Business Unit Strategic Planning

B U S IN ESS U N IT
S TR ATEG IC P LA N N IN G
By Agung Utama

Business U nit Strategic Planning Process

Business M ission
 Each business unit needs to define

its specific mission within the
broader company mission.
 Example:

SW O T Analysis
 SWOT analysis: The overall evaluation of a

company’s strengths, weakness, opportunities, and
threats.
 EXTERNAL ENVIRONMENT ANALYSIS ( Opportunity and

Threats)

 A marketing opportunity is an area of buyer need or
potential interest in which a company can perform profitably.
Opportunities can take many forms :
A company
efficient.
A company
A company
A company
A company

may make a buying process more convenient or
can meet the need for more information and advice.
can introduce a new capability
may be able to deliver product or service faster
may be able to offer a product at a much lower price.

 Market Opportunity Analysis: a matrix used to

determine the attractiveness and success
probability of any opportunity.

 Five questions are asked:
1. Can the benefits involved in the opportunity be
2.
3.

4.
5.

articulated to a defined target?
Can the target market be located and reached
with cost-effective media and trade channels?
Does the company posses access to the critical
capabilities and resources needed to deliver the
customer benefits?
Can the company deliver the benefits better than
any actual or potential competitors?
Will the financial rate of return meet or exceed
the company’s required threshold for investment?

 Market Opportunity Matrix:

High
Low

Attractiveness

High

Success
probability

Low

1

2

3

4

-EXTERNAL ENVIRONMENT ANALYSIS
( Opportunity and Threats)
 Threat: a challenge posed by an unfavorable
trend or development that would lead, in
the absence of defensive marketing action,
to deterioration in sales or profit.

High
Low

Seriousness

Probability of
occurence
High

Low

1

2

3

4

 Four outcomes that characterize

business’s overall attractiveness based
on the major threats and opportunities
1. Ideal business: high in major

opportunities, low in major threats
2. Speculative business : high in both
major opportunities and threats.
3. Mature business : low in major
opportunities and threats
4. Troubled business : low in opprotunities
and high in threats.

 Internal Environment Analysis

(Strengths/Weaknesses Analysis)
Each business needs to evaluate its internal strengths
and weaknesses.
The business does not have to correct all its
weakness, nor should it gloat about all its strengths.
The big question is whether the business should limit
it self to those opportunities where it possesses the
required strengths or whether it should consider
better opportunities where it might have to acquire or
develop certain strengths.
Some times, business does poorly not because its
departments lack the required strengths, but because
they do not work together as a team.
It is therefore critical to assess interdepartmental
working relationships as part of the internal
environmental audit.

 Check list for performing strengths and weakness

analysis

PERFORMANCE

MAJOR
MINOR
NEUTR
STRENGT STRENGT AL
H
H
MARKETIN
G
1.Company
reputation
2.Market
Share
3.Customer
satisfaction

4. Customer
retention
5. Product
quality
6. ……………
FINANCE
1. Cost of
capital

IMPORTANCE
MINOR
WEAKNE
SS

MAJOR
WEAKNE
SS

HI

LOW

MED

G oalform ulation
 Goal formulation : the formulation of the specific

goals for the planning period.
 Managers use the goals to describe objectives
that are specific with respect to magnitude and
time.
 The objective including:
 Profitability
 Sales growth
 Market share improvement
 Risk containment
 Innovation
 reputation

 Goals criteria:

1. Hierarchically, from the most to the least

important
2. Quantitatively
3. Realistic
4. consistent

Strategic Form ulation
 Goals indicate what business wants

to achieve
 Strategy indicate a game plan for
getting the goals.
 Business strategy consists of
marketing strategy, technology
strategy, and sourcing strategy.

 Porter’s Generic Strategies:
1. Overall cost leadership; lowest production and

distribution cost in order to get lower price than
its competitor and winning the market.
2. Differentiation; concentrates on achieving
superior performance in an important customer
benefit area. Example, the firm seeking quality
leadership.
3. Focus; business focuses on one or more narrow
market segments.

 Operational effectiveness and strategy
 According to Porter, firms pursuing the same strategy

directed to the same target market constitute a
strategic group
 The firm that carries out that strategy best will make
the most profits.
 Porter drew a distinction between operational
effectiveness and strategy.
 The companies believe they can win by performing the
same activities more effectively than competitor, but
competitor can quickly copy the operationally effective
company using benchmarking and other tools, thus
diminishing the advantage of operational activities.
 Porters define strategy as “the creation of a unique and
valuable position involving a different set of activities”.
In this context, a company can claim that it has a
strategy when it performs different activities from rivals
or perform similar activities in different ways.

Program form ulation and Im plem entation
 A great marketing strategy can be sabotaged

by poor implementation.
 According to Mc kinsey and Company, strategy
is only one of seven elements In successful
business practice. The frame work of the
elements is called Mc Kinsey’s 7-s framework
for business success.
 The elements are:
 Hard ware elements: strategy, structure and

systems
 Soft ware elements: Style, skills, staff, shared values

 According to this framework, when these

elements are present, companies are usually
more successful at strategy implementation.

Feedback and Control
 As it implements its strategy, the firm needs to track

the results and monitor new developments on the
marketing environment.
 If the environments change, the company can count it,
so the company need to review and revise its
implementation, programs, strategies, or even
objective.
 The key to organizational health is willingness to
examine the changing environment and to adopt new
goals and behaviors.
 High performance organizations continously monitor
the environment and use flexible strategic planning to
maintain a fit with the evolution of the environment.