Strategic Marketing Planning

Things we will learn in this

chapter
Introduction
Objectives of strategic marketing
Process
SWOT
BCG MATRIX
PORTERS MODEL
Ansoffs Product-Market Grid
Defined
Strategy is a consistent stream of decisions
and actions to deal with the environment
- - Henry Mintzberg
Strategy means developing and
communicating the companys unique
position making trade-off and forging fit
among activities
- Michael Porter
What is Strategic Planning?
It is the managerial process that helps to
develop a strategic and viable fit between
the firms objectives, skills, resources with
the market opportunities available. It helps
the firm deliver its targeted profits and
growth through its businesses and
products.
Characteristics of strategic
marketing
Emphasis on long-term implications
Varying roles for different product
Corporate input
Relationship to finance
Orgnisational level
Objectives of strategic marketing
To strategically respond to the
opportunities
To focus on company's intent
To focus on market share
To strengthen long term position
 LEVELS OF ORGANIZATIONAL
STRATEGY (Exhibit 8.4)

2003 Pearson Education Canada Inc. 8.14

TYPES OF ORGANIZATIONAL
STRATEGIES
Corporate-Level Strategy
Determines
what businesses a company should be in or

wants to be in
the direction that the organization is going

the role that each business unit will play

8.13
TYPES OF ORGANIZATIONAL
STRATEGIES (continued)
Corporate-level Strategy (continued)
Grand Strategy - Stability
no significant change is proposed

organizations performance is satisfactory

environment appears to be stable and

unchanging

8.15
TYPES OF ORGANIZATIONAL
STRATEGIES (continued)
Corporate-level Strategy (continued)
Grand Strategy - Growth
seeks to increase the level of the organizations operations

related diversification - grow by merging with or acquiring

firms in different but related industries
unrelated diversification - grow by merging with or
acquiring firms in different and unrelated industries
Grand Strategy - Retrenchment - designed to address
organizational weaknesses that are leading to performance
declines

8.16
Process
Defining the corporate VISION, MISSION
OBJECTIVES AND GOALS OF
Establishing SBUs
Allocating resources for SBUs
Planning for new business
Vision , Mission ,
Objectives and Goals
Vision

description of something in the future

mental perception of the kind of environment an

individual, or an organization, aspires to create within
a broad time horizon and the underlying conditions
for the actualization of this perception
Vision Statement

A vision statement answers the question,

What will success look like?

The pursuit of this image of success is

what motivates people to work together.
 A Vision provides strong foundation for
developing a comprehensive mission
statement .
Strategic vision addresses the where are
we going questions and explains the course
and direction chartered by management.
A strategic vision should provide a clear
understanding of what the business should
look like and provide help to take strategic
decisions.
Vision
Strategic intent should lead to an end.
That end is the vision of an organization or an
individual.
It is what the firm or a person would ultimately like to
become.
Should be short and specific.
It should be based on overall purpose of organization
Characteristics

1.Its a blue print of the kind of business

organization the management is trying to create
and the market position it would occupy.
2.It should be forward looking a provide strategic
course the management will adopt to help the
company prepare the future
3.Specific and provide guidelines to managers for
making decisions and allocating resources
4.Flexible to changing environment
5.Within realm of companies hope to achieve
6. Appeal to emotions and motivate employees
7. Narrow vision, can focus effort and excite people
8. May not fit to present circumstance, but contributes
to future. Shows picture of future.
9. Should be easy to explain to all stake holders and
preferably short
Benefits of having a vision

Good visions are inspiring and exhilarating.

Help the organization to prepare for the future.
Clarifies and crystallizes the senior executives views about
the companies long term direction.
Good vision reduces risk-taking and experimentation.
Good vision help to motivate and morale boosting of
employees.
Good visions are competitive, original and unique.
Good visions represent integrity, they are truly genuine and
can be used for the benefit of people.
Limitations of a vision statement

Vague and incomplete

Not forward looking
Too broad
Uninspiring
Not distinctive
Examples

1. BSNL Vision Statement : To become the largest

telecom service provider in Asia.

2. Walt Disney vision Statement : Make people

happy

3. Stokes Eye Clinic, Florence, South Carolina :

Our vision is to take care of your vision.

Example vision statement

Infosys

Vision To be a globally respected

corporation that provides best-of-
breed business solutions, leveraging
technology, delivered by best-in-
class people."
VISION
Our Vision is to be the worlds mobile
communication leader enriching
customers lives, helping individuals,
businesses and communities be more
connected in a mobile world.
Missio
n
Mission
Organizations relate their existence to
satisfying a particular need of the society.
They do it in terms of their mission.

Mission is a statement which defines the

role that an organization plays in a society.

It refers to the particular need of that society

for instance, its information needs.
Defining Mission

essential purpose of the organization, concerning

particularly why it is in existence, the nature of the
business it is in, and the customers it seeks to serve
and satisfy.

purpose or reason for the organizations

existence.

mission is an enduring statement of purpose

that distinguishes one firm from other similar
firm.
 Different from vision by it is more
focused on what is our business
as compared to the where are we
headed or what we wand to
become nature of vision.
Characteristics

1.Declaration of attitude
2.Customer orientation
3.Declare of social
policy
1) Declaration of attitude
Not designed to specific or to have a concrete
end.
Is declaration of attitude and outlook
Is meant to provide motivation, general direction,
an image and a philosophy to guide the
organization
Should be flexible, even vague to provide room
for adapting to changing environments and ways
of operations
2) Customer orientation
Reflects the anticipation of customer.
The operating philosophy of the organization is
to identify customer needs and then provide a
product or service that fulfill those needs.
Should define:
what organization is and what is aspiring to be
be limited enough to exclude some exclude
some ventures and broad enough to allow for
creating growth
Have its own identity that distinguish it from
others
 serve as a framework to evaluate both
current and prospective activities.
be stated in terms sufficiently clear to
be widely understood throughout the
organization
3) Declaration of social policy
Socially oriented policy suggest that the company
takes into consideration not only profit owed to
shares and what it owes to major stakeholders,
but also seriously responds to responsibilities
towards consumer, environmentalists, minorities.
Mission Statement

A mission statement is an enduring statement of

purpose that distinguishes one business from other
similar firms. A mission statement identifies the
scope of a firms operations in product and market
terms.
BSNL mission

To provide world class state of art technology

telecom services to its customers on demand at
competitive prices.

To provide world class telecom infrastructure in

its area of operation and to contribute to the growth
of countrys economy.
The mission statement of an organization is normally

short, to the point, and contains the following elements:

Provides a concise statement of why the

organization exists, and what it is to achieve;

States the purpose and identity of the organization;

Defines the institution's values and philosophy; and

Describes how the organization will serve those

affected by its work.

