Strategic Planning

All marketing begins with market analysis and then putting a strategy in place that acknowledges the realities of the market and the opportunity. In 1979 Michael Porter, a professor at Harvard Business School, suggested a model for analyzing markets that has continued to endure and be used by businesses around the globe.

The following video presents the model. As you are viewing the video think about it in its broader context?

1. Why should businesses use market analysis as the basis for their marketing strategy and plans?
2. What kinds of things might this analysis cause a company to do differently?
3. What might it help you optimize? What might it help you avoid?

Organizations typically develop plans and strategies that outline how they decide which products and services to develop, price, promote, and sell. Such a plan must take into account a company’s current internal conditions, such as its resources, capabilities, technology, and so forth. The plan must also take into account conditions in the external environment, such as the economy, competitors, and government regulations that could affect what the firm wants to do. Organizations must also offer value to customers and graduates must provide value to their employers. As such, the value proposition becomes the basis for developing strategies. Given its importance for both organizations and students, we begin with the value proposition and then discuss the strategic planning process.

Just as your personal plans—such as what you plan to major in or where you want to find a job—are likely to change, organizations also have contingency plans. Individuals and organizations both must develop long-term (longer than a year) strategic plans, match their strengths and resources to available opportunities, and adjust their plans to changing circumstances as necessary.