Strategic planning is most important for organizations, be it small organizations or large ones. Likewise, implementing the strategic plan is also important. Without proper implementation, you are likely to move forward in a haphazard way, not knowing which ideas are to be implemented immediately, and which ideas are to be saved for the future. Strategic planning gives you a complete roadmap for the unseen future of your organization, and this roadmap can help you take decisions on the way.
The problem which rises for many organizations is that they become too myopic when they focus on Strategic planning. This may be due to many reasons, however short term strategic plans are of no use. In fact, they are not strategic plans at all, they are tactics and techniques. For implementing a strategic plan in the long term for your organization, we will discusss 4 core concepts in the class and also we will discuss Why we need stregic planning of marketing and How to planned it perfectly, there are lots of core concepts, we will discuss in the class. SO withour further delay let’s get started.
1) Give time to strategic planning
Sitting once or twice a quarter is not enough for implementing a strategic plan. A strategic plan needs review at least once a week. Thus, the top management of the organization should specifically assign time to sit and discuss the strategic plan of the organization, and whether the organization is on the right path. When should you hold such meetings, depends on the depth of the organization. Smaller organizations need to keep it lesser, but larger organizations might need more frequent strategic plan meetings.
2) Be creative
Do not get bogged down by what is already planned or what was already going to happen. Think out of the box to refresh your business and to take it to new heights. It may happen that while you are sitting frequently for your strategic plan, you might come across a phenomenon which was unobserved before by you. You should creatively consider such anomalies and at the same time come up with unique and creative ways to increase business during strategic planning time. This time is not for analysis of the past or forecasting the future, it is also for creativity and careful expansion and also a bit of calculated risk taking.
3) Get out of the routine
Adding on to the above point, after months of meetings, it might happen that the same old routine of the strategic plan is being observed. You need to get out of such routine work and push yourself for the betterment of the organization at all times. If your targets are easily achievable, then your strategic plan is not aimed high enough to challenge you. At the same time, the plan should not be very tough also. Thus, from time to time, revise the strategic plan as per the need of the organization and get out of the routine of just following and implementing a strategic plan.
4) Act on your plans
This is a fourth and final problem facing small business entrepreneurs and even some large organizations. Due to lethargy or bureaucracy, you fail to act on your plans. Your plan may be to achieve 50% growth in this year, but the steps which are taken may help you achieve 20% only. Thus, there is a huge gap in implementation. This gap needs to be identified and the strategic plan needs to cover these gaps. Ignoring these gaps will cause the failure of your planning.
Thus, in essence, making a strategic plan for your organization is not the end, in fact it is the beginning. A strong strategic plan needs to be followed up, edited, changed, and implemented upon, to make it a success. As an organization or as a business owner, you need to ensure that all the above steps are followed for the success of a strategic plan.
5 reasons to form a marketing strategy
1) To form a long term and short term goal for the company
The first steps of marketing strategy involve forming the Vision statement and Mission statement of the company. Though both, the vision and mission are long term statements, Vision is used more for what the company wants to achieve throughout its existence whereas Mission statement is more of an action plan of how the company will achieve its vision. Thus while forming marketing strategy, the firm decides on its vision and mission.
2) To get an internal analysis and competitive analysis
The second step in the formulation of marketing strategy is the internal analysis of the firm which helps the firm in deciding what resources it has and whether or not there is an optimum utilization of resources. At the same time, the firm may also conduct competitive analysis. By comparing both the above form of analysis, the firm can determine its exact standing in the industry; which areas the company is weak in and where it is strong.
3) For targeting the right customers
Once the company knows its resources and its standing in the industry, it can use the information to form the correct marketing mix and to define the right market segment. This in turn can help the organization in targeting the right customers for its products. This can be possible only if the previous two steps of marketing strategy are achieved.
4) To have a tactical advantage
Tactics are decided based on the short term goals of the company. However, tactics can become dangerous if not implemented in the right manner. Thus the sales and marketing tactics of an organization should be in line with the marketing strategy or the marketing plan decided by the management. For this, a marketing strategy needs to be in place as a guideline for the managers.
5) To implement the vision of the organization
A marketing strategy is needed not only to form a vision for the organization but also to ensure that the vision is achieved in the long duration. Everyone can have a vision, but the vision needs to be realistic and achievable. Thus based on the marketing strategy, the right plans need to be implemented such that the vision of the organization is realized.
6 reasons why Strategic Business Units are Important
Strategic business units work on the principle of micromanagement. What if you have 10 different tasks in a day, and all 10 of them are important? You will divide the tasks and then perform each of them separately. This is the exact reason behind converting a product / brand into a SBU or to make them part of a separate SBU. Strategic Business Units are Important due to many reasons, each of which is explained in the next lesson of the class.
Why Strategic Business Units are Important?
1) SBU’s make you Organized
The first principle of time management is to get organized. Similarly, one of the first things you gotta do is to see your organization clearly. And that can happen only if you are organized. If one of your marketing managers is handling 3–4 different products, then definitely he is gonna get confused with operating all of them.
The strategies might be hazy, there will be no time for creativity or innovation and all the time will be spent in just handling the existing work rather then expansion. Thus the first thing SBU’s do is they help you get organized.
2) Help in Focus
Naturally once you are organized, you can micro manage things. Just take an example of large companies like HUL and P&G (the best examples of multi product organizations). Strategic Business Units are Important because they help managers be focused on the different factors within the same organization. Each product or business unit has various requirements and these requirements can be managed efficiently by giving them their individual attention.
They have at least 30 different products at all times. Each of them requiring separate manpower, strategies, expenses and returns. Thus this needs micro managing of the highest aspect. With SBU’s another factor which is very important is FOCUS. Micro managing helps you focus on each and every product separately.