Formulating mission

1. What is the basic purpose of your

organization?
2.What is unique about your organization?
3.What is in your company that will make it
stand out in a crowd?
4.Who are, and who should be, your principal
customers?
5.What are the basic beliefs, values and
philosophical priorities of your firm?
Components of mission statement

1.Product or service
2.Customers
3.Technology
4.Survival, growth & profitability
5.Company philosophy
6.Public image
7.employees
1) Product or service
Invariably includes mention of the product or
service the company offers to customers.
2) customers
Information in the mission statement describes
the profiles of customers and the organization it
services.
3) Technology
Components of the mission statement generally
refers to means of production, operations and
organizational functions.
It include elements such as equipments, materials,
techniques, processes, machines and tools.
4) survival, growth and profitability
make a general reference to the companys
survival and healthy functioning, which include
growth and profitability.
5) Company philosophy :
It reflects the basic believes, values, aspirations
and ethical priorities of company that guide the
employee in conditioning organizational function.
6) Public image :
elements of the company deals with how the
company wishes to be viewed by external
constituencies.
To create a positive public image, the mission
statement could explicitly refers to the
responsiveness of the company to concerns about
the company and the society
7) Employees:
To develop a public image a company could
include concerns for recognition of the value of
employees in the statement
Need for an explicit mission
To ensure unanimity of purpose within the
organization.
To provide a basis for motivating the use of the
organizations resources.
To develop a basis, or standard, for allocating
organizational resources.
To establish a general tone or organization climate.
To serve as a focal point for those who can identify
with the organizations purpose and direction.
MISSION
Driving in a wireless world
Vodafone is primarily a user of technology
rather than a developer of it, and this fact is
reflected in the emphasis of our work
programme on enabling new applications of
mobile communications, using new technology
for new services, research for improving
operational efficiency and quality of our
networks, and providing technology vision and
leadership that can contribute directly to
business decisions.
 Infosys

Mission "To achieve our objectives

in an environment of fairness, honesty,
and courtesy towards our clients,
employees, vendors and society at
large."
A Vision statement describes what the
organization would like to become.

A Mission statement describes what the

organization is now.

What the company is providing to society?

Example Mission Statements

1.Wal-Mart "To give ordinary folk the chance to buy

the same thing as rich people."
2.Mary Kay Cosmetics "To give unlimited opportunity
to women."
3.3M "To solve unsolved problems innovatively"
4.Google's mission is to organize the world's
information and make it universally accessible and
useful.
Examples of vision and mission statements
are :
Bellevue Hospital, New york :

Vision : The Bellevue Hospital is the leader in

providing resources necessary to realize the
countrys highest level of health throughout life.
Mission : The Bellevue Hospital, with respect,
compassion,integrity and courage, honours the
individuality and confidentiality of our patients,
employees and community, and is progressive in
anticipating and providing future health care
services .
California Energy commission

Vision Statement : It is the California Energy

Commission for Californians to have energy
choices that are affordable, reliable, diverse,
safe and environmental acceptable.
Mission Statement : It is the California Energy
Commissions mission to assess, advocate and
act through public/private partnership to
improve energy system that promote a strong
economy and health environment.
Synthite industries
VISION Statement

By consistently delivering the Ingredients of success for

the most exciting Food,
Health and Wellness Solutions, we will be the partner of
choice to our clients worldwide.

MISSION statement

GROWTH
INNOVATION
SERVICE
ENHANCE VALUE
MAKING IT A GREAT PLACE TO WORK
L $ T technology,Engineering and
Construction Company
Vision
L$T shall be a professionally managed indian multinational,
committed to total customer satisfaction and enhancing
shareholders value.

Mission
L$T belives that the true and full measures of growth, success
and progress lies beyond balance sheets or conventional
economic indices. It is best reflected in the difference that
business and industry makes to the lives of peoples. Through its
social investments L$T addresses the needs of communities
residing in the vicinity of its facilities, taking sustainable
initiative in the areas of health, education, enivironment
conservation, infrastructure and community development .
 Mission Statement Vision Statement
A Mission statement talks about HOW A Vision statement outlines WHERE you want to be.
you will get to where you want to be. Communicates both the purpose and values of your

Diffrence b/w vision and mission

About Defines the purpose and primary
objectives related to your customer
needs and team values.
business.

It answers the question, What do we It answers the question, Where do we aim to be?
do? What makes us different?
Answer

A mission statement talks about the A vision statement talks about your future.
Time present leading to its future.

It lists the broad goals for which the It lists where you see yourself some years from now. It
organization is formed. Its prime inspires you to give your best. It shapes your
function is internal; to define the key understanding of why you are working here.
Function measure or measures of the
organization's success and its prime
audience is the leadership, team and
stockholders.

Your mission statement may change, but As your organization evolves, you might feel tempted
it should still tie back to your core to change your vision. However, mission or vision
Change values, customer needs and vision. statements explain your organization's foundation, so
change should be kept to a minimum.
 What do we do today? For whom Where do we want to be going forward? When do
do we do it? What is the benefit? In we want to reach that stage? How do we want to do
other words, Why we do what we it?
Developing a do? What, For Whom and Why?
statement

Purpose and values of the Clarity and lack of ambiguity: Describing a bright
organization: Who are the future (hope); Memorable and engaging expression;
organization's primary "clients" realistic aspirations, achievable; alignment with
(stakeholders)? What are the organizational values and culture
responsibilities of the organization
towards the clients?
Features of an
effective statement
Objectives
Objectives

Objectives represent a managerial commitment to

achieve specified results in a specified period, of time.
They clearly spell out the quantity and quality of
performance to be achieved, the time period, the
process and the person who is responsible for the
achievement of the objective.
Objectives are end results of planned
activity

Objectives state what is to be

accomplished by when and should be
quantified if possible.
 objectives are more specific and narrower
Objectives are always measurable and particular
It vary with the hierarchical level in the
organization, becoming more focused and short term
going down from top level to frontline managers.
Objectives are critical for organizational
effectiveness and efficiency, and it has been shown
that managers who aggressively pursue objectives
perform better that managers who are not driven by
them.
Importance of objectives
1.Objectives help to define the organization in its
environment
2.Objectives help in coordinating decisions and
decision-maker
3.Objectives help in formulating strategies

4.Objectives provide standards for assessing

organizational performance
Characteristics of good Objective

1.Specific and Unambiguous

2.Time horizon
3.Flexible
4.Attainable
5.Measurable
6.Multiple objectives
1) Specific and unambiguous
Help to remove confusion about the target at
which efforts should be directed
Help to determine reward structure in fair and
equitable manner
Eg : objective of almost every business would
have increased profitability, but it should be
explicitly explained, as 10% increase in profit
2) Time horizon
Should be stated in terms of a time frame within
which they should be attained
Without a timeframe, an objective would be
ineffective and almost meaningless.
Eg : A 10% increase in profit being targeted over a
year is a different, objective than over 2yrs, if
there is no time horizon, this objective would serve
no purpose
3) Flexible

Since objectives are set in the future, which cannot

be predicted, exactly there should be room for
altering an objective should the environment
change.
4) Attainable

Objectives are balanced act between being too

easy and too difficult
Should be challenging enough in that they give
rise to innovation and fresh approaches, yet they
should be achievable with not too much increase
in resourse
5) Measurable

Should be stated in quantifiable, measurable terms

So everyone can clear about objectives, progress can
be measured towards the objectives and employees
morale can be tied to number rather than
personalities
6) Multiple objective
Rare to have just one objective that all employees
work towards.
Eg : An objective such as increasing in number of
customers served would directly with either a cost
maximization or quality improvement objective.
Even when the management aligns different
objectives, even seemingly opposing ones, but all
efforts is coordinated in the same direction.
Characteristics
1.Facilitate to achieve mission and goals
2.Set the basis for strategic decision making
3.Clear the relationship of organization with environment
4.Understandable to each member of organization
5.Should be measurable and controllable Should be related to ti
me frame
6.Should be challenging Should be concrete and specific
7.Should be formed within the constraints
8.Should motivate people.
Factors affecting Objectives
1.Size of the organization :Bigger size makes that
objective formulation process complex.
2.Level of management :Organizational objectives are
set by managers. Different levels of managers set
different kinds of objectives.
3.Organization culture :Culture is a system of shared
set of values,beliefs and norms that guide behavior.
Areas of objectives

