Strategic Planning in Business
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Questions and Answers

What is the purpose of strategic planning?

Find ways to use company strengths to take advantage of opportunities

What are the components of strategic planning?

  • Analysis of strengths & weaknesses (correct)
  • Identification of opportunities & threats (correct)
  • Corporate and business unit strategies (correct)
  • Organizational goals and mission (correct)

    • SWOT analysis evaluates a company's internal factors only.

    False

    SWOT analysis stands for Strengths, Weaknesses, Opportunities, and __________.

    <p>Threats</p> Signup and view all the answers

    Explain Market Development in Ansoff's Product/Market Matrix.

    <p>Marketing existing product range in a new market</p> Signup and view all the answers

    What is the main focus of the Balanced Scorecard's Learning and Growth perspective?

    <p>Employee training and development</p> Signup and view all the answers

    Which option on Bowman’s Strategy Clock involves Feasibility only in a monopoly situation?

    <p>Option 7 – Increased Price/Low Values</p> Signup and view all the answers

    Core competencies are resources that give a company a competitive ________ over its competition.

    <p>advantage</p> Signup and view all the answers

    Match the following objectives and measures to the correct categories on the Balanced Scorecard: Objective: 1.To be the cost leader in its market by 2010 2.To reduce customer churn by 75% within 12 months 3.To lead the market in speedy delivery by 2014 4.To build a sports and social club by March 2014 5.To increase profitability by 20% by 2015 6.To produce products that are right first time within 3 months 7.To train and develop all team leaders by 2016 8.To achieve 99% customer satisfaction within 5 years

    Measures: a.Average time taken for customers to receive complete orders b.Customer retention rates c.Return On Capital Employed (ROCE) d.Employee satisfaction rates e.Statistical process control f.Employee retention rates g.Customer feedback or complaints h.Unit cost

    <p>Objective 1 = h Objective 2 = b Objective 3 = a Objective 4 = d Objective 5 = c Objective 6 = e Objective 7 = f Objective 8 = g</p> Signup and view all the answers

    What tool helps marketing managers decide which marketing strategies and tactics to use by analyzing where the company is and where it wants to be?

    <p>Gap Analysis</p> Signup and view all the answers

    What is the next step in using Gap Analysis?

    <p>Close the gap</p> Signup and view all the answers

    Which tool can be used to bridge the gap with strategies?

    <p>Ansoff’s matrix</p> Signup and view all the answers

    McKinsey/General Electric Business Screen Matrix uses market attractiveness instead of market growth as a factor.

    <p>True</p> Signup and view all the answers

    ___________ are some of the factors affecting market attractiveness.

    <p>Market Size, Market Growth, Market Profitability, Pricing Trends, Competitive Intensity/Rivalry, Industry Overall Risk of Returns, Opportunity to Differentiate Products &amp; Services, Segmentation, Distribution structure</p> Signup and view all the answers

    Match the following resources affecting competitive strength with their descriptions:

    <p>Strength of Assets and Competencies = Factors like relative brand strength and market share Market Share = Indicator of market presence and reach Customer Loyalty = Measure of customer retention and repeat business Distribution Strength = Ability to effectively reach and serve customers through distribution channels Record of Technological or Other Innovation = History of advancements in technology or other areas Access to Financial &amp; Other Investment Resources = Availability of funds and capital for growth and development</p> Signup and view all the answers

    Study Notes

    Here are the study notes:

    Strategic Planning

    • Identifying and analyzing a target market to take advantage of opportunities
    • Developing a marketing mix to meet the needs of the market

    Components of Strategic Planning

    • Analysis of the organization's strengths and weaknesses
    • Identification of opportunities and threats
    • Organizational goals and mission
    • Corporate and business unit strategies
    • Functional strategies (marketing, production, finance, human resources)

    Marketing Objectives and Goals

    • Sales volume
    • Profitability
    • Market share
    • Pricing
    • Distribution
    • Advertising
    • Employee training

