UNIT 3 Strategic Planning for Competitive Advantage PDF

UNIT 3 Strategic Planning for Competitive Advantage Adapted for the fifth Canadian edition by Janice M. Shearer, Consultant Learning Outcomes 3-1 Explain the importance of strategic planning and a business mission statement 3-2 Describe how to conduct business portfolio analysis 3-3 Summarize ho...

UNIT 3 Strategic Planning for Competitive Advantage Adapted for the fifth Canadian edition by Janice M. Shearer, Consultant Learning Outcomes 3-1 Explain the importance of strategic planning and a business mission statement 3-2 Describe how to conduct business portfolio analysis 3-3 Summarize how business planning is used for competitive advantage Learning Outcomes 3-4 Discuss marketing planning, identification of target markets, and the elements in the marketing mix 3-5 Explain why implementation, evaluation, and control of the marketing plan are necessary 3-6 Identify several techniques that help make strategic planning effective IMPORTANCE OF STRATEGIC PLANNING Leadership and managerial process of: • Establishing organizational objectives/goals • Determining how to achieve them - Internal resources - Marketing environment • STRATEGIC PLAN FOR 2020 - 2025 EXAMPLE: NORTHERN COLLEGE THE IMPORTANCE OF STRATEGIC PLANNING: STRATEGIC PLANNING; 3 Levels Corporate Business Marketing • Sets the direction and scope—mission statement, business opportunities, and resource allocation • Takes place at the strategic business unit (SBU) level • Goal is to gain a competitive advantage • Target market and marketing mix activities EXAMPLE: STRATEGIC BUSINESS UNITS: STRATEGIC VERSUS TACTICAL DECISIONS Strategic Tactical • Made at all three levels • Wider in scope • Longer in orientation • Affect long-run course, allocation of resources, and financial success • Made at the operational or marketing level • Narrow in scope • Short-term • Limited impact of long-run profitability • Directed from strategic decisions made at the corporate level EXAMPLE: DEVELOPING STRATEGIC MARKETING • L.O. 3-1 CORPORATE PLANNING: DEFINING THE BUSINESS MISSION STATEMENT • What value do we provide for customers? • Benefits sought? • Environmental conditions? • Creates boundaries for all decisions • Business mission should focus on the market or markets attempting to be served rather than on the goods and services L.O. 3-1 MISSION STATEMENT: THE IMPORTANCE A good business mission statement defines your organization in a nutshell. It boils down the reason for your existence and delivers it to the public in a way that is easy to digest. This includes: • What products/services you provide • For whom • Where • How you make it possible • The ultimate value/positive outcome of those products/services. EXAMPLE: DAVID’S TEA An inspiring mission statement example: • This mission statement from Davids Tea is packed with interesting words and phrases that convey feeling… STRATEGIC DECISIONS: DESIGNING THE BUSINESS PORTFOLIO • Begins with a • Strengths • Weaknesses • Opportunities • Threats SWOT ANALYSIS SWOT stands for Strengths, Weaknesses, Opportunities & Threats It is a tool that can help you to analyze what your company does best now, and to devise a successful strategy for the future. • Strengths and weaknesses are internal to your company—things that you have some control over and can change. Examples include who is on your team, your patents and intellectual property, and your location. • Opportunities and threats are external—things that are going on outside your company, in the larger market. You can take advantage of opportunities and protect against threats, but you can’t change them. Examples include competitors, prices of raw materials, and customer shopping trends. Source: Liveplan.com STRENGTH EXAMPLES • • • • • • • • • • • Attracting many new customers High quality products Clearly defined and successful marketing strategies Strong relationships with online influencers Easy-to-use apps Engaging website High ratings on review websites Lots of social media likes/followers Well regarded in the industry Significant barriers to entry to the market Weak existing competitors Sources https://www.marketingstudyguide.com https://ctb.ku.edu https://www.investopedia.com/terms • • • • • • • • • • Strong retailer relationships Strong supplier relationships Online advertising expertise Strong social media engagement Success in creating engaging online content Successful online sales channel High brand awareness Perceived as the market leader Positive attitudes to the brand Seen as having strong corporate social responsibility WEAKNESSES EXAMPLES • • • • • • • • • • • • No real sense of the target consumer Limited product range Low quality products Awkward locations Under-performing sales teams Cannot access emerging market segments No strong relationships with influencers Operating In declining markets Poor market knowledge Low barriers to entry to the market Many emerging new entrants Strong existing competitors Sources https://www.marketingstudyguide.com https://ctb.ku.edu https://www.investopedia.com/terms • • • • • • • • • • • • Small sales team Uncertain marketing strategy Limited market appeal Low brand awareness Many negative attitudes to the brand Limited online advertising experience Limited social media success No company app Poor ratings on review websites Poor social media engagement Relatively new to digital marketing Static website OPPORTUNITY EXAMPLES • • • • • • • • • • • • • Improve the overall customer experience Recruit more high quality staff Attract new customers through special offers Build stronger customer relationships Grow market share to become the market leader Develop break-through new products Become a first-mover in an emerging markets Build our IT/software expertise Create appropriate outsourcing partnerships Data mining of our customer database Develop propriety software Develop