The success of a product depends on its segmentation targeting and positioning. Each of these processes requires being continuously in touch with the market, receiving feedback, identifying your target market, targeting them and then positioning accordingly.
Thus these are humongous tasks if you have to do them for each and every product and if you are handling more than 5 products at any time. Therefore dividing products into SBU’s helps you stay in touch of the market separately for each and every product. Thus a marketing manager / sales manager may be assigned one product at a time and will be responsible for that product itself. Thereby he may give valuable contribution in maintaining the STP of a product in the target market.
The best reference for investments in SBU’s can be the BCG matrix. In the BCG matrix, the SBU’s are divided as per their market share and the market growth rate. Thus depending on the BCG matrix, the type of investments which each product needs can be decided.
This is possible only if each product is treated as a completely different SBU. This SBU may be a composition of one category of product (such as shampoo) or in case of larger organizations it may even be one single type of product (such as LED or LCD televisions)
BCG matrix – The BCG matrix or the growth share matrix is one of the most popular marketing strategy models, used to classify products as cows, dogs, stars and question marks. Based on the classification, the correct marketing strategy can be decided. Ansoff Matrix – Deciding the future of your company and your products is always difficult. The Ansoff’s matrix helps marketing managers decide the future strategies which they can implement at product level or brand level as well. GE-McKinsey matrix – If you want to analyse your business portfolio, or if you want to enter in a different industry altogether, then the GE McKinsey matrix helps you make the right decision through its 9 cell approach. Porter’s five forces model – When you consider an existing industry, then there are five forces existing within that industry as per Michael Porter. These five forces vastly influence the players existing within that industry as well as the players trying to enter or exit from the industry Gap analysis – There will always be gaps in an organization when your operations are in progress. If you want to improve your operations and expand your business, or you want to achieve any other objective, Gap analysis is the best marketing and strategy tool. Product market expansion grid – A synonym to the Ansoff’s matrix, the product market expansion grid helps marketers decide whether to expand products, or expand market or to adopt an altogether different tactic. Porter’s value chain – Most companies add value to their products through a nine step linear process which is known to be the value chain devised by Michael porter. The porter’s value chain is a very popular concept in the manufacturing as well as services industry. Product life cycle – One of the most popular theory of marketing, the product life cycle theory explains the four stages through which a product goes in its life. Pricing strategies – Ahh! One of the most interesting topics of marketing and sales. Pricing is probably the most important P of the marketing mix today. How do your price your products or services? This class delves in 5 main and several smaller pricing strategies and tactics. New product development – A new product involves a lot of investment in terms of time and money. But more importantly, it should turn out as per the market demand. Hence there is a seven step process for proper new product development. Situation analysis – Any company trying to change things has to first undertake a situation analysis to understand where the company currently stands and accordingly, what steps it can take to improve its situation. SWOT analysis – The top concept for internal analysis and analysing what the firm is doing right, and where it is going wrong. The SWOT analysis is one of the most widely applied concept of marketing. And it is so flexible that it can be used in personal life or for that matter any decision making as well. Marketing mix – Understanding the marketing mix is at the crux of making any marketing plan or marketing strategy for the company. The marketing mix is the interaction point between your marketing efforts and the customer. And It is the most dynamic concept of marketing over time. Service marketing mix – Services are very different from products mainly because of their intangible, heterogeneous and perishable nature. Hence the service marketing mix has 3 more P’s above and beyond the normal marketing mix. Sustainable competitive advantage – Most companies devise a number of different strategies and plans, all because they can have a sustainable competitive advantage over competitors. Competitor analysis – Before implementing any competitive strategy, you need to analyse your competition. This concept presents a 7 step process to analyse competition. Competitive profile matrix – A most useful matrix used to design the complete competitive profile for an individual company. This matrix helps the firm take the right decisions based on competition and how it will respond. Making a marketing strategy – How do you make a marketing strategy? It is by considering the 10 different factors mention in this class which help in the creation of long term as well as short term strategy. Family Life cycle – How does a family decide which products it wants? And if you want to launch multiple products, how do you optimize the consumption? It is by observing the various stages of the family life cycle and accordingly thinking of launching the right products. AIDAS Theory – The best theory of selling, the AIDAS theory explains how to rope customers in and how, in 5 stages, the lead can be converted from a prospect to a customer to a repeat customer. PEST analysis – Whenever entering a new country or a different region altogether, there are several external business and environment factors which need to be considered to establish business. PEST analysis helps you with analysis of these factors. PESTLE analysis – An extension of the PEST analysis, PESTLE analysis also considers the legal and environmental challenges. SMART objectives – How do you define your goal and objectives? It is by using the SMART objectives method. It is a productivity concept most useful for marketing managers. Values attitudes and lifestyle – Consumer decision making is a tough science for marketers and a lot of decisions are made on the basis of Values, attitudes and lifestyle of people. AIO – Similar to the above concept, Attention, Interest and Desire are three important intangible elements of customer buying behaviour. Customer satisfaction levels – Customer satisfaction and delight is something which each marketer strives for. So it is important that the marketer knows about the five types of customer satisfaction levels. Product adoption – How does a customer adopt a product? Or how are different products adopted based on the product life cycle? The same can be explained by the product adoption concept. Diffusion of Innovation – Innovative products generally hang in a balance because if they are not accepted in the market, then they fail. Thus, the study of diffusion of innovation is important when launching an innovative product. Value chain analysis – Porter’s value chain explains how value is added to a product from the start to the end of the production cycle. Value chain analysis is a 9 step analytical process on how to add value to the chain.