STRATEGIC MANAGEMENT

CHP 3

Models of Strategic Marketing

1) Henry Mintzberg
The Entrepreneurial Model refers to a business framework where the focus is
on innovation, opportunity recognition, and rapid growth. This model is
commonly adopted by startups and small businesses aiming to disrupt
traditional industries and carve out new markets. Key elements of the
entrepreneurial model include
Aims to Innovate and Have First Mover Advantage:
The entrepreneurial model often focuses on creating new products, services, or
business models that set a company apart from competitors. By being the first
to introduce an innovation, a business can capture market share before others
follow, gaining the first-mover advantage. This helps establish brand
recognition and customer loyalty early on.
Growth Strategy Implemented:
Entrepreneurs often have a growth-oriented mindset. They continuously seek
to scale their business through new products, markets, or customer segments.
Unlike models that focus purely on stability, this one pushes for expansion,
whether through organic growth or strategic partnerships.
Not Focused on Problems but Actively Looking for New Opportunities:
Instead of focusing on existing issues or inefficiencies, this model seeks out
new opportunities in the market. Entrepreneurs using this approach are more
interested in where they can innovate or create value rather than fixing
problems within their current operations.
 Proactive Approach:
Businesses operating under this model are proactive, meaning they take
initiative rather than waiting for market changes to force their hand. They
continuously monitor trends, customer needs, and technological
advancements, positioning themselves to capitalize on emerging opportunities
before competitors do.

The Adaptive Model is a business framework that emphasizes reacting to

changes in the environment, particularly when there are existing problems that
need to be addressed. Unlike more proactive models, the adaptive approach
focuses on stabilizing current market conditions by solving these issues.
Key Elements of the Adaptive Model:
1. Aim to Stabilize the Market by Solving Existing Problems:
The primary goal of the adaptive model is to address and resolve current
market challenges or inefficiencies. Rather than seeking new
opportunities like in the entrepreneurial model, the focus is on creating
stability by mitigating existing problems, such as supply chain
disruptions, regulatory changes, or shifts in consumer behavior.
2. Stabilization Process:
The model involves a stabilization process, which often includes
restructuring operations, adjusting business strategies, or modifying
products and services to align with market demands. Companies using
this model aim to restore balance and continuity in the business
environment, ensuring that disruptions are minimized, and long-term
sustainability is achieved.

3. Reactive Approach:
Unlike proactive models, which anticipate and prepare for future trends,
the adaptive model reacts to issues as they arise. Companies monitor
market conditions closely and respond to external pressures or crises.
The goal is to implement changes that bring immediate improvements
rather than speculating on potential future changes.
In summary, the adaptive model is problem-focused and works to stabilize a
fluctuating market by reacting to current challenges, and using flexible
strategies to keep businesses aligned with ongoing changes. It’s more about
maintaining balance than pursuing aggressive growth.

SWOT MATRIX

Strengths: Weaknesses:
1. Favourable Location: 1. Uncertain Cash Flow:
Having a business in a Inconsistent cash flow can limit
favourable location can provide a company’s ability to invest in
access to key markets, reduce growth, manage operations
transportation costs, and smoothly, and handle
enhance visibility. It offers a unexpected expenses. It adds
strategic advantage, whether financial instability and risks to
due to proximity to suppliers, ongoing projects.
customers, or logistical hubs. 2. No Dependable Employees:
2. Excellent Distribution A lack of reliable and
Network: committed employees can lead
An effective and efficient to operational inefficiencies,
distribution network ensures reduced productivity, and
timely product delivery, wider challenges in maintaining
market coverage, and service quality. High employee
operational efficiency. It helps turnover can also disrupt the
the company reach customers continuity of business
quickly and maintain a processes.
competitive edge in the
market.
3. Research and Development
(R&D):
Strong R&D capabilities allow
companies to innovate,
improve products, and stay
ahead of competitors. It
provides a long-term
advantage by enabling the
business to adapt to market
changes and create new
solutions.
 Opportunities: Threats:
1. Industry Trends: 1. Unfavorable Political
Capitalizing on emerging Environment:
trends in the industry, such as Political instability or
shifting consumer preferences regulatory changes can
or regulatory changes, can introduce uncertainty,
create new growth avenues. increasing the risk for
Staying updated on trends businesses. Tariffs, sanctions,
helps companies evolve and or changing laws can
cater to market demands negatively affect operations
effectively. and profitability.
2. Technological Advancements: 2. Uncertain Competition:
Leveraging advancements in Emerging competitors or
technology can streamline unpredictable competitive
operations, reduce costs, and actions can disrupt market
introduce new business share. A constantly evolving
models or products. Innovation competitive landscape requires
through technology is key to businesses to adapt quickly to
staying competitive and maintain relevance.
improving customer
experiences.