1.Markets share
2.Leadership in innovation and technology
3.Product quality and productivity
4.Resource level
5.Customer satisfaction
6.Performance level
7.Social responsiveness
1) Market share
Healthy market share should sustain even as an
organization tries to increase its share.
Sustainable market share is important in stable
markets and in competitive environment.
2) Leadership in innovation & productivity
Innovation is needed for success and in some
cases for survival.
Innovation must be translated into objectives
and indicate what the organization is aiming
for.
3) Product quality and productivity
Designing and ensuring quality has been shown
to be critical competitive strength.
Constant balance between achieving efficiency as
related to cost-cutting objective and maintaining
quality.
 4) Recourse level
Resources includes inventory, equipments,
capital, human capital
Resources imply cost, their use should be
minimized without any compromise in aspects
such as quality and serivice

5) Customer satisfaction
Maintaining customer relations and building
customer loyalty and goodwill are highly desirable
6) Performance level
Related to productivity and effectiveness
Performance objectives can also include
innovation and professional development

7) Social responsiveness
Business respond to society and community by
specifying explicit objectives for socially beneficial
activities.
Example Objectives

Minnesota Mining & Manufacturing (3M)

Financial objectives
1.To achieve 10% growth in earnings per
share.
2.To achieve 20% - 25% return on equity.
3.To achieve 27% return on capital
employed.
Objectives of BSNL

National Plan Target of 500 million subscriber base for

the country by December 2010.

Broadband customers base of 20 million in the country

by 2010 as per Broadband policy 2004.
Goals
 Goal

Goal is defined as an intermediate result to be

achieved by a certain time as part of the grand
plan . A plan can, there for have many goals.
 Goal is a specific target that a firm intend to reach
in long term.
A describes clearly the activities and task to be
completed by an individual, a department or an
organization.
Goals should be measurable, quantitative,
challenging, realistic, consistent and prioritized.
 Provide basics for measuring companies
performance and the process it is making
towards the vision.

Strategic goals help managers to establish end

result of activities in general without getting
bogged down in details, such as issues of
measurement and timing
Two types of Goals
1) Financial goals :
These goals focus on achieving a certain level
of financial performance, measured in terms of
return in investment or growth of revenues
2) Strategic goals :
The goals focus on achieving strategic or
competitive advantages within the industry,
like technology leadership, creativity and
innovation and superior customer service
Characteristics of goal

According to M.D.Richards :

1) Specific : so that they are precise and

measurable, would assist management in
monitoring the progress towards achievement
of goals at each specific point of time
2) Issues of goal :
Short-term goals and objectives should be left
to lower level managers to identify, plan and
achieve
Issues like lowering of cost and improving
quality should be included in goals of middle
level managers
3) should be well constructed, realistic and
challenging :
Challenging goals motivates managers to be
innovative, creative and ambitious in improving
operations, marketing, sales, etc.
4) Specification of time period
Examples of goals
Strategic goals of EI paso Electrical Company in
various operations are :

Customer Service :
Provide quality service to customer at least equal to
the highest standard in the industry
Maintain reliability of service to customer at a level
above 99%
Ensure that customer are educated about the safety
aspects of using electricity.
Community service :
Promote economic growth and increased
development of the companys total service area
Provide job opportunities and investment in the
service area which promotes a higher standards of
living for all citizens.
Cooperate with and serve the educational institutions
located in the service area in a manner consistent
with other leaders in the industry.
Shareholders relations :
Assure that all expenditure are made in such a way
as to protect and enhance shareholders investment.
Provide a rate of return to the shareholders which is
competitive with other investments
Base all company involvement in new programmes
or projects on solid economic principles
Employee-management obligations :
Monitor and strive to improve the quality of
management and supervision
Attract, develop and retain able and loyal
employees
Provide equal employment opportunities and a
high degree of training along with modern,
professional tools
Corporate communication :
Make a assertive effort to provide information
communication on relevant company issues
Keep senior management apprised and educated
on current topics of interest
Enhance the community image of the company
by being receptive to the needs of customer and
the community
 Goal vs Objectives :
Goals are an expected or desired outcome of a
planning process. Goals are usually broad, general
expressions of the guiding principles and aspirations
of an organization.

Objectives are precise targets that are necessary to

achieve goals. Objectives are detailed statements of
quantitatively or qualitatively measurable results the
plan hopes to accomplish.
 Goals vs objectives
Goal Objective

The purpose toward which an endeavor is directed. Something that one's

efforts or actions are
intended to attain or
Meaning accomplish; purpose;
target.

I want to achieve success in the field of genetic research I want to complete this
and do what no one has ever done. thesis on genetic research
by the end of this month.
Example

Generic action, or better still, an outcome towards Specific action - the

which we strive. objective supports
Action attainment of the
associated goal.

Goals may not be strictly measurable or tangible. Must be measurable and

Measure tangible.

Time frame Longer term Mid to short term

 San Antonio Multi-Service Market
Mission: Maximize Utilization of the Direct Care System in the San
Antonio Multi-Service Market Area
Vision: A World-Class, Multi-Service, Unified Health System Serving San
Antonio and Referred Beneficiary Market
Goals:
Optimize efficiency between direct and private sector care markets
Eliminate duplicate services
Increase synergy and cooperation among San Antonio MTFs
Ensure patient satisfaction with access and quality service
Strengthen Readiness by allocating appropriate mix of resources
Collaborate support functions across the market

Objectives:
Establish the Consult and Appointing Management Office
Increase RWPs / RVUs in the direct care system per the business plan
Consolidate logistical and contracting functions
Realign staff resources to meet patient demand
Establish enrollment sites to meet changing patient demographics
Enroll eligible beneficiaries up to capacity
Referred books

Strategic Management- A book on business policy / Corporate

planning
Francis Cherunilam
Strategic Management
J. David Hunger & Thomas L Wheelen

Strategic Management
Garth Salonee , Andrea Shepard & Joel Podolny

Article

Vision, Mission and Objectives of Business -

Shanmuga Rao. Pandala
Dr. N. V.S. Suryanarayana
Corporate Mission
This seeks to embody the entire goals of
the organization and the objective of its
existence.
It seeks to provide a sense of purpose,
direction and opportunity
5 questions that the firm must ask
itself
What is our business?
Who is our customer?
What does our customer need?
What will our business be?
What should our business be?
Good mission statements have
three characteristics
They focus on a limited number of goals
It stresses the major values and policies the
firm desires
It defines the major competitive scope of
operation
SBU
It is a company within a company
The business is differentiated from the rest
of the company
It has its own set of competitors
It is a separate profit centre
Boston consulting group (bcg)
Matrix is developed by Bruce Henderson of
the Boston Consulting Group in the early
1970s

According to this technique, business or

products are classified as low or high
performance depending upon their market
growth rate & relative market share.
Relative market share & market
growth
To understand the Boston Matrix you need
to understand how market share & market
growth interrelated.

