Strategic Marketing: Corporate Mission and Strategy

Podcast Beta

Play an AI-generated podcast conversation about this lesson

Questions and Answers

What is the focus of a market-oriented approach?

Customer and benefit (correct)

Sales and revenue

Competitor and market share

Industry and product

What is the goal of Google's mission?

To make information universally accessible and useful (correct)

To create a place where America still works as it's supposed to

To provide a platform for fantasy and competition

To organize the world's information

What are the components of an objective in marketing strategy?

Performance dimension, measure, and target level

Performance dimension, measure, and time frame (correct)

Measure, target level, and time frame

Performance dimension, target level, and time frame

What is the primary purpose of a business portfolio?

To manage the collection of businesses and products Signup and view all the answers

Which of the following is a possible measure of innovativeness in marketing strategy?

% sales from new products introduced in last 5 years Signup and view all the answers

What is the significance of a time frame in setting marketing objectives?

It helps in evaluating progress Signup and view all the answers

What is the primary purpose of a corporate strategy?

To provide direction on the company's mission and growth policies Signup and view all the answers

What is the primary benefit of a good mission statement?

It motivates employees and guides the organization's purpose Signup and view all the answers

What is the main focus of a business unit strategy?

Allocating resources to specific business units Signup and view all the answers

What is the primary goal of a marketing strategy?

To provide direction on the company's marketing tactics Signup and view all the answers

What is the main focus of functional planning?

Providing direction on the company's marketing and other functional tactics Signup and view all the answers

What is the Business Domain Choice framework used for?

To identify growth opportunities and define the company's business domain Signup and view all the answers

What type of businesses are associated with negative cash flow?

Low-share businesses in low-growth markets Signup and view all the answers

What is the purpose of the 'Harvest' strategy for an SBU?

To milk short-term cash flow Signup and view all the answers

What is the limitation of the BCG Matrix in terms of planning?

It provides little advice for future planning Signup and view all the answers

What is the 'Build' strategy for an SBU?

To invest more to increase market share Signup and view all the answers

What is the characteristic of a 'sick' portfolio in the BCG Matrix?

Low-share businesses in low-growth markets Signup and view all the answers

Which of the following is an example of a 'Hold' strategy in Unilever's portfolio?

Marmite and Hellmann's Signup and view all the answers

What is a limitation of the BCG model?

It assumes that all business units are independent of one another except for the flow of cash. Signup and view all the answers

What is the primary objective of market penetration strategies?

To increase market share. Signup and view all the answers

What type of diversification involves expanding into unrelated businesses?

Conglomerate diversification Signup and view all the answers

What is the primary goal of product development strategies?

To increase the number of products offered. Signup and view all the answers

What is the primary benefit of market penetration strategies?

Low risk, low return. Signup and view all the answers

What is the focus of market development strategies?

Expanding markets for existing products. Signup and view all the answers

What is a characteristic of a Strategic Business Unit (SBU)?

It has its own set of competitors Signup and view all the answers

What is an ideal characteristic of a Strategic Business Unit (SBU)?

A homogeneous set of markets to serve with limited number of related technologies Signup and view all the answers

What is the responsibility of leaders in a Strategic Business Unit (SBU)?

Strategic planning, profitability, and efficiency Signup and view all the answers

What is the purpose of a mission statement?

To serve as a guiding principle for the company's actions Signup and view all the answers

What is a characteristic of a well-defined mission statement?

It is unique to the company and its product-markets Signup and view all the answers

Study Notes

Low-Growth Markets and Business Unit Strategies

Low-share businesses in low-growth markets have low or declining market share and are associated with negative cash flow.
Strategies that can be followed for each SBU:
- Build: Invest more
- Hold: Invest enough to hold current position
- Harvest: Milking short-term cash flow
- Divest: Phasing out

Helps to analyze a company's portfolio of businesses
Provides a framework for evaluating the strength of each business unit
Examples of companies that have used the BCG Matrix: Unilever

Limitations of the BCG Matrix

Difficult to implement, especially when defining SBUs and measuring market share and growth
Classifies current businesses but provides little advice for future planning

Corporate Strategy

Hierarchical nature of strategy: Corporate, Business Unit, and Functional
Frameworks for corporate strategy:
- Business Domain Choice: What is our business? What will be our business? What should be our business? What can be our business?
- Growth Opportunity Matrix: Evaluates business units based on market growth rate and relative market share

Corporate Mission

Statement of the organization's purpose
Serves as a guide for what the organization wants to accomplish
Characteristics of a good mission statement:
- Market-oriented rather than product-oriented
- Realistic and specific
- Fits the environment, based on company competencies
- Motivating for employees

Examples of Mission Statements

Google: To organize the world's information and make it universally accessible and useful
Southwest Airlines: To provide a low-cost, high-quality service to customers

Goals and Objectives

Components of an objective:
- A performance dimension
- A measure or index for evaluating progress
- A target level to be achieved
- A time frame within which the target is to be accomplished
Examples of performance criteria:
- Growth
- Competitive strength
- Innovativeness

Business Portfolio

The collection of businesses and products that make up the company
Limitations of the BCG Matrix:
- Too simplistic
- May be risky to take immediate decisions/actions
- Assumes business units are independent of one another except for the flow of cash

Growth Opportunity Matrix

Evaluates business units based on market growth rate and relative market share
Strategies for growth:
- Market penetration
- Market development
- Product development
- Diversification

Strategic Business Units (SBUs)

A single business or collection of related businesses
Characteristics of SBUs:
- A homogeneous set of markets to serve with limited number of related technologies
- A unique set of product-markets
- Responsibility for their own profitability

Exercise: Identifying SBUs

Example: Which SBUs would you identify in a company?
Why?
What mission would you write for each SBU?

Studying That Suits You

Use AI to generate personalized quizzes and flashcards to suit your learning preferences.

Description

Test your understanding of corporate strategy and its hierarchical nature, including corporate mission, business unit strategies, and functional decisions. Learn how to analyze a company's scope and resource deployments across its divisions or businesses.