Objective 1

Explain companywide strategic planning and its four steps.

Strategic planning sets the stage for the rest of the company's planning. Marketing contributes to strategic planning, and the overall plan defines marketing's role in the company. Although formal planning offers a variety of benefits to companies, not all companies use it or use it well.

Strategic planning involves developing a strategy for long-run survival and growth. It consists of four steps: defining the company's mission, setting objectives and goals, designing a business portfolio, and developing functional plans. Defining a dear company mission with drafting a formal mission statement, should be market oriented, realistic, specific, motivating, and consistent with the market environment. The mission is then transformed Into detailed supporting goals and objectives to guide the entire company. Based on those goals and objectives, headquarters designs a business portfolio, deciding which businesses and products should receive more or fewer resources. In turn, each business and product unit must develop detailed marketing plans in line with the companywide plan.

Discuss how to design business portfolios and develop growth strategies, (pp 65-70)

Guided by the company's mission statement and objectives, management plans its business portfolio, or the collection of businesses and products that make up the company. The firm wants to produce a business portfolio that best fits its strengths and weaknesses to opportunities in the environment. To do this, it must analyze and adjust its current business portfolio and develop growth and downsizing strategies for adjusting the future portfolio. The company might use a formal portfolio-planning method. But many companies are now designing more-customized portfolio-planning approaches that better suit their unique situations. The product/market expansion grid suggests four possible growth paths: market penetration, market development, product development, and diversification.

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