Market Share
Market share is the percentage of the total market
that is being serviced by your company measured
either in the revenue terms or unit volume terms.
 Relative market share
Business Unit Sales this year
RMS :-
Leading rival sales this year

The higher your market share, the higher

proportion of the market you control.
 Market growth rate
Market Growth is used as a measure of a
markets attractiveness.
Individual Sales this year Individual sales last year
MGR =
Individual Sales last year
 Markets experiencing high growth are
ones where the total market share
available is expanding & there is plenty
of opportunity for everyone to make
money
The bcg growth-share matrix
 It is portfolio planning model which is based on the
observation that companys business unit can be
classified in to four categories .

Question Marks
Stars
Cash cows
Dogs

It is based on the combination of market growth &

market share relative to the next based competitor.
Question marks/problem children ( high
growth, low market share)
Most business start of as question marks
They will absorb great amount of cash if the
market share remains unchanged (low)
Question marks have potential to become star
& evenly cash cow but can also become dog.
Investment should be high for question
marks.
 Stars
(high growth, high market share)
Stars are leader in business
They also require heavy investment to
maintain its large market share.
It leads to large amount of cash consumption
& cash generation.
Attempts should be made to hold the market
share otherwise the star will became a cash
cow.
 Cash cows
( low growth, high market share)
They are foundation of the company &
often the stars of yesterday.
They generate more cash than required
They extract the profits by investing as
little cash as possible
They are located in an industry that is
mature not growing or declining
 Dogs
(low growth, low market share)
Dogs are the cash traps
Dogs do not have potential to bring
High cost Low quality
Business is situated at a declining stage
Why bcg matrix

To asses
Profile of product /business
Cash demands of products
The development cycle of product
Resource allocation & divestment
decisions
Main steps of bcg matrix
Identifying & dividing a company into SBU

Assessing & comparing the prospects of each

SBU according to two criteria
1) SBUs relative market share
2) Growth rate of SBUs industry
Classifying the SBUs on the basis of BCG
matrix
Developing strategic objective for each SBU
benefits
BCG matrix is simple & easy to understand
It helps to quickly & simply screen the
opportunity open to you, & help you think
about how you can make the most of them.
It is used to identify how corporate cash
resources can best be used to maximize
companys future growth & profitability.
Limitation
BCG matrix uses only two dimensions
relative market share & market growth rate.
Problem of getting data on market share &
market growth
High market share does not mean profits all
time.
Business with market share can be profitable
too.
BCG-Matrix for the product line
of
Coca-Cola
 Question marks
(high growth, low market share
 Stars
(high growth, high market share)
 Cash cows
(low growth, high market share
 Dogs
(low growth, low market share)
Question Marks
 stars

Invest for growth

 Cash cows
( milk to fund other business)
Dogs
 In FMCG, ITC has a strong presence
in:
Foods business
Kitchens of India

Aashirvaad

Minto

Sunfeast

Candyman
 Contd
Bingo brands in ready to eat.

Staples

Confectionery

Snack Foods
Personal Care Products business

Fiama di Wills
Vivel
Essenza di Wills
Superia brands of products in perfumes
Haircare and skincare
Safety Matches and Agarbattis

Ship (through ownership of WIMCO)

IKno
Mangaldeep
Aim brands
They have 4 brands in hotels
 ABHISHEK JAIN
Soya Farmer
& e-Choupal Sanchalak
Dahod Village,
Raisen District,
Madhya Pradesh
Paper boards & specialty papers
Coated Virgin Boards
Coated Recycled Boards

Barrier Poly Coated

Cast Coated
Graphic
Others
 The BCG Matrix for ITC Ltd.
Stars ?
Hotels FMCG- Others
Paperboards/
Packaging.
Agri business.
Cows Dogs
FMCG-Cigarettes
 Strategy recommendations
Investment
Further Growth
maintain market position
Cash flow
Self sustaining : fund there own
growth
require funds from other SBU
(Cash Cows)
Assure the future of the company
Grow into the cash cows
 Strategy recommendations
Investment
increase market share
selectively develop into Stares
Cash Flow
Require Funds From Other SBUs ( cash cows)
Unrealized future opportunities
The marketing strategy is to get markets to adopt this
products
These product need to increase their market share
quickly or they becomes a dog.
The best way to handle question marks is to either
invest heavily in them to gain market share or to sell
them
 Strategy recommendations
Investment
maintain market share
maintain capacity
Cash Flow
positive cash flow
provides funding to support Stares
and ?.
No potential for profit growth
Strategy recommendations
Investment
diversified strategy
reduce capacity to free up resources
Cash Flow
Goal or positive cash flow
negative cash flow
No real growth opportunities
Conclusion
Though BCG matrix has its limitation it is
one of the most famous & simple portfolio
planning matrix, used by large companies
having multi-products.
SWOT Analysis
Strengths
Weaknesses
Opportunities
Threats
ENVIRONMENTAL
SCANNING
A scan of the internal and external environment is
an important part of the strategic planning process.
Environmental factors internal to the firm usually
can be classified as:
Strengths (S)
Weaknesses (W)
And those external to the firm can be classified as:
Opportunities (O)
Threats (T).
SWOT MATRIX
SWOT ANALYSIS
STRENGTH
Patents
Strong brand names
Good reputation among customers
Cost advantages from proprietary know-how
Exclusive access to high grade natural
resources
Favorable access to distribution networks
WEAKNESS
Lack of patent protection
A weak brand name
Poor reputation among customers
High cost structure
Lack of access to the best natural resources
Lack of access to key distribution channels
OPPORTUNITY
An unfulfilled customer need
Arrival of new technologies
Loosening of regulations
Removal of international trade barriers
Competitors weakness
THREAT
Shifts in consumer tastes away from the firm's
products
Emergence of substitute products
New regulations
Increased trade barriers
Competitors new product
Government law
Legal
SWOT TOWS MATRIX
STRATEGIES
S-O strategies: pursue opportunities that are a good fit
to the company's strengths.
W-O strategies: overcome weaknesses to pursue
opportunities.
S-T strategies: identify ways that the firm can use its
strengths to reduce its vulnerability to external threats.
W-T strategies: establish a defensive plan to prevent
the firm's weaknesses from making it highly
susceptible to external threats.
REASON FOR GROWTH
STRATEGIES
To obtain economies of scale
To increase profit
To spread risk
To become a market leader
To fulfill natural urge
To ensure survival
To ensure success
To generate additional source of Income
TYPES OF GROWTH STRATEGIES
Intensive Strategies
Market Penetration
Market Development
Product Development
Integrative Strategies
Vertical Integration
Forward Integration
Backward Integration
Horizontal Integration
Diversification Strategies
Concentric Diversification
Conglomerate Diversification
 Ansoffs Product-Market Grid
Current products New products

Current Mkts Mkt penetration Product development

strategy strategy

Mkt development Diversification

New Mkts strategy strategy
 IGOR ANSOFFs MATRIX
Market

Produ EXISTING NEW

ct
EXIST
MARKET MARKET
PENETRATION DEVELOPMENT
Increase sales to existing market Existing products sold to new
Penetrate existing market more markets
deeply
NEW
NEW PRODUCT DIVERSIFICATION
DEVELOPMENT New Products sold to new
markets
New products developed for existing
markets
 IGOR ANSOFF MATRIX
MKT

PROD EXISTING NEW

UCT

EXIST MARKET PENETRATION MARKET

Little risk DEVELOPMENT
Moderate Risk

NEW NEW PRODUCT DIVERSIFICATION

DEVELOPMENT High Risk
Moderate Risk
 IGOR ANSOFF MATRIX Growth
of TESCO
MKT

PROD EXISTING NEW

UCT
EXIST MARKET PENETRATION
Increase in share of grocery
business at the expense of
Sainsbury
MARKET DEVELOPMENT
Move into convenience
store market
Expansion abroad