LOGICAL INCREMENTALISATION: is a strategy where businesses make decisions

gradually, using small, manageable steps rather than implementing a large,
comprehensive plan all at once. This approach is particularly useful in fast and
uncertain environments, where flexibility and adaptability are essential.
Key Points:
1. Small, Manageable Steps:
Companies using this approach avoid large, risky changes and instead
make incremental adjustments. This allows for fine-tuning and reduces
the risk of failure, as each step can be evaluated and adjusted based on
feedback and outcomes.
2. Suited for Fast and Uncertain Environments:
In rapidly changing markets or industries, comprehensive, long-term
 plans can quickly become obsolete. Logical incrementalism is better
suited for such environments, as it allows businesses to remain agile and
responsive.

3. Integration of Learning and Strategy:

The process is iterative, meaning that each small step offers an
opportunity to learn and gather new information. This learning is then
integrated into future strategy development, allowing the business to
adapt its direction over time.
4. Efficient Adaptation to Change:
Since changes are implemented in small steps, businesses can swiftly
respond to unforeseen challenges or opportunities without having to
overhaul their entire strategy.

Types of Corporate Portfolio Analysis [CPA]

BCG Matrix: Boston Consulting Group provides a graphic Representation of an

organization to examine the different businesses in its portfolio based on their
relative market share and industry growth rates
FOUNDED – BRUCE HENDERSON
The BCG Matrix divides the portfolio into four quadrants, each representing a
different strategic outlook.

STARS: represent products or business units with a high market growth rate
and a high relative market share. These are the growth drivers of a company's
portfolio. Stars require substantial investment to sustain their growth trajectory
and capture the market's potential. While they generate revenue, they also
consume resources to fuel their expansion. Companies should develop
strategies to support and maximize the potential of stars, as they can become
future cash cows.

CASH COWS: are products or business units with a low market growth rate
but a high relative market share. These offerings have reached maturity and
generate significant cash flow for the company. Cash cows typically have
established customer bases and enjoy economies of scale, resulting in healthy
profit margins. Finance professionals should focus on sustaining and extracting
value from cash cows to fund other areas of the business.

QUESTION MARKS, also known as problem children or wildcards, are

products or business units with a high market growth rate but a low relative
market share. They require careful analysis and strategic decision-making due
to the uncertainty surrounding their potential. Question marks may either
become stars or fail to gain market traction. Companies need to assess the
viability and potential of question marks and allocate resources accordingly.

DOGS: represent products or business units with both a low market growth
rate and a low relative market share. These offerings have limited potential and
may not generate substantial returns. Companies should evaluate dogs to
determine if they can be revitalized or if divestment is a more appropriate
course of action.
 GATORADE Diet Pepsi
(Star Product) (Question Marks)
Lays\Regular Pepsi Crystal Pepsi
(Cash Cows) (Dogs)

GE NINE CELL MATRIX: industry attractiveness indicating market size and

growth size, industry profit margin, economies of scale, and human impact.
Business strength\competitiveness: Relative market share, profit margin,
ability to complete or competitive advantage, knowledge of market and
technological quality.
Green zone (invest/ Grow): Suggest you to “ go ahead” – to grow and build –
indicating expansion strategy – business in green zone attracts major
investment

Red Zone: Indicates the need for turnover strategies such as liquidation,
divestment, and Retrenchment
Yellow Zone: Cautions you to “ Wait and see” , indicating hold and maintain
strategies aimed at stability.

• Invest/Grow

Businesses should invest in these segments if a product, service, or business

unit falls into this category, as they will give the highest returns. Since these
products will operate in a growing market, they will require cash to sustain
the market share.
Businesses should ensure there are no constraints for these products to grow.
Investments should be provided for doing R&D, advertising, acquiring new
products or services, and increasing the production capacity to meet the
market demands.

• Selectivity/Earnings
Companies should invest in these segments if they have money left over
within their business unit and believe they will generate cash in the future.
These products have uncertainty and thus are given the least preference.
If there are no dominant players in the industry, the market is enormous; the
business should invest if the product falls in this segment.

• Harvest/Divest
If a product is in an unattractive industry, has no competitive advantage, and
performs poorly, it falls into this category. Businesses that fall into this
category should be harvested or divested.
If the products under this segment generate cash, they should be treated like
“Cash Cows” in the BCG Matrix. The excess cash should be invested into other
segments (harvest). It is worth investing in this segment if the cash generated
is always greater than the investments.
If the product is losing, the business should sell the loss-making unit and
invest elsewhere (divest).

