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Lamb, Hair, McDaniel

CHAPTER 2

Strategic Planning for Competitive Advantage

Chapter Outline

• Definition-Strategy vs. Plan• Marketing Environment/Situation Analysis• Strategic Alternatives: Ansoff, BCG and GE

Model• Competitive Advantage• The Marketing Mix• Marketing Control

Strategic Planning and Marketing Plan

• Strategic Planning: The managerial process of creating and maintaining a fit between the organization’s objectives and resources and evolving market opportunities. The goal is long-term profitability and growth.

• Marketing Plan: A written document that acts as a guidebook of marketing activities for the marketing manager.

• Marketing strategy/plan is a part of the overall company strategy/plan

• Strategic Business Unit (SBU) is a decentralized planning concept

The Marketing Environment

ProductPricePromotionPlace

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Appeal to the entire market with one marketing mix

Appeal to the entire market with one marketing mix

Concentrate on one marketing segment

Concentrate on one marketing segment

Appeal to multiple marketswith multiple marketing mixes

Appeal to multiple marketswith multiple marketing mixes

Target Market Definition and Strategy

Environmental and Situational Analysis

The collection and

interpretation of information

about forces, events, and

relationships in the external

environment that may affect the

future of the organization or the

implementation of the

marketing plan.

EnvironmentalAnalysis/Scanning

EnvironmentalAnalysis/Scanning

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Marketing Mix

A plan begins with defining the business mission

Marketing Strategy

Product Distribution

Price

Marketing Mix

Business Mission Statement

Objectives

Situation or SWOT Analysis

Target Market Strategy

ImplementationEvaluation

Control

Promotion

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SWOT Analysis

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Things the company does well.Things the company does well.

Things the company does not do well.Things the company does not do well.

Conditions in the external environment that favor strengths.Conditions in the external environment that favor strengths.

Conditions in the external environment that do not relate to existing strengths or favor areas of current weakness.

Conditions in the external environment that do not relate to existing strengths or favor areas of current weakness.

Internal

External

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Marketing Objectives

Realistic

Measurable

Time specific

Consistent with and indicating the priorities of the organization

“Our objective is to achieve 10 percent dollar market share in the cat food market within 12

months of product introduction.”

Ansoff’s Strategic Alternatives

Present Product New Product

New Market

MarketPenetration

MarketDevelopment

ProductDevelopment

Diversification

Present Market

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BCG Portfolio MatrixStrategies: Build, Hold, Harvest and Divest

Stars

Cash Cows

ProblemChildren

Dogs

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Competitive Advantage

CompetitiveAdvantage

CompetitiveAdvantage

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.

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Competitive Advantage

Focus/Niche Strategies

Focus/Niche Strategies

CostCost

Product/Service Differentiation

Product/Service Differentiation

Types of Types of Competitive Competitive AdvantageAdvantage

Types of Types of Competitive Competitive AdvantageAdvantage

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Sources of Cost Reduction

Experience CurvesExperience Curves

Efficient LaborEfficient Labor

No-frills ProductsNo-frills Products

Government SubsidiesGovernment Subsidies

Product DesignProduct Design

ReengineeringReengineering

Production InnovationsProduction Innovations

New Service Delivery Methods

New Service Delivery Methods

Differentiation

Product/ServiceDifferentiation Competitive Advantage

Product/ServiceDifferentiation Competitive Advantage

The provision of

something that is unique

and valuable to buyers

beyond simply offering a

lower price than the

competition’s.

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Examples of Product/Service Differentiators

Brand names

Strong dealer network

Product

reliability

Image

Service

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Niche Competitive Advantage

Used by small companies with limited resources

May be used in a limited geographic market

Product line may be focused on a specific product category

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Sources of Sustainable Competitive Advantage

PatentsPatents

CopyrightsCopyrights

LocationsLocations

EquipmentEquipment

TechnologyTechnology

Customer ServiceCustomer Service

PromotionPromotion

Skills and AssetsSkills and Assets

of anof anOrganizationOrganization

Skills and AssetsSkills and Assets

of anof anOrganizationOrganization

Ch 2 Discussion Questions1. Define strategic marketing and marketing planning. How

can we develop a marketing plan with the help of environmental analysis/scanning?

2. What is a SWOT analysis? Does it help strategic planning?3. What is a competitive advantage? Explain the three generic

strategies of competition.4. Explain Ansoff’s Strategic Alternatives in marketing.5. What is BCG Portfolio Matrix? What role it plays in strategy

formulation?