NEW NEW PRODUCT DEVELOPMENT DIVERSIFICATION

Expansion into Petrol Sales High Risk
Development of financial services
Market Penetration
Maintain increase market share in current
market with current products
Selling more of the same to the same
people
In saturated market - Difficult
In stagnant market grab market share
from others intense competition
Market Penetration
Increase usage by existing customers
Encourage increase in frequency of use
Attract customers away from rivals / Gain
market share at expense of rivals
Devise and encourage new applications
Encourage non-users to buy
Market Penetration
Use Market Penetration when -
When the market is not saturated
When there is potential of growth
When competitors share is falling
When increase in volume leads to
economies of scale
When there is scope to sell more to
existing users
Market-Penetration Strategy
Why ? To dominate market
How ? To increase usage or get new customers;
reduce price; expand distribution or increase
promotional activities
When ? When market is growing
What to look out for ? Competitive reaction; cost
of conversion
Example: Airlines used reduced fares & promotion
various family travel packages to penetrate market
PRODUCT-MARKET STRATEGIES

A product- (new offering-) development

strategy dictates that an organization create
new offerings existing markets.
PRODUCT-DEVELOPMENT STRATEGY

This strategy involves:

Product
Developing totally new offerings.
Innovation

Product Enhancing the value to customers

Augmentation of existing offerings.

Product Adding different features, sizes, etc. to

Line Extension broaden the existing line.
Product Development Strategy
New product to replace old product
New innovative products
Product improvements
Product line-extensions
New products to complement existing
Products at a different quality level from
existing product
PRODUCT-DEVELOPMENT STRATEGY

Factors to consider when adopting this strategy:

The market size and volume needed for profitability.

The magnitude and timing of competitors responses.

The impact of the new product on the sales of

existing offerings (cannibalization).
The capacity of the organization to deliver the
offerings to the market(s).
Product-Development Strategy
Why ? To satisfy buyers need
How ? New or improved product; innovate or
augment product
When ? Customer has a need or a problem
What to look out for ?
Market size/volume
competitor reaction
effect on existing products
resources to deliver new products
 IGOR
MKT ANSOFF MATRIX
PROD EXISTING NEW
UCT
EXIST MARKET PENETRATION MARKET
Little risk DEVELOPMENT
Moderate Risk

NEW PRODUCT DEVELOPMENT DIVERSIFICATION

Moderate Risk High Risk
Market Development Strategy
Selling the same product to different market
Entering new markets, segments with existing
products
Gaining new customers, new segments, new
markets
Requires changes in marketing strategy,
distribution, pricing policy, promotional
strategy
Use market development when
Untapped market is beckoning
The firm has excess capacity
Attractive channels to access new markets
MARKET-DEVELOPMENT STRATEGY

This strategy involves:

Adjusting the marketing mix, such as:
Modifying the basic product offering

Using different distribution outlets

Changing the sales effort or advertising

Analyzing competitors strengths,

weaknesses, and potential for retaliation.
MARKET-DEVELOPMENT STRATEGY

This strategy involves (continued):

Identifying the number, motivation, and
buying patterns of new buyers.
Determining the organizations ability to
adapt to new markets to evaluate success.
MARKET-DEVELOPMENT STRATEGY

Internationally, this strategy has four forms:

Exporting Licensing

Joint Venture/ Direct

Strategic Alliance Investment
MARKET-DEVELOPMENT STRATEGY

Involves marketing the same offering in another

Exporting country through sales offices or intermediaries.

Is a contract where one firm (licensee) is given the

Licensing rights to patents, trademarks, etc. by the owner
(licensor) in turn for a royalty or fee.

Involves investment by both a foreign firm and a

Joint Venture/ local company to create a new entity in the host
Strategic Alliance country. The two forms share ownership, control,
and profits of the entity.

Direct Involves investing in a manufacturing and/or

assembly facility in a foreign market. Is the most
Investment risky and requires the most commitment.
Market-Development Strategy

Why ? To venture into new markets

How ? Sell existing products in new markets;
modify product; use different distribution; use
different advertising/sales strategy
When ? Present market is saturated
What to look out for ? Competitive reaction;
understand new buyers; adaptability
 IGOR
MKT ANSOFF MATRIX
PROD EXISTING NEW
UCT
EXIST MARKET PENETRATION MARKET
Little risk DEVELOPMENT
Moderate Risk

NEW PRODUCT DEVELOPMENT DIVERSIFICATION

Moderate Risk High Risk
Diversification
New products sold to new markets
New products sold to new customers
Select based on growth prospects which
the two new variables offer that the present
product-market does not
Diversification Types
Related Unrelated
Beyond present Entirely new product
product market, but and market
within present Conglomerate
industry diversification
Synergistic
diversification
Lesser risk
Related Diversification
Horizontal new products introduced to
current markets (new product development)
Vertical when an organization moves into
its suppliers or customers business
Concentric when new products closely
related to existing products are introduced
in new markets
Diversification Strategy (contd)
Three types of diversification
Concentric, horizontal and conglomerate
Three essential tests of success
Attractiveness
Cost-of-entry
Better-off
 Vertical Integration
Why?
To gain operating economies i.e. to lower costs
To gain access to or control supply demand
To enhance technological innovation
How? Integrate backward and forward
When? Basic industry is in a growth stage
What to look out for? Problems in managing very
different businesses; increase risk, reduced flexibility;
cost of excessive in-growing
Example of Vertical Integration
Airlines integrate backward to in-flight
kitchens; forward to travel agencies
Related Diversification
Development beyond present product
market mix but within the broad confines
of the industry
Diversification Strategy
Why ? Growth opportunities outside current business
How ? New products for new markets
When ? Distinctive competencies available
What to look out for ? High risks, resources required,
need to understand new markets, fit with distinctive
competencies
Uses of Ansoffs Matrix
A framework to explore directions for
strategic growth
Most commonly used model for strategic
growth
Identify and analyze growth opportunities
Considers expected returns and risks
TO SUMMARIZE
Market Penetration
Advertise - to encourage more people within
your existing market to choose your product, or
to use more of it
Introduce a loyalty scheme
Launch a price or other special offer promotions
Increase your sales force activities
Buy a competitor company (particularly in
mature markets)
Product Development
Extend your product by producing different
variants, or packaging existing products it
in new ways
Develop related products or services
In a service industry, shorten your time to
market, or improve customer service or
quality
Market Development
Target different geographical markets at
home or abroad
Use different sales channels, such as online
or direct sales if you are currently selling
through the trade
Target different groups of people, perhaps
with different age, gender or demographic
profiles from your normal customers.
 Modified Ansoff Matrix 9 Box
Grid Existing
Product Modified New
Market

Existing
Market Product Product
Penetration Extension Development
Modified Partial
Market Limited
Diversification
Expansion Diversification
New
Market Partial
Diversification
Development Diversification
PORTERs FIVE FORCES
MODEL Porters FIVE
FORCES MODEL
INTRODUCTION
The Five Forces model of Porter is an outside-in
business unit strategy tool that is used to make an
analysis of the attractiveness (value...) of an industry
structure.

It captures the key elements of industry competition.

