Strategic Planning

BCG Matrix & Ansof Matrix

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 Companywide Strategic Planning
Strategic Planning

Strategic planning is the process of developing and maintaining a

strategic fit between the organization’s goals and capabilities
and its changing marketing opportunities.
• It sets the Stage for the rest of planning in the firm.
• Usually firms prepare annual plans, long range plans and
strategic plans

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Chapter 2- slide 2
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 Step in Strategic Planning
Business Unit,
Product, and
Corporate Level market
strategies

………………………
…………….
Defining Setting Designing Planning
company company business marketing and
mission objective portfolio other function
and goal strategies

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 Companywide Strategic Planning
Defining a Market-Oriented Mission

• The mission statement is the

organization’s purpose, what it wants to
accomplish in the larger environment
• Market-oriented mission statement
defines the business in terms of
satisfying basic customer needs

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 Defining a Market-Oriented Mission

• It starts with the questions:

– What is our business?
– Who is the customer?
– What do customers value?
– What should our business be?
• It should be customer-need oriented
• For example, Nokia’s mission is not to simply sell mobile phones but
its mission is to “connect people”
• eBay’s mission is not to hold online auctions and trading but its
mission is “to provide a global trading platform where practically
anyone can trade practically anything”
• Mission statements should be meaningful and specific yet motivating.
• they should emphasize the company’s strengths in marketplace.

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 Defining a Market-Oriented Mission

• Mission should not be stated as making profit or sales – as

profits are only a reward for creating value for the customer.

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 Defining a Market-Oriented Mission

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 Companywide Strategic Planning
Designing the Business Portfolio

The business portfolio is the collection

of businesses and products that make
up the company
Portfolio analysis is a major activity in
strategic planning whereby
management evaluates the products
and businesses that make up the
company
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 Business portfolio involve two steps:

1.Analyzing the current business portfolio.

2.Developing strategies for growth and

downsizing

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 Analyzing the Current Business
Portfolio
 Portfolio analysis is a major activity in strategic planning
whereby management evaluates the products and businesses
that make up the company.
 Strategic business unit (SBU) is a unit of the company that
has a separate mission and objectives that can be planned
separately from other company businesses.

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Chapter 2- slide 10
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 Companywide Strategic Planning
Analyzing the Current Business Portfolio

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Chapter 2- slide 11
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 The Boston Consulting Group
Stars are high-growth,
Approach
high-share businesses or
products. They often need
They require a lot of
cash to hold their
share, let alone
heavy investments to
increase it.
finance their rapid growth.

 A company classifies all its SBUs

according to the growth-share matrix.
The growth-share matrix defines four
types of SBU’s:

These established and They may generate

enough cash to maintain
successful SBUs need
themselves but do not
less investment to hold promise to be large
their market share. sources of cash.
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 Boston Consulting Group Approach

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 The Boston Consulting Group
Approach
 It can pursue one of four strategies for
each SBU.

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 Companywide Strategic Planning
Problems with Matrix Approaches

• Difficulty in defining SBUs and

measuring market share and growth
• Time consuming
• Expensive
• Focus on current businesses, not future
planning

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Chapter 2- slide 15
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 Companywide Strategic Planning
Developing Strategies for Growth and Downsizing

Product/market expansion grid is a tool

for identifying company growth
opportunities through market
penetration, market development,
product development, or diversification

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 Developing Strategies for Growth and
Downsizing
Product/Market Expansion Grid

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Chapter 2- slide 17
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 Developing Strategies for
Growth and Downsizing

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Chapter 2- slide 18
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 Companywide Strategic Planning
Developing Strategies
for Growth and Downsizing

Downsizing is the reduction of the

business portfolio by eliminating
products or business units that are not
profitable or that no longer fit the
company’s overall strategy

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Chapter 2- slide 19
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