Strategic Planning: Goal and Strategy Formulation1; Implementation and Best Practices Formulation of Goals: Goals are “what” a business unit wants to achieve.
First perform a SWOT analysis
Next, formulate goals with specificity as to time (by when it will be performed) and magnitude or quantity (by how much it will be changed). An organization will normally have a mixture of goals.
Order your goals from broad to specific categories: for example from increasing net earnings by 20%-dansk- to increase revenues by 15% and reduce expenses by 12 % in certain areas.
Confirm that your goals relate realistically to the results of the SWOT analysis performed.
Examine your goals to make sure they are not at cross purposes with one another. For example, short term versus long term goals; sales goals versus profit goals; high growth versus low risk; development of new products versus deepening existing markets.
Strategy Formulation:Strategy is “How” a business unit will achieve what it wants. Michael Porter, HBS professor and worldwide competitive strategy expert breaks types of strategy into three categories:
Overall Cost Leadership: Lowest overall production and delivery in order to win the largest market share. Problem is that there will always be lower priced labor and production markets.
Differentiation:Marked by superior performance in an area of customer satisfaction versus pricing value. This can be in service, style, quality, technology or the like. Quality and production skill go hand in hand. Italian knitted goods, for example.
Focus: In this strategy, a company will segment its market and seek to be the leader in either cost of differentiation.
Pitfalls: To not pursue a clear strategy is to be subject to falling in the middle, the bathtub syndrome, where the company is neither a volume leader nor a price leader.
Alliances: More and more companies are forming strategic marketing alliances with the realization that they can not compete effectively in a multitude of markets. These alliances can be in the following areas:
Program Formulation: Once strategies are set, programs have to be created to support the eventual implementation of the strategy. The cost of this support and implementation must be budgeted.
Implementation and Feedback: Successful implementation of strategic planning is a function of clarity of purpose and alignment in a company as much as anything else. This is convincingly set forth in Built to Last. Feedback or the monitoring of results and changes in the external and internal environment are as necessary a part of a successful business as the creation of the strategy itself. As is often quoted, “he only thing certain in life is change.”
Marketing Process:Even though we have covered the marketing process first, it is usually the natural follow up to a formulation of goals and strategies and is used to help implement them successfully.