    Core Business Processes

    • Market sensing process (gathering market intelligence)
    • New offering realization process (research, development, and launch of new offerings)
    • Customer acquisition process (defining target markets and prospecting for new customers)
    • Customer relationship management process (building relationships with customers)
    • Fulfillment management process (meeting and fulfilling orders)

    Holistic Marketing Framework

    • Customer focus
    • Core competencies
    • Collaborative network
    • Value creation, delivery, and communication
    • Customer relationships and benefits
    • Business domain
    • Partners and alliances

    The Strategic Planning, Implementation, and Control Processes

    • Planning (setting goals and objectives)
    • Implementing (organizing and allocating resources)
    • Controlling (measuring and correcting)

    Business Unit Strategic Planning

    • Analyzing the external environment (opportunities and threats)
    • Analyzing the internal environment (strengths and weaknesses)
    • Establishing mission and goals
    • Formulating strategy
    • Implementing and controlling

    Portfolio Analysis Methods

    • SWOT analysis (strengths, weaknesses, opportunities, and threats)
    • Boston Consulting Group approach (dogs, cash cows, question marks, and stars)
    • Arthur D. Little strategic condition matrix
    • Ansoff's product/market matrix
    • Balanced scorecard
    • Bowman's strategy clock
    • Core competencies
    • Gap analysis
    • McKinsey/General Electric business screen matrix
    • McKinsey growth pyramid
    • Generic strategies
    • Shell directional policy matrix
    • Value chain analysis### Core Competencies
    • Core competencies are a combination of circumstances and timing that allow a company to reach a target market
    • Core competencies are matched to opportunities, providing a strategic window or temporary period of optimal fit between key market requirements and a company's capabilities
    • A core competence should be unique, something others wish they had, and central to a business's operations
    • A competence that is not exceptional in some way is not a core competence, as it won't differentiate the business from others

    Three Tests of Core Competencies

    • Provide potential access to a wide variety of markets
    • Make a significant contribution to the perceived customer benefits of the end product
    • Are difficult for competitors to imitate

    Core Competencies and Resources

    • Resources that are standardized or easily available won't enable a business to achieve a competitive advantage
    • Core competencies can become core rigidities, causing organizational inertia and preventing companies from responding to environmental changes

    Gap Analysis

    • A tool to help marketing managers decide which marketing strategies and tactics to use
    • Answers two questions: "Where are we now?" and "Where do we want to be?"
    • The difference between the two is the gap
    • Uses Ansoff's matrix to bridge the gap using strategies

    McKinsey Growth Pyramid

    • Similar to Ansoff's matrix, but looks at growth strategy from a different perspective
    • Growth strategy should be based on operational skills, privileged assets, growth skills, and special relationships
    • Ways of achieving growth include:
      • Increasing sales to existing customers
      • Finding new products customers might buy
      • Taking a risk by developing and marketing new products
      • New delivery approaches using new or emerging channels of distribution
      • Expanding to new geographical areas
      • Acquiring growth through acquisition of healthy competitors
      • Vertical integration
      • Looking into other industries where competencies can be used

    Value Chain Analysis

    • Tool developed by Michael Porter to examine various activities of a company and how they interact to provide a source of competitive advantage
    • Break down a market or organization into key activities under major headings
    • Assess the potential for adding value through cost advantage or differentiation
    • Identify current activities where a business looks to be at a competitive advantage
    • Determine strategies built around focused activities where competitive advantage can be sustained
    • Identifies resources and capabilities that can add value

    Value Chain Analysis Activities

    • Primary Activities:
      • Inbound Logistics
      • Operations
      • Outbound Logistics
      • Marketing and Sales
      • Service
    • Support Activities:
      • Procurement
      • Technological Development
      • Human Resource Management
      • Firm Infrastructure

    Value Chain Analysis Use

    • Used to observe a company's activities and how they interact with each other
    • Tool for observing how the company's activities and their interaction affect each activity's cost and performance
    • By performing these activities better or at a lower cost than competitors, a company gains competitive advantage

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    Description

    This quiz covers the purpose and steps of strategic planning in business, including identifying market opportunities and developing a marketing mix to meet target market needs.

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