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Strategy Goal and Strategy Formulation; Implementation and Best

By Zachary Morris,2014-05-17 01:14
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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

    1Strategic Planning: Goal and Strategy Formulation;

    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.

    ? This process is often called Management by Objective or MBO

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:

    ? An Overall Cost Leadership Strategy

    ? A Differentiation Strategy

    ? A Focus Strategy

    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.

     1 Philip Kotler Marketing Management 1997

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:

    ? Product and or service alliances- licensing; joint marketing such as Amex

    and Mbna Bank; Pixar and Disney until recently

    ? Promotional alliances- Burger king and Disney Lion King

    ? Logistics-Abbott Labs warehousing and distribution and 3m medical

    supplies

    ? Pricing- Amex hotel and rental car discounts

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.

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