Chapter 3

Winning Markets Through Market-

Oriented Strategic Planning
 Chapter Objective

 In this chapter, we examine the following questions:

 How is strategic planning carried out at the corporate and

division levels?

 How is planning carried out at the business unit level?

 What are the major steps in the marketing process?

 How is planning carried out at the product level?

 What does a marketing plan include?

• This chapter focus how businesses can
achieve success by using market-
oriented strategic planning.
• a method that aligns a company’s goals
with customer needs, market trends, and
competitive dynamics. Let’s break it
down:
1. Understanding Market-Oriented Strategic Planning
• Market-oriented strategic planning is a
customer-driven approach where a company:
✔ Analyzes market trends to understand
consumer behavior.
✔ Develops strategies based on customer needs
rather than internal capabilities alone.
✔ Creates long-term competitive advantages by
offering value better than competitors.
2. How Market-Oriented Strategic Planning Helps in
Winning Markets

✅ Customer-Centric Approach – Companies that prioritize

market needs gain loyal customers and stay relevant.

✅ Competitive Advantage – By understanding consumer

trends, businesses can differentiate themselves from

competitors.

✅ Long-Term Success – Sustainable growth comes from

adapting to changing market conditions rather than

relying on short-term sales tactics.

It is more important
to do what is
strategically right
than what is
immediately
profitable.

1-99
• Market orientation is a business approach that

prioritizes identifying and meeting the needs and

wants of customers.

• It involves gathering market intelligence,

understanding consumer behavior, and aligning a

company's products, services, and strategies to

satisfy customer demands better than

competitors.
 Key Components of Market Orientation
1. Customer Focus – Understanding and responding to customer
needs and preferences.
2. Competitor Awareness – Monitoring competitors to differentiate
and improve offerings.
3. Inter-functional Coordination – Aligning various departments
(marketing, sales, R&D, production) to create value for
customers.
4. Long-Term Perspective – Building relationships with customers
for sustained business success rather than focusing only on short-
term profits.
 Types of Market Orientation
[Link]-Oriented – Businesses focus on
understanding and fulfilling customer needs.
[Link]-Oriented – Companies closely
analyze and respond to competitors' strategies.
[Link]-functional Coordination – Internal
collaboration ensures all business functions
work towards delivering value to customers.
 Benefits of Market Orientation

• Increased Customer Satisfaction – Leading to

customer loyalty and retention.

• Improved Competitive Advantage – Helps

businesses differentiate from competitors.

• Higher Profitability – Better customer relationships

drive revenue growth.

• Innovation and Adaptability – Companies can

anticipate and respond to market trends effectively.

Strategic planning
• in marketing refers to the process of defining
a company's marketing goals, strategies, and
tactics to achieve long-term business success.
• It involves analyzing the market, setting
objectives, and developing action plans to
gain a competitive edge.
 Key Steps in Strategic Marketing Planning
1. Market Analysis – Conducting research on industry trends,
customer needs, and competitor strategies.

2. Setting Marketing Objectives – Defining clear, measurable,

and achievable goals (e.g., increasing brand awareness or
boosting sales).

3. Developing Marketing Strategies – Choosing the right

marketing mix (product, price, place, promotion) to achieve
objectives.

4. Implementation – Executing marketing campaigns and

initiatives based on the plan.

5. Monitoring & Evaluation – Measuring performance using key

metrics (e.g., ROI, conversion rates) and making adjustments as
needed.
Corporate and Division
Strategic Planning
 Establishing Strategic Business
Units (SBUs)

1-105
1. Corporate Strategic Planning

• Corporate strategic planning focuses on

defining the overall direction and long-term
vision of an entire organization.
• It involves high-level decision-making
regarding:
 growth,

 investments,

 competitive positioning, and resource

allocation.
 Key Elements:

• Mission, vision, and core values

• Business portfolio management

• Market expansion and diversification

• Mergers and acquisitions

• Financial and sustainability goals

2. Division Strategic Planning
• Division strategic planning focuses on specific
business units or divisions within a larger
corporation.
• It aligns with corporate strategy while
addressing unique market challenges,
customer needs, and competitive positioning
within a division.
 Key Elements:

• Business unit objectives

• Market analysis and segmentation

• Product or service differentiation

• Resource and budget allocation

• Competitive strategy
1. The Growth-Share Matrix

 Developed by the Boston Consulting Group (BCG),

is a strategic tool used by businesses to analyze their

product portfolio and allocate resources efficiently.

