Question

Describe how strategy is developed at the corporate, business unit, and functional levels in an organization. Define the concepts of business, mission, and goals, and explain why they are important in organizations. Explain why managers use marketing dashboards and marketing metrics. Discuss how organizations formulate strategies. Outline the strategic marketing process. Key Terminology competitive advantages goals marketing dashboard marketing plan marketing strategy marketing tactics market segmentation market share mission objectives profit situation analysis strategic marketing process strategy

Answer 1

Strategy operates at different levels of an organization – corporate level, business level, and functional level.

Corporate Level Strategy

Corporate level strategy occupies the highest level of strategic decision making and covers actions dealing with the objective of the firm, acquisition and allocation of resources and coordination of strategies of various SBUs for optimal performance. Top management of the organization makes such decisions. The nature of strategic decisions tends to be value-oriented, conceptual and less concrete than decisions at the business or functional level.

Business-Level Strategy.

Business level strategy is – applicable in those organizations, which have different businesses-and each business is treated as strategic business unit (SBU). The fundamental concept in SBU is to identify the discrete independent product / market segments served by an organization. Since each product/market segment has a distinct environment, a SBU is created for each such segment. Therefore, it requires different strategies for its different product groups. Thus, where SBU concept is applied, each SBU sets its own strategies to make the best use of its resources (its strategic advantages) given the environment it faces. At such a level, strategy is a comprehensive plan providing objectives for SBUs, allocation of resources among functional areas and coordination between them for making optimal contribution to the achievement of corporate-level objectives.Such strategies operate within the overall strategies of the organization.

Functional-Level Strategy.

Functional strategy, relates to a single functional operation and the activities involved therein. Decisions at this level within the organization are often described as tactical. Such decisions are guided and constrained by some overall strategic considerations. Functional strategy deals with relatively restricted plan providing objectives for specific function, allocation of resources among different operations within that functional area and coordi-nation between them for optimal contribution to the achievement of the SBU and corporate-level objectives.

Below the functional-level strategy, there may be operations level strategies as each function may be dividend into several sub functions like, marketing strategy, a functional strategy, can be subdivided into promotion, sales, distribution, pricing strategies with each sub function strategy contributing to functional strategy.

Businesses exist for various purposes and establish missions and goals. A business's mission is the statement of its direction. Goals are the targets the organization has set to be achieved within a specific time frame.
A business is defined as an organization or enterprising entity engaged in commercial, industrial, or professional activities. A business concept is a statement that describes the reach and reason of existence of a given business idea. In other words, it sums up the crucial elements that define the business.

Understanding Mission Statements

The mission statement of the organization outlines the company’s business, its goals and its strategy for reaching those goals. It focuses more on where the company is at the present time and the tactical steps it wants to use to achieve its objectives. The mission statement of a company can be used to shape the culture of the organization.When establishing a mission statement for your company, outline what it is your business does, who you serve and how you serve them. Those are the three most critical elements of a business’ mission statement.

Understanding Goals

While the mission statement focuses on more tactical aspects of the business, the goals looks to the future of the company. It provides the direction in the which the company wants to go. Together with the mission statement, it helps to create the organizational strategy for the business.

When drafting a goal for your business, answer questions about what your hopes and dreams are. What kind of future do you want to see, and how does the company play a part in making that happen? Are you aspiring to make some kind of change, and how will you make it.

It shows exactly where the company wants to go in the future and how it intends to attain that status. It also contains their key selling point.

The mission and goals of a company help direct the organizational strategy. Both provide purpose and goals, which are necessary elements of a strategy. They outline the audience for the business, and what that audience finds important. By identifying these elements, the business executives can develop a more step-by-step strategy that helps the company achieve its mission in the short term, and its vision in the long term.

It help businesses to outline performance standards and metrics based on the goals they want to achieve. They also provide employees with a specific goal to attain, promoting efficiency and productivity.

These aren’t only necessary for employees and business owners when it comes to the organizational strategy. They also apply to external stakeholders like customers, partners and suppliers. These can be used as a public-relations tools to attract media attention, engage specific audience segments and develop business partnerships with like-minded companies.

