Chapter 3 The Role of Marketing in Strategic Planning

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Chapter 3 The Role of Marketing in Strategic
Planning
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Strategic Planning

• Managing a companys business as an investment
  portfolio
• Decide which entities need to be kept,
  restructured or eliminated
• Assess accurately future profit potential
• Market growth rate
• Companys position and fit
• Strategy
• Plan for achieving long-term goals

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Market-Oriented Strategic Planning

• Maintaining a fit between the organizations
  objectives, skills and resources and its changing
  market opportunities
• Todays challenge for hospitality companies
  knowing how to build and maintain healthy
  businesses in a fast-changing marketplace and
  environment.

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Nature of High-Performance Business

• Stakeholders
• Set strategies to satisfy them
• Processes
• Improving them
• Resources and Organization
• Aligning these

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Stakeholders

• vs. stockholders
• Customers, employees, suppliers and distributors
• How does satisfying the needs of each group
  impact the bottom line (profits)?
• Example of the Marriott hotel owners

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Processes

• The steps required to carry out company
  objectives
• Usually departmentally focused aiming to become
  more company focused
• Cooperation between departments

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Resources

• Needed to carry out processes
• Personnel, machines, information
• Outsourcing of less critical resources
• Owning critical resources
• i.e. Darden restaurants farming their own fish
  in order to control quality

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Organization

• Structure, policies and culture
• Level of service
• Positions within the organization
• Who makes the key decisions?
• Become difficult in a rapidly-changing
  environment

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The Corporate Mission

• Specific purpose
• Must be clearly defined
• For companies that are established, mission is
  based on history
• Companies should not deviate too much from their
  history
• What has proven successful or what they have been
  known for in the past

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Corporate Mission Statements

• Shared with managers, employees and even
  customers
• Major competitive scopes
• Industry
• Products and applications
• Competencies
• Market-segment
• Vertical
• Geographic

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Strategic Business Units (SBUs)

• A single business or collection of related
  businesses that can be planned separately from
  the rest of the company.
• Has its own set of competitors
• Has a manager who is responsible for strategic
  planning and profit performance and who controls
  most of the factors affecting profits.
• i.e. Celebrity as part of Royal Caribbean Intl.

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The Growth-Share Matrix

• Question marks
• Stars
• Cash Cows
• Dogs
• See page 84 for figure
• Assigning objectives, strategies and budgets
• Build, hold, harvest, divest

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Growth Strategies

• Ansoff product-market expansion grid
• Market concentration strategy
• Market development strategy
• Product development
• Diversification
• Concentric
• Horizontal
• Conglomerate

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Growth by Integration

• Backward integration
• Acquire supplier
• Forward integration
• i.e. travel agent
• Horizontal integration
• Acquire competitors

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Setting Goals

• Trade-offs
• High profit margins vs. high market share
• Deep penetration of existing markets vs.
  developing new markets
• Profit goals vs. non-profits goals
• High growth vs. low risk

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Strategic Alliances

• Agreements between organizations that allow them
  to benefit from each others strengths
• Strength of a brand name
• Aids in providing services which may not have
  been possible otherwise.

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Hotels are unique

• when it comes to strategic planning
• Restaurants, cruise lines, airlines, etc. are
  pretty centralized when compared to hotel
  companies
• Characteristics which complicate the strategic
  planning process