 It categorizes products or business units based on

market growth rate and relative market share to

help companies decide where to invest, develop, or

divest.
a. Stars (High Market Growth, High Market Share) –

Products with strong performance in a growing market.

They require investment to maintain their position but can

generate high returns.

b. Cash Cows (Low Market Growth, High Market Share) –

Established products in a mature market that generate steady

cash flow with minimal investment needs.

c. Question Marks (Problem Children) (High Market

Growth, Low Market Share) – Products in a growing market

with low market share. They require heavy investment to

become stars or may turn into dogs.

d. Dogs (Low Market Growth, Low Market Share) – Weak-

performing products in a stagnant market. They neither

generate much cash nor require heavy investment, often

candidates for divestment.

2. The General Electric Model

1-
110
• The General Electric (GE) Model, also known as the

McKinsey Matrix, is a strategic planning tool used for

business portfolio analysis.

• Its primary objective is to help organizations prioritize

their investments and decide which business units or

products to focus on, develop, or divest.

• The model evaluates business units based on two key
factors:

a. Industry Attractiveness: This includes factors such as

 market growth,

 profitability,

 competitive forces, and

 technological advancements.

It assesses how favorable the market is for a particular

business unit or product.
• High Attractiveness: Fast-growing, high-profit
industries.
• Medium Attractiveness: Moderate growth and
profit.
• Low Attractiveness: Slow growth, low profitability.
b. Business Unit Strength: This assesses the competitive strength or
market share of a business unit. It looks at internal factors like :
 brand strength,

 resources,

 technology, and

 overall market position.

• High Strength: Strong competitive position with high market

share and resources.
• Medium Strength: Moderate competitive position.

• Low Strength: Weak competitive position with limited

resources.
 3. Growth strategies

Intensive Growth
 Integrative Growth

 Diversification Growth

 Defensive

1-
www.bookfiesta4u. 115
com
Intensive Strategies:

 Market penetration, market development, and

product development are sometimes referred to as
intensive strategies because they require intensive
efforts if a firm’s competitive position with existing
products is to improve.
Integration strategies:

 allow a firm to gain control over distributors,

suppliers, and/or competitors. Forward integration,

backward integration, and horizontal integration are
sometimes collectively referred to as vertical
integration strategies
Diversification Strategies:

 There are two general types of diversification strategies.

These are: related and unrelated.

 Businesses are said to be related when their value chains

posses competitively valuable cross-business strategic fits;

businesses are said to be unrelated when their value
chains are so dissimilar that no competitively valuable
cross-business relationships exist.
Defensive Strategies:

 In addition to integrative, intensive, and diversification

strategies, organizations also could pursue defensive

strategies like: Retrenchment, Divestiture, and
Liquidation.
Retrenchment – Cost-cutting and restructuring
• Involves reducing costs, downsizing, or restructuring
operations to improve efficiency.
• May include closing unprofitable branches, laying off
employees, or streamlining processes.
• The goal is to stabilize the company and return to
profitability.
Divestiture – Selling off parts of the business
• The company sells a subsidiary, division, or non-core asset to
focus on its main business.
• Often done to raise funds, improve financial health, or eliminate
underperforming units.
• Example: A company selling an unprofitable brand to another firm.

Liquidation – Shutting down and selling everything

• The most extreme step, where the company completely closes
down and sells all its assets.
• Usually done when the company can no longer operate and needs
to pay off debts.
• Example: A bankrupt company selling off equipment, property, and
inventory to repay creditors.
4. Porter’s Generic Strategies
 Overall cost leadership
 Differentiation
 Focus

1-122
1. Cost Leadership

• Aim: Become the lowest-cost producer in the industry.

• How: Achieve economies of scale, efficient operations,

and cost-cutting.

2. Differentiation

• Aim: Offer unique products/services that justify higher

prices.

• How: Invest in innovation, branding, and superior quality.

3. Cost Focus

• Aim: Be the lowest-cost producer in a niche market.

• How: Target a specific customer segment with low-cost offerings.

4. Differentiation Focus

• Aim: Provide unique products/services to a specific niche

market.

• How: Tailor products to specialized customer needs.

 Competitive
Strategy Focus Example
Advantage

Cost Leadership Broad market Low cost Walmart, McDonald's

Unique
Differentiation Broad market Apple, Nike
product/service

Cost Focus Niche market Low cost Aldi, Ryanair

Differentiation Unique
Niche market Rolex, Rolls-Royce
Focus product/service
 The end

Thank you !