Strategic Marketing is a process of planning, developing and implementing maneuvers to obtain a competitive edge in your chosen niche. This process is necessary to outline and simplify a direct map of the company’s objectives and how to achieve them. A company wanting to secure a certain share of the market, should ensure they clearly identify their mission, survey the industry situation, define specific objectives and develop, implement and evaluate a plan to guarantee they can provide their customers with the products they need, when they need them. Of course, the central objective of any company will be customer satisfaction so they may dominate the market and become leaders in their industry and thus providing substantial business satisfaction. In order to do that, three phases of marketing strategy must be perfected to create delight in their customers and beat out the competition.

In order to gauge the success of a marketing program, managers use marketing dashboards and marketing metrics to determine the performance of various elements of the marketing plan.

Marketing plans helps a business develop the right products to address consumers needs, establishes the best way to promote the business and determines where the product will be distributed.

Strategy formulation is the process of determining and establishing the goals, mission and objectives of an organization, and identifying the appropriate and best courses or plans of action among all available alternative strategies to achieve them.

Strategy formulation should roughly follow these steps:

1. Define the organization and its environment

The first step requires you to take a look at the organization. The points of interest are:

• Target market
• Customers
• Offerings
• Adaptation to changes and challenges

2. Define the strategic mission

Organizations are forward-looking, and they want to achieve something as they move the business along. The strategic mission will provide a clear picture of that long-range outlook, providing an overview of what the business wants to achieve. This will serve as a definitive and clear guide for the organization and its members as they carry out the tasks indicated in the plan.

A strong strategic mission should have all, if not most, of the following:

• An indication of a long-range perspective.
• Core values of the organization.
• Nature of the business.
• Current position of the organization in the market.
• Vision of the organization.

3. Define and set the strategic objectives

Strategic objectives represent what the organization must achieve in order for it to become competitive – or to remain competitive – and ensure sustainability of the business over the long term. They come in the form of specific responses or aims of the organization to address issues regarding competitiveness, long-term sustainability and other business advantages.

If the strategic mission will serve as a directional guide for where the business wants to be, the strategic objectives will serve as a directional guide on how the business will make use of its resources and carry out key functions and activities.

In essence, defining the strategic objectives involves identifying performance targets that the members of the organization will aim for, and these targets are clearly geared towards the attainment of the goals.

4. Define the competitive strategy

The next step in strategy formulation is where the organization will start identifying and coming up with its long-term plan to gain advantage – and maintain it – over the competition. This is known as the competitive advantage, and the plan is referred to as the competitive strategy.

There are three factors at play when determining the Competitive Strategy of the organization.

The industry that the organization belongs to

This involves taking a look at the industry or the marketplace and its various aspects.

• Market size
• Market growth trends
• Competition
• Movements in and out of the market
• Threats to the industry

The competitive position of the organization

Gain an understanding of the operations of competitors, such as their products and services, their marketing campaigns, and their customer bases.

Analyze how the competitors are able to deliver value to their customers through their product offerings.

Identify the strengths and weaknesses of competitors, and analyze how they are opportunities and threats to the organization.

The strengths and weaknesses of the organization

The organization also has to look internally and look into itself. In particular, it has to identify its strengths and acknowledge its weaknesses. By doing so, defining a competitive strategy will be easier.

5. Implementation of strategies

Organizations may have come up with very good strategies, but they will be completely wasted and will benefit no one unless they are implemented.

Identify the tactics or methods that will be used in the implementation of the chosen strategies. As the implementation moves forward, management may spot some methods or tactics that are not working, or they may realize that another tactic may work better. In that case, the corresponding adjustments may be made.

6. Evaluate progress and effectiveness

It is important to track the progress of the implementation of the strategies. Are they being properly implemented? Are they being measured properly? Are the safeguards to ensure reliability of the results in place? Feedback plays a very important role in the evaluation stage, providing the strategists with insights on how the implemented strategies are faring.

Some guidelines to ensure this strategy is effective are:

1. Set measurable, achievable goals by ensuring they are clear, structured and measurable it will be easier to accomplish your purpose.
2. Base plans on facts and validated assumptions through market research.
3. Use simple, clear and precise plans to detail what benefits you will offer your clients and how. Customers are driven by needs and desires so a clear plan will target those to gain customer loyalty.
4. Have a feasible plan by using research to decide the best way to connect with and engage your ideal customers and then implement a plan your company can afford and carry to fulfillment to do so.
5. Ensure control and flexibility by customizing your business plans and goals to match the needs of the customers, as they determine the success or failure of your company.