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CHAPTER
2
Marketing Strategy
After reading this chapter, you should be able to:
• Understand the scope of strategic marketing planning
• Identify broad organizational market strategy alternatives
• Describe the value of alternative portfolio models
• Appreciate the factors that affect the level of competitive intensity within an industry
• Understand the essential components of marketing strategy formulation
■ Strategic Planning Process
In order to respond to the opportunities and challenges of the marketplace, most or-
ganizations engage in a process of strategic planning. Strategic planning has been de-
fined as a process that describes the direction an organization will pursue within its
chosen environment and guides the allocation of resources and efforts.
1
The strate-
gic planning process is shown in
FIGURE 2-1 as comprising four steps. It is within the
context of this strategic plan that the functional areas of marketing, finance, human
resources, and operations develop their own plans, as shown in
FIGURE 2-2.
To develop an effective strategic plan, an organization must first define its mis-
sion. Second, it must conduct a situational assessment of the threats and opportuni-
ties to which the organization can respond in light of its mission. At this stage, the
organization must also assess its own distinctive competencies. Last, the organization
must establish a set of priorities based on organizational objectives that align with the
mission. Once these steps have been taken, the organization can then determine
which strategies to pursue when competing in the broader market.
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