Key Elements of Strategic Business and Marketing Planning

Posted on Aug 13, 2025 in Business Administration and Management (BAM)

Strategic Planning Fundamentals

  1. Defining Mission, Vision, and Values

    The Mission declares the overall role of the company in society, its general purpose, and what consumer needs it aims to satisfy. A strong mission statement has four key functions:

    • Satisfying customer needs
    • Referring to the benefits it will supply
    • Referring to the stage in the value-adding process it will complete
    • Referring to the competencies it will develop (skills and capabilities they focus on)

    The Vision outlines the company’s aspirational future, and Values define the core principles guiding its operations.

  2. Setting Company Objectives and Goals

    Corporate Objectives state the levels of business and marketing accomplishments that are to be achieved by the organization. The strategic mission must be translated into specific objectives and goals for each level of management.

  3. Managing the Business Portfolio

    This involves analyzing the company’s current business units and deciding which ones to invest in, grow, or divest. A common tool for this is the BCG Matrix (Boston Consulting Group Matrix), which categorizes business units based on market growth rate and relative market share:

    • Stars: Generate large revenues but need significant investment to finance high growth. When the growth rate slows down, Stars often become Cash Cows.
    • Cash Cows: Characterized by low market growth, meaning new competitors are not encouraged to enter. These Strategic Business Units (SBUs) require less investment to hold their market share and generate substantial cash flow.
    • Question Marks: Have something wrong, and their market position is not optimal. A decision must be taken whether to invest heavily to convert them into Stars or to divest.
    • Dogs: Represent a business model nobody wants, often very specialized products for limited markets. They typically have low market share in low-growth markets and generate low profits or losses.

Strategic Analysis Tools

Ansoff’s Matrix

Ansoff’s Matrix allows businesses to weigh the level of risk involved in different marketing strategies. It identifies four growth strategies:

  • Market Penetration: Involves selling more of the same product in the same market.
  • Market Development: Concerned with selling existing products in new markets.
  • Product Development: About selling new products to existing markets.
  • Diversification: Involves selling new products in new markets, typically the riskiest strategy.

SWOT Analysis

SWOT Analysis is a strategic planning tool that separates influences on a business’s future success into internal and external factors:

  • Strengths: Internal capabilities that give an advantage over others.
  • Weaknesses: Internal limitations that give a disadvantage relative to others.
  • Opportunities: External factors that a business could exploit to its advantage.
  • Threats: External unfavorable changes, such as a new entrant into the market or problems in the economy.

Possible Strategies derived from SWOT Analysis:

  • Maxi-Maxi (SO Strategy): Use strengths to maximize an opportunity.
  • Mini-Maxi (WO Strategy): Improve a weakness to maximize an opportunity.
  • Maxi-Mini (ST Strategy): Use a strength to minimize or counter a threat.
  • Mini-Mini (WT Strategy): Minimize both a weakness and a threat simultaneously (often a defensive strategy).

Marketing Plan Foundations

  1. Defining the Marketing Plan Foundations

    The goal of marketing strategy is to create a competitive advantage that provides a powerful reason why consumers buy the product. This advantage is typically based on two elements:

    • Distinctive Competency: What the company does exceptionally well.
    • Differential Benefits: The unique value or benefits offered to customers that competitors do not provide.

  2. Planning Marketing and Other Functional Strategies

    Marketing needs to be customer-centered, as businesses win customers from competitors by delivering greater value. Key steps in marketing strategy include:

    • Market Segmentation: The process of dividing the market into distinct groups of buyers with different needs, characteristics, or behaviors who might require separate products or marketing mixes.
    • Target Marketing: Involves evaluating each market segment’s attractiveness and selecting one or more segments to enter.
    • Market Positioning: The company must decide what position it wants its brand to occupy in the consumers’ minds relative to competing brands.

    The Marketing Mix (4 Ps)

    The Marketing Mix refers to the set of tactical marketing tools that the firm blends to produce the response it wants in the target market. These are typically categorized as the 4 Ps:

    • Product: The goods-and-services combination the company offers to the target market.
    • Price: The amount of money customers must pay to obtain the product.
    • Place (Distribution): Company activities that make the product available to target consumers.
    • Promotion: Activities that communicate the merits of the product and persuade target customers to buy it.

    Marketing Management

    Marketing Management is more related to the operational and practical aspects of marketing, those having to do with the implementation of plans and programs established in the previous strategic phase.