Firms can normally trace their competitive position to one of three factors: 64 Superior skills (e.g. Coordination of individual specialists, created through the interplay of investment in training and professional development, work and learning) Superior resources (e.g. Patents, trade-mark protection, specialized physical assets and relationships with suppliers and distribution infrastructure.) Superior position (the products or services offered, the market segments served, and the extent to which the product-market can be isolated from direct competition.) It is essential that the internal analysis provide. For this reason, some companies engage external consultants to provide an independent assessment of the firms capabilities and resources. Porter and the positioning school: approach to strategy formulation edit further information: Porter's generic strategies Porter's Three generic Strategies In 1980, michael Porter developed an approach to strategy formulation that proved to be extremely popular with both scholars and practitioners. The approach became known as the positioning school because of its emphasis on locating a defensible competitive position within an industry or sector. In this approach, strategy formulation consists of three key strands of thinking: analysis of the five forces to determine the sources of competitive advantage; the selection of one of three possible positions which leverage the advantage and the value chain to implement the strategy.
12 Truly Inspiring Company
It may need to build capability if it wishes to leverage opportunities in areas of weakness. An area of weakness that is matched with an external threat represents a vulnerability, and the firm may need to develop contingency plans. 56 developing the vision and mission plan edit The vision and mission address the second central question, 'where are we going?' At the conclusion of the research and analysis stage, the firm will typically review its vision statement, mission statement and, if necessary, devise a new. At this stage, the firm will also devise a generic competitive strategy as the basis for maintaining a sustainable competitive advantage for the forthcoming planning period. A vision statement is a realistic, long term future scenario for the organisation. (Vision statements should not be confused with slogans or paper mottos.) 57 a vision statement is designed to present a realistic long-term future scenario for the organisation. It is a "clearly articulated statement of the business scope." A strong vision statement typically includes the following: 58 Competitive scope market scope geographic scope vertical scope some scholars point out the market visioning is a skill or competency that encapsulates the planners' capacity "to. 59 A mission statement is a clear and concise statement of the organisations reason for being and its scope of operations, 60 while the generic strategy outlines how the company intends to achieve both its vision and mission. 61 Mission statements should include detailed information and must be more than a simple motherhood statement. 62 A mission statement typically includes the following: 63 This mission statement might be described as a "motherhood statement" because it lacks sufficient detail to be meaningful Specification of target customers Identification of principal products or services offered Specification of the geographic scope of operations.
T echnological: Innovation, technological developments or breakthroughs that create opportunities for new products, improved production processes or new ways of transacting business. New materials, new ingredients, new machinery, new packaging solutions, new software and new intermediaries. When carrying out a pdf pest analysis, planners and analysts may consider the operating environment at three levels, namely the supranational ; the national and subnational or local level. As businesses become more globalized, they may need to pay greater attention to the supranational level. 54 Brief description of swot analysis edit a swot analysis, with its four elements in a 22 matrix. In addition to the pest analysis, firms carry out a strengths, weakness, Opportunities and Threats (swot) analysis. A swot analysis identifies: 55 Strengths: distinctive capabilities, competencies, skills or assets that provide a business or project with an advantage over potential rivals; internal factors that are favourable to achieving company objectives weaknesses: internal deficiencies that place the business or project at a disadvantage. Internal factors that are unfavourable to achieving company objectives Opportunities: elements in the environment that the business or project could exploit to its advantage Threats: elements in the environment that could erode the firm's market position; external factors that prevent or hinder an entity from. Typically the firm will attempt to leverage those opportunities that can be matched with internal strengths; that is to say the firm has a capability in any area where strengths are matched with external opportunities.
50 This analysis is called pest ; an acronym for p olitical, e conomic, s ocial and t echnological. A number of variants of the pest analysis can be identified in literature, including: pestle analysis (Political, Economic, social, technological, legal and Environmental steeple (adds ethics steepled (adds demographics) and steer (adds regulatory). 51 gender The aim of the pest analysis is to identify opportunities and threats in the wider operating environment. Firms try to leverage opportunities while trying to buffer themselves against potential threats. Basically, the pest analysis guides strategic decision-making. 52 The main elements of the pest analysis are: 53 p olitical: political interventions with the potential to disrupt or enhance trading conditions. Government statutes, policies, funding or subsidies, support for specific industries, trade agreements, tax rates and fiscal policy. E conomic: economic factors with the potential to affect profitability and the prices that can be charged, such as, economic trends, inflation, exchange rates, seasonality and economic cycles, consumer confidence, consumer purchasing power and discretionary incomes. S ocial: social factors that affect demand for products and services, consumer attitudes, tastes and preferences like demographics, social influencers, role models, shopping habits.
