/ lower price
through efficient use of resources, e.g. Ikea.
2. Differentiation: adopting a unique proposition & delivering
superior value, e.g. Apple iPhone.
3. Focus: on one or more chosen segments, e.g. Tapal.
STEP 4: STRATEGIC ALLIANCES: WHY?
 Companies form alliances to leverage capabilities &
resources.
 Traditionally, alliances most commonly found in the
‘airlines business’ – between airlines, between airlines &
hotels, between hotels & car rentals.
 Trend stronger today than ever before!
STEP 4: STRATEGIC ALLIANCES: WHY?
 TYPES OF ALLIANCES:
1. Product or service alliances e.g. Faysal Bank & Honda Atlas
Cars
2. Promotional alliances e.g. PSL & HBL with retailers.
3. Logistical alliances e.g. Restaurants & Foodpanda
4. Pricing alliances e.g. Hotels/ Car Rentals; Soft Drinks/
Water.
MCB BANK ALLIANCES

Source: Google [Oct.3, 2022]

 PROGRAM FORMULATION &
IMPLEMENTATION
 McKinsey’s 7S framework is a
popular model that describes how a
company can holistically and
effectively organize itself for
success.
 When these elements are present
companies can effectively
implement their strategy.
 PROGRAM FORMULATION &
IMPLEMENTATION
 McKinsey & Company: Strategy is only one of seven
elements starting with the letter S.
 First three: Strategy, Structure, & Systems are the
“hardware” of success.
 The next four: Style, Skills, Staff, & Shared Values are the
“software.”
 PROGRAM FORMULATION &
IMPLEMENTATION

 Strategy is a plan developed by a firm to achieve sustained

competitive advantage in the market.
 Structure  represents the way business divisions and units
are organized - the organizational chart of the firm. 
 Systems are the processes and procedures of the company, the
area of the firm that determines how business is done.
 PROGRAM FORMULATION &
IMPLEMENTATION
 Style refers to a way of thinking and behaving in the
company.
 Skills are what employees have to implement the company’s
strategy.
 Staffing refers to the people hired, trained, and assigned to the
right jobs.
 Shared values relate to the common values that every
employee must adhere to.
 PROGRAM FORMULATION &
IMPLEMENTATION
• The three “Hard Ss” are relatively easy to identify, and
management can influence them directly.
• The four “Soft Ss“, on the other hand, can be harder to
manage, as they are less solid, and influenced more by your
company culture.
• But they're just as important as the hard elements if the
organization is going to be successful.
 A FINAL WARNING!

“ A company’s strategic fit with the environment will

“
inevitably erode because the market environment changes
faster than the company’s seven Ss!
 A WAY OUT!

“ The key to success in the long term requires a company’s

“
willingness to adapt to the changing environment & adopt
new goals and behaviors.
END OF SESSION 4
Foods, Refreshment (beverages and ice cream), Home Care, and Beauty & Personal Care.