PORTERs FIVE FORCES
MODEL Potential
entrants

Threat of
new entrants

Bargaining power Industry competitors

of suppliers
Suppliers Buyers
Rivalry among Bargaining power
existing firms of buyers

Threat of
substitutes
Substitute
products
PORTERs FIVE FORCES
MODEL Threat of
Threat of
New
New
Entrants
Entrants
Threat of New Entrants
Economies of Scale

Product Differentiation

Capital Requirements

Customer Switching Costs

Access to Distribution Channels
Government Policy

Expected Retaliation
PORTERs FIVE FORCES
MODEL Threat of
Threat of
New
New
Entrants
Entrants

Bargaining
Power of
Suppliers
 Bargaining Power of Suppliers

Suppliers are likely to be powerful if:

Suppliers exert power
in the industry by:
* Threatening to raise
prices or to reduce quality
Powerful suppliers
can squeeze industry
profitability if firms
are unable to recover
cost increases
Supplier industry is dominated by a
few firms
Suppliers products have few substitutes
Buyer is not an important customer
to supplier
Suppliers product is an important
input to buyers product
Suppliers products are differentiated
Suppliers products have high
switching costs
PORTERs FIVE FORCES
MODEL Threat of
Threat of
New
New
Entrants
Entrants

Bargaining
Power of
Suppliers
 Bargaining Power of Buyers

Buyer groups are likely to be powerful if:

Buyers are concentrated Buyers compete
with the supplying
Purchase accounts for a significant industry by:
fraction of suppliers sales
Products are undifferentiated * Bargaining down prices

Buyers face few switching costs * Forcing higher quality

Buyer presents a credible threat of * Playing firms off of

backward integration each other
Buyer has full information
PORTERs FIVE FORCES
MODEL Threat of
Threat of
New
New
Entrants
Entrants

Bargaining Bargaining
Power of Power of
Suppliers Buyers

Threat of
Substitute
Products
Threat of Substitute Products
Keys to evaluate substitute products:
Products with improving
price/performance tradeoffs
Products with relative to present industry
similar products
function limit
the prices
firms can Example:
charge
Electronic security systems
in place of security guards
Fax machines in place of
overnight mail delivery
PORTERs FIVE FORCES
MODEL Threat of
Threat of
New
New
Entrants
Entrants

Bargaining Rivalry Among Bargaining

Power of Competing Firms Power of
Suppliers in Industry Buyers

Threat of
Substitute
Products
Rivalry Among Existing Competitors

Intense rivalry often plays out in the following ways:

Using price competition

Staging advertising battles
Increasing consumer warranties or service
Making new product introductions

Occurs when a firm is pressured or sees an opportunity

Price competition often leaves the entire industry worse off

Advertising battles may increase total industry demand,
but may be costly to smaller competitors
Coca-cola
Traditional competition:
Prices of Pepsi, local brands
Market share
Promotional actions of competition
New entrants:
New look-a-like manufacturers
Substitute products:
Fashionable new drinks, milk drinks, coffee,
beer, ...
Coca-cola
Suppliers:
Price and availability of ingredients on world market
Quality speed safety, traceability, flexibility of supply
chain

Buyers/consumers:
High as a result of intense competition both
among branded and unbranded products.
Combined purchase power of shops, bars, supermarkets
 Competitive Advantage
The Competitive Advantage model of Porter learns that
competitive strategy is about taking offensive or defensive
action to create a defendable position in an industry, in order
to cope successfully with competitive forces.

Companies can combat the pressure of the five forces and

create competitive advantages.

There are 2 basics types of Competitive Advantage :

Cost leadership (low cost)
Differentiation
:
Strengths of five forces
The model is strong tool for competitive
model
analysis at industry level.

It provides useful input for performing a

SWOT analysis.
Michel porters five competitive force
model for Apparel industry
Entry barriers
 Economies of scale apparel industry is high

Industry will buy raw materials in bulk for further

production when raw materials buy in bulk the
average cost will reduce
Product differentiation : High
Product differentiation will be high for new
entering industry in terms of brand identification,
brand loyalty, quality, consumer service and
advertising to overcome by strong existing one
and who are first in market

Eg :Harpa and calvin klein

Capital requirement: High

Apparel industry need huge capital requirement for

plant & machineries, land, raw material and
advertisement endorsing and startup losses.
Government policy Less

Comparatively the Government policies are few for

apparel industry to startup , they required license for
textile mill , import & export etc
Conclusion for entry barrier
When the firms financial aspects are strong it can
enter apparel industry easily, legal aspects play a role
when the manufacturing is into textiles.

Over all entry barriers for entering into apparel

industry is not so difficult too.
Powerful suppliers:
Suppliers refer to the firms that provide inputs to the
industry.
Bargaining power of the suppliers refer to the
potential of the suppliers to increase the prices of
inputs like labour, raw materials, services, etc or the
costs of industry in other ways.
The suppliers power is high

When it is for unique product

Ex: Fur

When it is for less product differentiation

Ex: Silk
Conclusion
Suppliers have high bargaining power when the
supply is for unique and un differentiated products.
Powerful buyers:

Buyers refer to the customers who finally consume the

product or the firms who distribute the industrys product
to the final consumers.
Bargaining power of buyers refer to the potential of
buyers to bargain down the prices charged by the firms in
the industry or to increase the firms cost in the industry
by demanding better quality and service of product.
Power for buyers

When they buy in bulk

Ex: Manufacturer Whole seller

When they can find alternative suppliers:

Ex: Levies, Spykar, Pepe jeans etc
 Conclusion
Bargaining power of buyers is high when they by in
huge quantity and also when there are more number
of suppliers to the market
 Substitute product

These are the alternative products/ brands satisfying the similar need of
the customer
Substitute products affect when the switching cost is high

Ex: Levis and Pepe jeans

Switching for quality, durability and status

Ex: Luiviton, Gucci


Conclusion
Substitute product affects when the switching
of brand takes place.

It also affects for the factors like quality,

status symbol etc
Rivalry among current competitors

Rivalry refers to the competitive struggle for

market share between firms in an industry.
Extreme rivalry among established firms poses a
strong threat to profitability.
Competition is high in apparel industry

Conclusion
Apparel industry is facing huge competition

Due to such intensive competition survival of

a new entrant is hard.
Final conclusion
Apparel industry is one of the booming
industry

The above factors determine that the entry

barrier for a new entrant in apparel industry is
high.

It is difficult for a new entrant to enter and exit

easily, because it will have to face the initial
losses
 It is very difficult to match the service level of
the established competitors of the market for
initials.

Gaining the customer loyalty is too difficult

and involve huge time, cost to achieve it.
 Limitations
Inside-out strategy is ignored (core competence)

It does not cope with synergies and interdependencies

within the portfolio of large corporations (parenting
advantage)

The environments which are characterized by rapid,

systemic and radical change require more flexible,
dynamic or emergent approaches to strategy formulation
(disruptive innovation)

Sometimes it may be possible to create completely new

markets instead of selecting from existing ones (blue ocean
strategy)
Organizational Alignment: The 7-S Model
Introduction
Tool for analysis and action.

Developed McKinsey&Co. consultants ,

Harvard Business School and Stanford
Business School professors.

22
6
7-S Framework

22
7
1. Strategy
Ways to achieve competitive advantage.

Examples.
Low-cost strategy through economic
production or delivery
Product differentiation through distinct
features or innovative sales.
22
8
2. Structure
Ways in which task and people are specialized
and divided, and authority is distributed.