46 Other scholars use the terms realized strategy versus intended strategy to refer to the same concepts. 47 This type of analysis indicates whether an organisation has strayed from its desired path during the planning period. The presence of a large gap may indicate the organisation has become stuck in the middle ; a recipe for strategic mediocrity and potential failure. Brief description of Category/Brand development Index edit The category/brand development index is a method used to assess the sales potential for a region or market and identify market segments that can be developed (i.e. High cdi and high bdi). In addition, it may be used to identify markets where the category or brand is under-performing and may signal underlying marketing problems such as poor distribution (i.e. High cdi and low bdi). Bdi and cdi are calculated as follows: 48 bdi (Brand Sales in Market A/ Population in Market A) X 100 cdi (Category sales in Market/ Population in Market A) X 100 Brief description of pest analysis edit pest analysis: variables that may be considered. 49 An understanding of the external operating environment, including political, economic, social and technological which includes demographic and cultural aspects, is necessary for the identification of business opportunities and threats.
Management tools, mission and
The 'corporation' element refers to a detailed analysis of the company's internal capabilities and its readiness to leverage market-based opportunities or its vulnerability to external threats. 13 The bcg matrix is just one of the many analytical techniques used by strategic analysts as a means of evaluating the performance of the firm's current stable of brands Perceptual mapping assists analysts to evaluate the competitive performance of brands A product evolutionary cycle. 14 Strategic planners use summary a variety of research tools and analytical techniques, depending on the environment complexity and the firm's goals. Fleitcher and Bensoussan, for instance, have identified some 200 qualitative and quantitative analytical techniques regularly used by strategic analysts 15 while a recent publication suggests that 72 techniques are essential. 16 no optimal technique can be identified as useful across all situations or problems.
Determining which technique to use in any given situation rests with the skill of the analyst. The choice of tool depends on a variety of factors including: data availability; the nature of the marketing problem; the objective or purpose, the analysts skill level as well as other constraints such as time or motivation. 17 The most commonly used tools and techniques include: 16 Research methods Analytical techniques Brief description of gap analysis edit gap analysis is a type of higher order analysis that seeks to identify the difference between the organisation's current strategy and its desired strategy. This difference is sometimes known as the strategic gap. Mintzberg identifies two types of strategy namely deliberate strategy and inadvertent strategy. The deliberate strategy represents the firm's strategic intent or its desired path while the inadvertent strategy represents the path that the firm may have followed as it adjusted to environmental, competitive and market changes.
Instead, it is concerned with identifying the business opportunities that are likely to be successful and evaluates the firm's capacity to leverage such opportunities. It seeks to identify the strategic gap ; that is the difference between where a firm is currently situated (the strategic reality or inadvertent strategy ) and where it should be situated for sustainable, long-term growth (the strategic intent or deliberate strategy ). 10 Strategic planning seeks to address three deceptively simple questions, specifically: 11 * Where are we now? (Situation analysis) * What business should we be in? (Vision and mission) * How should we get there? (Strategies, plans, goals and objectives) A fourth question may be added to the list, namely 'how do we know when we got there?' due to increasing need for accountability, many marketing organisations use a variety of marketing metrics to track strategic performance, allowing for corrective.
On the surface, strategic planning seeks to address three simple questions, however, the research and analysis involved in strategic planning is very sophisticated and requires a great deal of skill and judgement. Strategic analysis: tools and techniques edit Strategic analysis is designed to address the first strategic question, "Where are we now?" 12 Traditional market research is less useful for strategic marketing because the analyst is not seeking insights about customer attitudes and preferences. Instead strategic analysts are seeking insights about the firm's operating environment with a view to identifying possible future scenarios, opportunities and threats. Strategic planning focuses on the three 3Cs, namely: Customer, corporation and Competitors. 13 A detailed analysis of each factor is key to the success of strategy formulation. The 'competitors' element refers to an analysis of the strengths of the business relative to close rivals, and a consideration of competitive threats that might impinge on the business' ability to move in certain directions. 13 The 'customer' element refers to an analysis of any possible changes in customer preferences that potentially give rise to new business opportunities.