strategic alliances Develop a customer relationship culture Source https://www.marketingstudyguide.com • • • • • • • • • • • • • • Raise capital funding to invest in new ventures Work to generate cost efficiencies Develop and implement a loyalty program Grow customer loyalty/retention Improve offering to increase customer satisfaction scores Develop new products for international markets Develop an innovation culture Further develop our sales/service team Target niche markets Build relationships with influencers Expand internationally Expand our number of stores/outlets Develop a new brand Improve attitudes towards our brand THREATS EXAMPLES • • • • • • • • • • Being too slow to adapt to change Inexperienced staff Poor service culture A disconnected, and less loyal, customer base Changes in consumer spending patterns Weakening customer relationships Weakening customer satisfaction Decline stage of the product life cycle Failed brand extensions Lost of unique product features Sources https://www.marketingstudyguide.com https://ctb.ku.edu https://www.investopedia.com/terms • • • • • • • • • • Being perceived as slow and outdated Brand damage due to “viral” videos Brand damage due to media stories Negative attitudes to the brand Being challenged by well-funded start-ups Being outperformed by data-driven competitors Disruptive new competitors Fast growing competitors Unpredictable trends and disruption Loss of a key supplier EXAMPLE: TESLA STRATEGIC ALTERNATIVES: LINKING SWOT TO GROWTH STRATEGIES Poll A SWOT analysis can lead to business opportunities that organizations may choose to pursue. These opportunities can be categorized under which four areas? A. Market penetration, market segmentation, product planning, and diversification B. Market penetration, market development, product planning, and product growth C. Product development, diversification, market penetration, and market development D. Market penetration, production planning, product development, and diversification L.O. 3-1 Business Planning for Competitive Advantage BUSINESS STRATEGY FOR COMPETITIVE ADVANTAGE How to implement and execute the strategy for growth for the Business Strategy • Complete a SWOT analysis to - achieve a sustainable competitive advantage - identify core competencies COMPETITIVE ADVANTAGE Definition: The set of unique features of a company and its products that are perceived by the target market as significant and superior to the competition: • Cost • Product/service differentiation • Niche strategies COST COMPETITIVE ADVANTAGE GOVERNMENT SUBSIDIES & FUNDING OPPORTUNTIES IN TIMMINS • Timmins Economic Development Corporation • City of Timmins • Northern Ontario Heritage Fund Corporation PRODUCT DIFFERENTIATION COMPETITIVE ADVANTAGE Unique benefit Of value to consumer Product differentiation NICHE COMPETITIVE ADVANTAGE Serving the needs of a single segment that has good growth potential but is not crucial to the success of the major competitors • Geographic niche • Product niche WHAT IS A NICHE MARKET? HOW TO START A NICHE MARKET • Reflect on your passions and interests. • Identify the problems and needs of your customers. • Research the competition. • Define your niche and its profitability. • Test your product or service. EXAMPLE: BIKE POLO This Photo by Unknown Author is licensed under CC BY-NC BIKE POLO: SHARK TANK BUILDING A SUSTAINABLE COMPETITIVE ADVANTAGE • An advantage that • cannot be copied • can be sustained • Sources of tomorrow’s competitive advantages • Skills and assets of the organization • Marketing leaders need to continually focus on these skills and assets to create and sustain the competitive advantage. Marketing Planning SETTING MARKETING PLAN OBJECTIVES Specific Timebound Realistic Measurable Achievable SMART Objectives Exercise – Judge for Yourself Target Market Strategy • Begins with an MOA • Estimation of size and sales potential of segments that are of interest • Then a decision regarding which/how many segments to target Entire market Single segment Multiple segments Target market(s) The Marketing Mix L.O. 3-4 Product Place Promotion Price Product Strategies • Heart of the marketing mix • The product offering and product strategy • Physical product or a service • • • • • • • • L.O. 3-4 Physical unit Package Warranty After-sale service Brand name Image Value And … Pricing Strategies • What a buyer must give up in the exchange • “Value” in the mind of the consumer • Quickest element to change • Can be an important competitive weapon L.O. 3-4 Place Strategies • Making the products available when and where the customer wants them • Physical distribution • Storing • Transporting L.O. 3-4 Promotion Strategies • Introduce, facilitate, or sustain conversation and community between company and customer. • Integrated marketing communications • Advertising • Direct marketing • Public relations • Sales promotion • Personal selling • Digital marketing L.O. 3-4 Poll The competition and achieving a differential advantage are the key criteria to consider when creating a marketing mix. A. True B. False L.O. 3-4 Marketing Plan Implementation, Evaluation, and Control EXHIBIT 3.1 ELEMENTS OF A MARKETING PLAN L.O. 3-5 Implementation • The process that turns the plan into action—“doing what you said you were going to do” • Can be a source of failure L.O. 3-5 Evaluation and Control Evaluation: Gauging achievement of objectives L.O. 3-5 Control: Informal Marketing and formal controls will create Audit efficiency. Marketing Audit Characteristics Poll A very useful tool for marketing managers to use when attempting to evaluate the effectiveness of the marketing plan is a A. consumer research study B. marketing audit C. financial review D. conversations with key members in the distribution channel L.O. 3-5 Effective Strategic Planning Continual attention Management commitment Creativity Effective Strategic Planning L.O. 3-6