MarketingManagement.pdf

46 CHAPTER3WINNINGMARKETSTHROUGHSTRATEGICPLANNING, IMPLEMENTATION,ANDCONTROL

Of course, companies must not only develop new businesses, but also prune, har-

vest, or divest tired, old businesses in order to release needed resources and reduce

costs. Weak businesses require a disproportionate amount of managerial attention;

managers should therefore focus on growth opportunities rather than wasting energy

and resources trying to save hemorrhaging businesses.

BUSINESS STRATEGIC PLANNING

Below the corporate level, the strategic-planning process for each business or SBU

consists of the eight steps shown in Figure 1-7. We examine each step in the sections

that follow.

Business Mission

Each business unit needs to define its specific mission within the broader company

mission. Thus, a television studio-lighting-equipment company might define its mis-

sion as “The company aims to target major television studios and become their vendor

of choice for lighting technologies that represent the most advanced and reliable stu-

dio lighting arrangements.”

SWOT Analysis

The overall evaluation of a business’s strengths, weaknesses, opportunities, and threats

is called SWOT analysis.SWOT analysis consists of an analysis of the external and

internal environments.

External Environment Analysis

In general, a business unit has to monitor key macroenvironment forces(demographic-

economic, technological, political-legal, and social-cultural) and microenvironment

actors(customers, competitors, distributors, and suppliers) that affect its ability to earn

profits (see Chapter 4 for more detail). Then, for each trend or development, man-

agement needs to identify the associated marketing opportunities and threats.

Amarketing opportunityis an area of buyer need in which a company can per-

form profitably. Opportunities can be classified according to their attractivenessand

theirsuccess probability.The company’s success probability depends on whether its busi-

Program

formulation

Strategy

formulation

Business

mission

Goal

formulation

External

environment

(opportunity &

threat) analysis

Internal

environment

(strengths/

weaknesses) analysis

SWOT analysis Implementation

Feedback

and

control

Figure 1-7 The Business Strategic-Planning Process