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Gale key ideas: Each business is unique and that there can be no formula for achieving competitive advantage; firms should adopt a flexible planning and review process that aims to cope with strategic surprises and rapidly developing threats; management's focus is on how to deliver. Resource based view (RBV) (also known as resource-advantage theory ) Further information: Resource-based view Date: From mid 1990s key thinkers: jay. Day, gary hamel, shelby. Prahalad key ideas: The firm's resources are financial, legal, human, organisational, informational and relational; resources are heterogeneous and imperfectly mobile, management's key task is to understand and organise resources for sustainable competitive advantage. 8 Strategic marketing planning: An overview edit The strategic gap Marketing strategy involves mapping out the company's direction for the forthcoming planning period, whether that be three, five or ten years. It involves undertaking a 360 review of the firm and its operating environment with a view to identifying new business opportunities that the firm could potentially leverage for competitive advantage. Strategic planning may apple also reveal market threats that the firm may need to consider for long-term sustainability. 9 Strategic planning makes no assumptions about the firm continuing to offer the same products to the same customers into the future.
Strategic marketing concerns the choice of policies aiming at improving the competitive position of the firm, taking account of challenges and opportunities proposed by the competitive environment. On the other hand, managerial marketing is focused on the implementation of specific targets." 3, marketing strategy is about "lofty visions translated into less lofty and practical goals while marketing management is where we start to get our hands dirty and make plans for things. Brief history of strategic marketing edit, marketing scholars have suggested that strategic marketing arose in the late 1970s and its origins can be understood in terms of a distinct evolutionary path: 5, budgeting Control (also known as scientific management further information: Scientific management Date: From. Gantt, harrington Emerson key ideas: Emphasis on quantification and scientific modelling, reduce work to smallest possible units and assign work to specialists, exercise control through rigid managerial hierarchies, standardise inputs to reduce variation, defects and control costs, use quantitative forecasting methods to predict any changes. 6 Long Range Planning Further information: Long-range planning Date: From 1950s key thinkers: Herbert. Simon key ideas: Managerial focus was to anticipate growth and manage operations in an increasingly complex business world. 7 business Strategic Planning (also known as corporate planning ) Further information: Strategic management Date: From the 1960s key thinkers: Michael Porter key ideas: Organisations must find the right fit within an industry structure; advantage derives from industry concentration and market power; firms should strive. Strategic Marketing Management Date: from late 1970s key thinkers:.
competitors. Perfect strategies are not called for. Performance relative to competitors. (Kenichi Ohmae, the mind of the Strategist, 1982,. 37)Strategy formulation is built on "the match between organisational resources and skills and environmental opportunities and risks it faces and the purposes it wishes to accomplish." (Dan Schendel and Charles. Hofer, Strategy formulation: Analytical Concepts, south-Western, 1978,. 11 marketing management versus marketing strategy edit. The distinction between strategic and managerial marketing is used to distinguish "two phases having different goals and based on different conceptual tools.
In attempting to answer these questions, strategic planners require sophisticated skills in both research and analysis. Contents, definitions of marketing strategy edit, scholars continue to debate the precise meaning of marketing strategy. Consequently, the literature offers many different definitions. On close examination, however, these definitions appear to centre around the notion database that strategy refers to a broad statement of what is to be achieved. Marketing Strategy is: "The marketing strategy lays out target markets and the value proposition that will be offered based on an analysis of the best market opportunities." (Philip Kotler kevin Keller, marketing Management, pearson, 14th Edition)An over-riding directional concept that sets out the planned path. (david aaker and Michael. Mills, Strategic Market Management, 2001,. 11 Essentially a formula for how a business is going to compete, what its goals should be and what policies will be needed to carry out these goals." (Michael Porter, competitive strategy: Techniques for Analyzing Industries and Competitors, ny, free press, 1980 The pattern.
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Marketing strategy is a long-term, forward-looking approach to planning with the fundamental goal achieving a sustainable competitive advantage. 1, strategic planning involves an analysis of the company's strategic initial situation prior to the formulation, evaluation and selection of market-oriented competitive position that contributes to the company's goals and marketing objectives. 2, strategic marketing, as a disinct field of study emerged in the 1970s, and built on strategic management that preceded. Marketing strategy highlights the role of marketing as a link between the organisation and its customers. At its most basic level, strategic marketing addresses three deceptively simple questions: (1) Where biography are we now? (2) Where are we going? And (3) How are we going to get there?