Strategic Management

2334 WordsJan 12, 201310 Pages
Strategic planning is an organization's process of defining its strategy, or direction, and making decisions on allocating its resources to pursue this strategy. In order to determine the direction of the organization, it is necessary to understand its current position and the possible avenues through which it can pursue a particular course of action. Generally, strategic planning deals with at least one of three key questions: “What do we do?”, “For whom do we do it?”, and “How do we excel?”. In many organizations, this is viewed as a process for determining where an organization is going over the next year or more typically 5 years (long term), although some extend their vision to 20 years. Organizations sometimes summarize goals and…show more content…
Market penetration involes heavy advertising to promote and build product differentiation. For example, Intel has actively pursued penetration with its aggressive marketing campaign of "intel inside". In a mature industry, advertising aims to influence customers' brand choice and create a brand-name reutation for the company and its products. In this way, a company can increase its market share by attracting its rival's customers. Because brand-name products often command premium prices, building market share in this situation is very profitable. Market development finds new market segments for a company's products. A company pursuing this strategy wants to capitalize on the brand name it has developed in one market segment by locating new market segments in which to compete just as San Miguel Corporation do by entering many different segments of alcohol beverages. In this way, companies can leverage the product differentiation advantages of their brand name. Product development is crucial for maintaining product differentiation and building market share. For instance, the laundry detergent Tide has gone through more than 50 changes in formulation during the past 40 years to improve its performance. The product is always advertised as Tide, but it is a different product each year. Refiningn and improving products is a crucial strategy companies use to

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