• Five Forces Analysis is a strategic apparatus intended to give a

characteristic diagram instead of a nitty-gritty business analysis
strategy. It helps survey the qualities of a market position in light of five
fundamental forces. Accordingly, five forces work best when taking a
gander at a whole market segment instead of your business and
competitors.

1. Supplier power: An assessment of how easy it is for suppliers to drive up

prices. This is driven by the: number of suppliers of each essential input;
uniqueness of their product or service; relative size and strength of the
supplier; and cost of switching from one supplier to another.
2. Buyer power: An assessment of how easy it is for buyers to drive prices
down. This is driven by the: number of buyers in the market; importance of
each individual buyer to the organisation; and cost to the buyer of switching
from one supplier to another. If a business has just a few powerful buyers,
they are often able to dictate terms
3. Competitive rivalry: The main driver is the number and capability of
competitors in the market. Many competitors, offering undifferentiated
products and services, will reduce market attractiveness
4. Threat of substitution: Where close substitute products exist in a market,
it increases the likelihood of customers switching to alternatives in response
to price increases. This reduces both the power of suppliers and the
attractiveness of the market.
5. Threat of new entry: Profitable markets attract new entrants, which erodes
profitability. Unless incumbents have strong and durable barriers to entry, for
example, patents, economies of scale, capital requirements or government
policies, then profitability will decline to a competitive rate. These forces
include the number and power of a company's competitive rivals, potential
new market entrants, suppliers, customers, and substitute products that
influence a company's profitability.
Five Forces analysis can be used to guide business strategy to increase
competitive advantage.

McKinsey 7S Model/Framework
1. Structure:
• Hierarchy: The chain of command and reporting relationships
within the organization.
• Division of labor: How tasks are divided among employees.
• Span of control: The number of people a manager can
effectively supervise.
 • Centralization: The degree to which decision-making authority
is concentrated at the top.
2. Strategy:
• Competitive advantage: The unique value proposition that sets
the company apart.
• Goals and objectives: The specific targets the company aims to
achieve.
• Business model: The way the company generates revenue and
creates value.
3. Systems:
• Processes: The workflows and procedures that govern
operations.
• Technology: The tools and systems used to support business
activities.
• Information flow: How information is collected, stored, and
shared.
4. Skills:
• Competencies: The abilities and knowledge of employees.
• Training and development: Programs to enhance employee
skills.
• Talent management: The process of attracting, developing, and
retaining top talent.
5. Style:
• Leadership behavior: The way leaders interact with employees
and make decisions.
 • Corporate culture: The shared values, beliefs, and norms that
guide behavior.
• Decision-making style: The approach used to make choices.
6. Staff:
• Human resources: The policies and practices related to
employees.
• Employee engagement: The level of commitment and
satisfaction among employees.
• Diversity and inclusion: The company's efforts to create a
diverse and inclusive workplace.
7. Shared Values:
• Mission: The company's purpose and reason for existence.
• Vision: The desired future state of the organization.
• Values: The guiding principles that shape behavior and
decision-making.

Strategy and Project Implementation

- Activities and choices required to execute the action plan
- Steps: Initiation and communication of strategy
Certainly! Here’s an expanded version while keeping the pointers the
same:

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**Strategy and Project Implementation**

a) **Formulating Plans to Implement Strategy**

- Develop detailed plans to operationalize the strategic objectives.
This includes outlining specific actions, setting clear milestones, and
establishing timelines for each phase of the strategy. Ensure that the
plans incorporate risk management strategies to address potential
challenges and changes in the external environment.

b) **Analyzing the Skill Set and Staff Required to Implement**

- Conduct a thorough assessment of the current skill set within the
organization and identify any gaps relative to the requirements of the
strategic plan. Determine the additional skills and expertise needed,
and evaluate whether existing staff can be upskilled or if new
personnel need to be recruited to fulfill these requirements.

c) **Training and Development**

- Design a comprehensive training and development program to
equip staff with the necessary skills and knowledge. This program
should include workshops, seminars, and on-the-job training
opportunities. Regularly evaluate the effectiveness of the training
and adjust it based on feedback and evolving needs.

d) **Resources to be Arranged**
- Identify all resources required for the successful implementation
of the strategy, including financial, technological, and human
resources. Develop a detailed plan for resource allocation and
procurement, ensuring that resources are acquired efficiently and are
available when needed to avoid any delays.

e) **Procedures to be Followed**
- Establish and document clear procedures and protocols that must
be adhered to during the implementation process. This includes
defining roles and responsibilities, communication channels, and
reporting structures. Ensure that all stakeholders are familiar with
these procedures and understand their responsibilities.

f) **Review**
- Implement a systematic review process to monitor and evaluate
the progress of the strategy implementation. Regularly assess
performance against the established milestones and objectives, and
identify areas for improvement. Use this feedback to make informed
adjustments and ensure the strategy remains aligned with
organizational goals.

