Strategic planning is defined as:
“The process of developing and maintaining a strategic fit between the organization’s goals and capabilities and its changing marketing opportunities.”
Mission Statement
- Mission statement: The organization’s purpose, what it wants to accomplish in the larger environment
- Market-oriented mission statement: Defines the business in terms of satisfying basic customer needs
Business Porfolio
The business portfolio is the collection of businesses and products that make up the company.
A strategic business unit (SBU) is a unit of the company that has a separate mission and objectives that can be planned separately from other company businesses.
- Company division
- Product line within a division
- Single product or brand
BCG Matrix
Stars are high-growth, high-share businesses or products requiring heavy investment to finance rapid growth. They will eventually turn into cash cows.
Cash cows are low-growth, high-share businesses or products that are established and successful SBUs requiring less investment to maintain market share.
Question marks are low-share business units in high-growth markets requiring a lot of cash to hold their share.
Dogs are low-growth, low-share businesses and products that may generate enough cash to maintain themselves but do not promise to be large sources of cash.
Matrix approaches to formal planning share many problems:
- Difficult, time-consuming, and costly to implement.
- Focus only on current businesses.
- Too strongly emphasize market share growth or growth via diversification.
- Centralised