Four main structures

Functional Structure
Divisional Structure
Matrix Structure
Network Structure 22
9
 Functional Structure

23
0
 Divisional Structure

GM

23
1
 Matrix Structure

23
2
 Network Structure

23
3
3. Systems
Formal processes and procedures to manage the organization.

Examples:
Performance Measurements
Reward Systems
Planning
Budgeting
Resource Allocation
Information System
Distribution System
23
4
4. Staffing
People, their background and
competencies.

Organizations approach to recruitment,

selection, socialization, training and
employee development.

23
5
5. Skills
Distinctive competencies in the
organization.

Can be of People, Management Practices,

Systems and/or Technologies.

23
6
6. Style
Leadership style of top management and
overall operating style of organization.

Impacts norms followed by people, how

they work and interact with each other and
customers.

23
7
7. Shared Values
Core values shared in the organization and
serve as guiding principles of what is
important.

Helps focus attention and provides a

broader sense of purpose.

23
8
Using the 7-S Model
Each S is consistent with and reinforces the other Ss.
Recognize the full range of elements that need to be
changed and focus on the ones that will have the
greatest effects.
All seven variables are interconnected- to make
progress in one, adjustments need to be made in
others also.
No natural starting point for a change it is decided
by diagnosis of the alignment of the organization.
23
9
Using the 7-S Model
Hard Ss (Easier to change)
Strategy
Structure &
Systems
Softer Ss (Harder to change directly and take longer)
Staffing
Skills
Style &
Shared Values
24
0
24
1
GENERATION &
IMPLICATION!
Tom Peters & Robert Waterman in
1980s

Organizational Analysis Tool

Monitor Changes in the Internal

Situation of the Organization
REASON
THE 7S ELEMENTS
HARD SOFT
ELEMENTS ELEMENTS
STRATEGY SHARED
VALUES
STRUCTURE SKILLS
SYSTEMS STYLE
STAFF
LETS GO DEEP! How is the
company
What is our divided? What
strategy? is the
How do we hierarchy?
What are the
intend to main systems
achieve our that run the
objectives? organisations?
What are the
strongest How
skills? participative
Are there any is the
skill
Whatgaps?
are the management?
What
core values? What is the
positions need
How strong leadership
to be filled?
are the style?
Are there any
STARBUCKS: McKinsey 7-S
Framework Model
 About STARBUCKS
Starbucks Corporation , generally known as
Starbucks Coffee, is an American global coffee
company and coffeehouse chain based in
Seattle, Washington.
Founded in 1971 by three partners Jerry
Baldwin, Zev Siegl, Gordon Bowker.
A Seattle coffee bean roaster and retailer.
Starbucks locations serve hot and cold
beverages, whole-bean coffee, micro ground
instant coffee, full-leaf teas, pastries, and
snacks.
Customers are able to socialize, read, study or
enjoy music while drinking coffee.
In 1987, the original owners sold the Starbucks
chain to former employee Howard Schultz,
who rebranded his Giornale coffee outlets as
Starbucks and quickly began to expand.
STARBUCKS in INDIA
Tata Starbucks Ltd is a 50:50
joint venture company, owned
by Starbucks Corporation and
Tata Global Beverages, that
owns and operates Starbucks
outlets in India.

Starbucks, through an
agreement with Tata Coffee,
serves coffee that is 100%
locally sourced and roasted.

The rationalised plan for

effective leadership and
management for Starbucks
Corporation is best presented
through McKinsey 7S
Framework.
 Company objective is to Establish Starbucks as a
most recognised and respected brand in the world.
From the beginning, Starbucks set out to be a
different kind of company. One that not only
celebrated coffee and the rich tradition, but that also
brought a feeling of connection.
Today, with more than 15,000 stores in 50 countries,
Starbucks is the premier roaster and retailer of
speciality coffee in the world.
 The company, Tata
Starbucks, a joint
venture between US
Chain Starbucks with
Tata Global Beverages,
closed its year end with
total six stores in
Mumbai and five stores
in Delhi, which
generated the total
revenue of Rs 14.61
crore during the
financial year ended
March, according to its
latest annual filings.
As of Jan 2015,
Starbucks operates 63
outlets in 7 cities of
Shared values:
The core values of the company that are evidenced in
the corporate culture and the general work ethic.
The organization constantly refers to the
Starbucks experience, and rallies
employees behind delivering and
satisfying this notion.
Any retailer can sell coffee; Starbucks sells
an experience.
This experience includes coffee, friendly
staff, interesting music, and a comfortable
meeting place.
The Starbucks Mission
Statement
(@Starbucks.com)
Strategy:
The plan devised to maintain and build
competitive advantage over the competition.
Structure:
The way the organization is structured and who
reports to whom.
Starbucks refers to its employees
as partners, and extends to all of
them (even part time help
working at least twenty hours a
week), benefits such as health
coverage and stock options.
It was rated 91st in the 100 best
places to work for by Fortune
Magazine.
Starbucks believes that effective
human capital management
translates into great customer
services.
Starbucks College Achievement
Plan
Starbucks introduced a beta
version of a delivery system
called Mobile Pour.
 Systems:
The daily activities and procedures that staff
members engage in to get the job done
The firm has several important systems in place
within the organization. These deal primarily
with product knowledge, and product
development.
Training: Starbucks trains its staff extensively
on the intricacies of coffee beans including
where they are grown, how they are roasted,
how they should be ground, and how they
should be filtered to optimize taste.
Roasting coffee: Starbucks roasts all of its
own coffee. This allows the company to deliver
a product which consistently matches customer
expectations.
Purchasing coffee: As a large coffee retailer,
Starbucks has the economies of scale needed
to purchase coffee directly from growers and
regional associations, rather than rely on import
 A team of expert Starbucks tasters
evaluates more than 250,000 cups
every year in tasting room, selecting
just a few of the most unique coffees
to become Starbucks Reserve
coffees.
We dont tell the bean how to taste
we listen to know what the bean has
to offer so we can bring out the best
flavor.
Skills:
Skills refers to the distinct capabilities or
dominating attributes that distinguish a firm
from its competitors.
Friendly knowledgeable staff

Starbucks Experience through non-retail

operations

Positioning of Starbucks products in the lines

of alliance partners
Staff & Style:
Staff refers to the quality of people.
Customer service
Flexible work environment
Lower employee turnover

Style for the organization can be defined as

innovative, flexible, collegial and team-
orientated
Increase motivation through reviews and
raises.
Employees are allowed to make decisions
and participate in
Changes due to
7s
model
The firm has a clearly defined strategy
which is well communicated with both
employees and customers which
helped organisations effective growth.
Due to this 7s model , Starbucks was
able to leverage and replicate
experience in each of its stores.
Provided reinforcement by supplying
frontline employees with the training
and skills.
It plans to open around 100 Starbucks
cafes in the country by next year to
match up to established rivals and is
building a war chest for expansion by
more than trebling its authorised
capital to Rs 220 crore.
 Strategy of Partnership management which resulted
in partnership with Apple to collaborate on selling
music as part of the "coffeehouse experience".
Starbucks and Kraft Foods entered into a partnership
in 1998 to sell Starbucks products in the Mondelez
grocery stores owned by the latter.
For staff : In June 2014, Starbucks announced a new
partnership with Arizona State University(ASU) that
would allow Starbucks employees to complete four
years of college at Arizona State University's online
program for only around 23K.
Some of the methods Starbucks has used to expand
and maintain their dominant market position,
including buying out competitors' leases, and
clustering several locations in a small geographical
area (i.e., saturating the market), have been labelled
anti-competitive by critics.
Led to reduced operational expenses,75% gain in
Market shares within 4 years , increase in market
revenue by 5% each year, increased brand
ANALYSIS OF STRATEGIC FIT IN INFOSYS
THROUGH MC KINSEY 7S MODEL :
 INFOSYS:
It Was Co-founded In 1981.
It Is An Indian Multinational Corporation
That Provides Business Consulting ,
information Technology , software
Engineering And Outsourcing Services.
It Is The Third Largest India Based It
Services Company By 2014 Revenues
And The Fifth Largest Employer
The Market Capitalisation Is $31.11
Billion Making It Indias Fifth Largest
Publicly Traded Company.
 STRATEGY:
What is the strategy?
How to intend to achieve the objectives?
How to deal with competitive pressure?
How are changes in customer demands
dealt with?
How is strategy adjusted for
environmental issues?
 STRATEGY FOLLOWED BY INFY:

Client focused strategy to achieve growth

Increase business from existing and new
clients
Expand geographically
Enhance solution set
Develop deep industry knowledge
Enhance brand visibility
Pursue alliances and strategic acquisitions
 ORGANISATION STRUCTURE:

How is the company/team divided?

What is the hierarchy?
How do various departments coordinate
activities?
How do the team members organise and
align themselves?
Is decision making and controlling
centralised or decentralised?
 ORGANISATION STRUCTURE AT INFY:

Adopted a free organisation devoid of

hierarchies.
Everyone is known as associates of his
position in the company.
Software development is undertaken
through teams and the constitution of
teams is based on the principle of
flexibility.
STAFF

Staff refers to the

number and type of
personnel within
the organisation
and how
companies develop
employees and
shape basic values
AT INFOSYS
SYSTEMS

Defines the flow of

activities involved
in the daily
operation of
business, including
its core processes
and its support
systems
SHARED VALUE

Shared Values are

the commonly held
beliefs, mind-sets
and assumptions
that shape how an
organisation
behaves, also
known as the
Corporate Culture
DRIVEN BY VALUES
STYLE:- Cultural style and behavior of
organization.
How participative is the management
style?

How effective is the leadership?

Do employees tend to be cooperative or

competitive?

Are there real teams functioning within

the organization or are they just nominal
groups?
SKILLS:-Dominant attributes that exist in
the organization.
What are the strongest skills represented
within the company?

Are there any skills gaps?

What is the company known for doing well?

Do the current employees have the ability

to do the job?

How are the skills monitored and assessed?

Thank You ! !
After studying this chapter you
should be able to:
Understand the different characteristics of a
product mix.

Recognize the stages and characteristics of

the product life cycle.

Identify appropriate marketing strategies

for products in different life cycle stages.
After studying this chapter you
should be able to:
Describe the limitations of the product life
cycle concept.

Discuss different product-mix and product-

line strategies.
Product Mix
Product
ProductMix:
Mix:
The
Thetotal
totalassortment
assortmentof
ofproducts
productsand
andservices
services
marketed
marketedbybyaafirm.
firm.

Product
ProductLine:
Line:
AAgroup
groupofofindividual
individualproducts
productsthat
thatare
are
closely
closelyrelated
relatedin
insome
someway.
way.

Individual
IndividualProduct:
Product:
Any
Anybrand
brandor
orvariant
variantof
ofaabrand
brandin
inaaproduct
product
line.
line.
Product Mix Characteristics
Product Mix Width:
The number of product lines in the
product mix.

Product Line Length:

The number of products in a
product line.

Product Mix Consistency:

The relatedness of the different
product lines in a product mix.
Product and Service Strategies
Individual Product Strategies
Product
Product Life
Life Cycle
Cycle (PLC):
(PLC):
Describes
Describesthe
theadvancement
advancementof ofproducts
productsthrough
through
identifiable
identifiablestages
stagesof
oftheir
theirexistence.
existence.
The Product Life Cycle
The
The Product
Product Life
Life Cycle
Cycle Concept
Concept is
is
Based
Based on
on Four
Four Premises
Premises

Profits from a product

Products have a
vary at different stages
limited life.
in the life cycle.

Product sales pass through

Products require different
distinct stages, each with
strategies at different
different marketing
life cycle stages.
implications.
The Diffusion Process
Innovators
(2.5%)

Early Adopters
(13.5%)

Early Majority
(34%)

Late Majority
(34%)

Laggards
(16%)
The Diffusion Process
PLC Stages and Characteristics
 PLC Marketing Strategies
Stage
Stage Objective
Objective Marketing
Marketing Strategy
Strategy
Introduction
Introduction Awareness
Awareness&&trial
trial Communicate
Communicatebenefits
benefits

Growth
Growth Usage
Usageof
offirms
firmsbrand
brand Specific
Specificbrand
brandcommunication,
communication,
lower
lowerprices,
prices,expand
expanddistribution
distribution

Maturity
Maturity Maintain
Maintainmarket
marketshare
share Sales
Salespromotion,
promotion,drop
dropprice,
price,
Extend
Extendlife
lifecycle
cycle expand
expanddistribution,
distribution,new
newuses
uses
&&new
newversions
versionsof ofproduct
product

Decline
Decline Decide
Decidewhat
whatto
todo
do Maintain,
Maintain,harvest,
harvest,or
ordivest
divest
with
withproduct
product
Limitations of the PLC
1.1. The
The life
life cycle
cycle concept
concept applies
applies best
best to
to product
product
forms
forms rather
rather than
than to
to classes
classes of
of products
products oror specific
specific
brands.
brands.

2.2. The
The life
life cycle
cycle concept
concept may may lead
lead marketers
marketers to to think
think
that
that aa product
product has
has aa predetermined
predetermined life,
life, which
which may
may
produce
produce problems
problems inin interpreting
interpreting sales
sales and
and profits.
profits.

3.3. ItIt isis only

only aa descriptive
descriptive way
way of oflooking
looking at
at the
the
behavior
behavior of of aa product
product and
and thethe life
life cycle
cycle can
can not
not
predict
predict the the behavior
behavior ofof aa product.
product.
Product-Line Strategies
Strategic
StrategicAlternatives:
Alternatives:
1.1. To
Toincrease
increasethe
thelength
lengthof
ofaaproduct
product
line.
line.

2.2. To
Todecrease
decreasethe
thelength
lengthof
ofaaproduct
product
line.
line.
Increasing the Product Line
Downward-stretch Strategy
Upward-stretch Strategy
Two-way-stretch Strategy
Line-filling Strategy

Cannibalization occurs when a new

Product takes sales away from
existing products.
Decreasing the Product Line
Product Line Contraction:
Firms must consider deleting products
when:
They are not successful.

They reach the decline stage of PLC.

Long product line marketing costs are too

high.
Product-Mix Strategies

The Product Mix consists of all

product lines and individual products
marketed by the firm.
Strategic Alternatives

Add New
Product Lines?

Delete Existing
Product Lines?
Branding Strategies

Individual
IndividualBrand
Brand Family
Family&&Individual
Individual
Name
NameStrategy
Strategy Brand
BrandName
Name

Product
ProductMix
Mix Family
FamilyBrands
Brandsoror
Branding
BrandingStrategies
Strategies Product
ProductTypes
Types

Family
FamilyBrand
Brand Company
Company
Name
NameStrategy
Strategy Name
Name