### **Structural Implementation**

1. **Organizational Structure**
- **Hierarchical Structure**: A traditional model featuring multiple
levels of management with a clear chain of command. Employees
report to supervisors who, in turn, report to higher-level managers,
creating a structured pyramid. This structure emphasizes authority
and control.
- **Flat Structure**: Characterized by a minimal number of
hierarchical levels between staff and managers. It promotes
employee autonomy and faster decision-making, enhancing
communication and collaboration within teams. It is often used in
smaller or more innovative organizations.
- **Matrix Structure**: Combines functional and product-based
structures, with employees reporting to both functional managers
and project managers. This approach supports flexibility and
responsiveness to changing project needs but can lead to confusion
and conflicts in authority.
- **Divisional Structure**: Divides the organization into semi-
autonomous units based on product lines, geographic regions, or
customer groups. Each division operates like a separate business,
allowing for specialization and better focus on specific markets or
products.

2. **Roles and Responsibilities**

- **Job Description**: A comprehensive document outlining the
specific duties, responsibilities, qualifications, and reporting
relationships for a role. It helps in setting expectations and serves as
a basis for recruitment and performance evaluation.
- **Role Clarity**: Ensures that each employee’s responsibilities are
well-defined, reducing overlap and confusion. Clear roles support
effective teamwork and accountability, and facilitate smoother
operations.
 - **Performance Metrics**: Defined criteria used to evaluate
employee performance and productivity. Metrics can include
qualitative and quantitative measures, such as goals achieved,
efficiency, and overall contribution to the team and organizational
objectives.

3. **Process & Procedure**

- **Standard Operating Procedure (SOP)**: Detailed instructions
designed to achieve uniformity in performing specific tasks. SOPs
ensure consistency and quality in operations, reduce errors, and
provide a basis for training and compliance.
- **Workflow Design**: The process of creating a systematic
sequence of tasks and activities that contribute to achieving specific
objectives. Effective workflow design improves efficiency, reduces
redundancy, and enhances coordination among team members.
- **Communication Protocols**: Established guidelines for
exchanging information within the organization. Protocols define
how information is shared, the format of communication, and the
channels used, ensuring clarity and reducing misunderstandings.

4. **Technology and Systems**

- **Information System**: Integrated systems used to collect,
process, and manage data. These systems support decision-making,
streamline operations, and facilitate communication within the
organization. Examples include enterprise resource planning (ERP)
systems and customer relationship management (CRM) tools.
 - **Infrastructure**: The underlying physical and virtual resources
required to support organizational operations. This includes
hardware, software, networks, and facilities. Effective infrastructure
supports system reliability, data security, and operational efficiency.

5. **Governance and Compliance**

- **Policies and Procedures**: Formal guidelines and rules that
govern organizational operations and employee behavior. Policies
ensure consistency and legal compliance, while procedures provide
step-by-step instructions for carrying out tasks.
- **Risk Management**: The process of identifying, assessing, and
mitigating risks that could impact the organization’s operations or
objectives. Effective risk management helps prevent losses, manage
uncertainties, and protect assets.
- **Audit and Control**: Mechanisms for monitoring and
evaluating adherence to policies and procedures. Audits help identify
areas of non-compliance, inefficiencies, and potential improvements,
while control measures ensure corrective actions are taken.

6. **Change Management**
- **Transition Planning**: The process of preparing for and
managing changes within the organization. This includes developing a
clear plan, communicating changes to stakeholders, and ensuring a
smooth transition with minimal disruption.
- **Training and Development**: Programs designed to enhance
employee skills and knowledge in response to changes. Training
ensures that employees are equipped to handle new technologies,
processes, or roles, promoting adaptation and continuous
improvement.
- **Feedback and Adjustment**: The practice of gathering input
from stakeholders and making necessary adjustments to improve
processes, systems, or organizational practices. Feedback helps in
identifying issues and implementing solutions for better outcomes.

7. **Strategic Alignment**
- **Business Strategic Integration**: Aligning organizational
structure, processes, and resources with the overall business
strategy. Ensuring that all aspects of the organization support
strategic objectives enhances coherence and effectiveness in
achieving goals.
- **Resource Allocation**: The process of distributing resources,
including financial, human, and material assets, in alignment with
strategic priorities. Effective resource allocation ensures that critical
areas receive the support they need to drive organizational success.