1. 1
Chapter 12
Strategic Planning

2. 2
Learning Objectives
Outline the process of strategic planning in
the context of the global marketplace.
Examine both the external and internal
factors that determine the conditions for
development of strategy and resource
allocation.
Illustrate how best to utilize the environmental
conditions within the competitive challenges
and resources of the firm to develop effective
programs.
Suggest how to achieve a balance between
local and regional/global priorities and concerns
in the implementation of strategy.

3. 3
Strategic Planning
Globalization
The Strategic
Planning
Process

4. 4
Globalization
Globalization reflects a business
orientation based on the belief that
the world is becoming more
homogeneous and that distinctions
between national markets are not
only fading but, for some products,
will eventually disappear.

5. 5
Globalization Drivers
Both internal and external factors
will create favorable conditions for
development of strategy and
resource allocation on a global
basis.
These factors can be divided into:
Market Factors
Cost Factors
Environmental Factors
Competitive Factors

6. 6
Market Factors
The world customer gains new
meaning.
Developed infrastructures lead to
attractive markets for other products.
Similarities in demand conditions
facilitates product design.
Channels of distribution are becoming
more global.
Technology changes the landscape of
markets.

7. 7
Cost Factors
Two powerful
cost-related
globalization
drivers.
Cost inefficiencies
Duplication of effort

8. 8
Environmental Factors
Removal of physical, fiscal, and
technical barriers to further facilitate
globalization of markets.
Rapid technological evolution
contributes to globalization efforts.
Smaller bureaucracies of mininationals
facilitates new product development
and allows for opportunities to seize
new markets.

9. 9
Competitive Factors
Companies may have to
be the first to do
something new, or to
preempt competitors’
moves.
Market presence may be
necessary.

10. 10
The Strategic Planning
Process
Formal strategic planning contributes to:
Financial Performance
Non-financial
Objectives

11. 11
The Strategic Planning
Process Involves:
Adjusting the core strategy.
Formulating global marketing
strategy.
Developing global programs.
Implementing global programs.

12. 12
Core Strategy
Assessing and Adjusting:
Necessary Participants:
Executives from marketing,
production, finance, logistics
and procurement.
Forces determining business
success are common to
different countries.
Companies must
assess their own
readiness for
necessary
moves

13. 13
Formulating Global
Strategy
The choices:
Cost LeadershipCost Leadership
DifferentiationDifferentiation
FocusFocus

14. 14
Country-Market Choice
Three factors should determine
country selection:
The stand-alone attractiveness of a market.
Global strategic importance.
Possible synergies

15. 15
Segmentation
The recognition that groups
within markets differ sufficiently
to warrant individual approaches.
Allows global companies to take
advantage of the benefits of
standardization.
Involves looking at markets on a
global or regional basis.

16. 16
Developing Global
Programs
Decisions involved in developing
a global program.
The degree of standardization in the
product offering.
The marketing program beyond the
product variable.
Location and extent of value-adding
activities.
Competitive moves to be made.

17. 17
Product Offering
Product
standardization may
result in significant
cost savings.

18. 18
Marketing Approach
Uniformity is sought especially in
elements that are strategic in nature,
whereas care is taken to localize
necessary tactical elements.
Glocalization

19. 19
Location of Value-Added
Activities
Cost Reduction: Pool ProductionPool Production
Exploit Factor CostsExploit Factor Costs
Concentrate ActivitiesConcentrate Activities

20. 20
Competitive Moves
Global companies may
have to respond to
competitive moves a
variety of markets.
Cross-subsidization may
offer competitive
advantage.

21. 21
Implementing Global
Programs
Successful companies strive
to balance local and global
concerns.
Too much local production may reduce
import positioning.
Too little planning involvement by the
country organization may lead to NIH.

22. 22
Avoiding The
Not-Invented-Here Syndrome
Ensure that local
managers participate in
the development of
strategies and programs.
Encourage local
managers to generate
ideas.
Maintain local and global
product portfolios.
Allow local managers to
control budget.

23. 23
Localizing Global Moves
The role of headquarters staff should be one of
coordination, and leveraging the resources of
the corporation.
Globalization calls for the centralization of
decision-making authority beyond that of the
multidomestic approach.
Executing global account management
programs builds relationships with customers
and allows for development of internal systems
and interaction.
Decision-making in global companies supports
the goal of treating the world as a single
market.