30

strategic marketing: decision making and planning

82

R.

i
)r, Mo*eFDriven Monogement: lJsing the New Motketing Concept to Crte o Custametoiented

usrness

McKemo 'Morketing is every.(ing', tlorvord (evieq loruory-Februory 1 99 I p. g ,

morketing

83

, no. ,
t fhe outhor ond he new

Wiley & Sons, New york, 1994. ,The S. Doy, copobiltties of morkef
tions', Journol of Morkelng,

vol 59,

pp.37-52

84

25

A K Kohli ond Bl joworskt, ,Mo&et orjeniotion: -he.co"shuct, resrch prposillo-s, ono rorqgg.6J inolicotions', Journol of Md*eting. vol. 5, Apil 1990, pp. t-8.

Americo Morkeiing Assocotiont defiition of morkefing lirst published in Moletr'ng News, I Morch
I

985.

85

orkefing taber 2OO7

No,vero.d

F Slo.e.,,T\eelectolo morker

orientofon on busines profitobi iry,, Journol

of

Morketing, vol.54, Ocrober I 990,

pp 20-35

77

Far urther inlarmofo efer to.] Doroch, M.p Miles, A. jordine ond E.F. Cooke, ,-lhe 2OO4 AMA definifion of morketing ond its relot onship b o morker orienloton: An extension of Cooke, Royburn ond Abercombe { I 9921,, Jo urnal of Morketing fheory,

vol I 2, no 4,2004, pp 29-38

78

P Koile Pin.ipls af Mo&etng, prentce.l-lqll,

Englewood Cliffs,

Nl, l9gO,

t.

ocodemi
Process.

29 t

J.U Forey ond c E Weoste.J,, gO'porole crllL.e, c-slo-er orieltotiol, ond

Deshoono
, n

Joponese firms: A quodrod onolysis,, lournol of Morketing, vol. 57, 1993, p. 27

innovolivene$

strotegy', Numb-^r

a7

Strategic thinking and strategic decision making

Strtegic thinking . . . is about synthesisft involves intuition and creatvity.
Henry ftlintzbergl

80
8

ond A. Sohoy, ,MorkeFdriven lournol of the Acadeny of .28,no.1,2AOO,pp 46_7

,MorledriveJowoski, Kohli ond Sohoy, driving morkets', p 45

versus

slrolegy' , laurnol o[ Economics & Monagement Srotegy,1996. vor 5. no. , pp 5_4

chaptet 2
As wos discussed n chopter r, the role of morketng hos chonged considerobly over lhe lost severol decodes. lt wos concluded thot morketng should ploy o moior role in creoling, communicoting, derivering ond sustoining vorue to the orgonisotion's customers ond ils oTher slokeholders. A key roe for morketng is to emphosise the importonce of the

strategic thnkng and strategic decision making 33

Strategy planning and strategic management - an overvew

The genesis of the concept and practice of strategic planning can be traced back ro ancient times The term 'strategy' derives from the ancient Greek worcl strategos men' ing the art of the general In this sense the term was used o describe the deployment of military forces by a commande. The word had disappeared from usage until the eighteenth cenrury, when it was revived by military theoreticians such as the prussian
general Carl von Clausewitz (1780-1831), Clausewitz's famous book Vom Kriege (On 'war) became the bible of straregy and has signicantly affected military thinking since the time of its publicaton He defined strategy as the employment of batcles to gain the end of war Late in the nineteenth centrry, as society had grown to be more complex, lhe concept of strategy was broadened to describe the management of national policy Tems such as 'grand strategy' and 'higher strtegy' were used in the early Nvenrieth centlrry to describe the art of employing national resources for the achievement of national aims or objectives The term 'plan' originates fom the Latin word planus meanine plane, Ievel or flat surface It was adopted into the English language during the seventeenth century in relerence to maps, drafs, blueprints and drawings on flat surfaces However, while it can be seen that the terms ,strategy, and ,planning, were com_ monplace many years ago it was nor until the late 1950s and early 1960s thar strategic planning evolved as a b'siness process Drrring the second !orld var planning became a highly developed eld of endeavour and this experrise was rransfered ro br:siness in America in rhe form of annual budgeting during the 1950s. This form of planning provided a means for control whereby all faces of an organisation's operations were reduced to rhe level of a frnancial problem The focus for these companies was towards projected earnings growth rate and ocher frnancial objectives. The nexr phase was the exrension of annual budgeting to long-range forecasting; frve-year planning was popularised. Like budgering, forecast-based planning (also referred ro as long-range planning) was essentially n extrapolation of past trends. lnitially these forecasrs were internally focused, bur by the 1960s advanced forecasting techniques such as trend analysis and regression models were increas-

SCs (cuslomers, competitors, compony, colloborotors ond context) in underpinning on orgonisotion-wide skotegy development process.This choplrer therefore ploys o pivotol role in +hs book os il presents o model of the strotegic morketing monogement process

as o port of on orgonisotion-wide opprooch to strotegc monogement.

became eevared in importance as more and more organsations '-rarketing attempted to become 'customer oriented, However, marketing,s moment of glory provecl to be shorlived as testified by two pre-eminent marketing acadeics, George Day and Robyn rx/ensley rn a 7983 arricre in the Journar of Mrketing, Day ancl \ensley observed: In retrospect, the 1960s was the ea of markering,s gretest influence and promise, when a marketing orienttion was accepted as an essential element of profitable progress in
During the 1970s the influence of marketing noticeably wanecl, while planing was in ascendance Increasngry, the marketing pran was restricrecr to r tlctical suppon role at rhe band level (Hopkins 19g1), ancl thereby lost its earlier
str arc.!'ic

of

an end and the much-vaunted American mrnagemenr stylc was being blamecl for the collnrry's economic downfall !ith the aclvantage of hinclsight it can be observed that the American sryle of management ti'om the 1950s ro the 1970s was primarily based on the r''ilitary model of 'commancl ancr conrro| strategic planning wa.s rargely a top,crown process whereby the job fb senior managers was ro set a nurber oi objectives for tire orgnnisation to achieve ancL lormulate strategies for the next .layers of managernent to implement The deveopment of the concepr and practice of straregic pranning during the t960s and 1970s coincided wirh the growing popr,rlarity of h markeing .oi."p, (as was discussed in chapter 1) As a conseqllence during the 1960s the process

strategic planning is arguably one of the most controversial and misunclerstood management concepts of all. strategic planning was introcluced in the 1g60s and during rhe 1970s it became a 'musr have' business process for most leacling uS b'siness organisations Hov/ever, during the 1980s srrategic planning fell our of favour The period of post-Second vorld \l'ar growth anc American inclusrr.ial clominance had corne ro

I I
I

I I

crowing

rnar*ets
2

slrrtegic tbcLrs

ingly being used

l)trring rhc l9t0s marketing's rore was increasingly seen to be twoford: strategic (longerterm ancl holistjc cLccisions concerning the fuure direction for an organisation) nd taccal (short term, such xs quaferly or annual decisions). In mlny organisations this meant that higherlevel url(cting clecisions sr-Lch as prodr,rct consiclerations, brond positioning, 'ixby strtegic pranners market segmenhtion ncr trrgeting were macre eier or y a senior management ream Marketing cLcptments were requirccl to provicle specialist ltrnctional expenise in areas such as markcring col.nnLrniction ancl market research Marketing planning increasingly came to be seen to play a zrcricar support rore rather than u"t tg *re " forefron of providing srrategic diecion for the organisarion Given that higherlevel marketrng decision making and strategy developmenr is no longer regarded to be the exclusive domain of marketer.s, this chapter discusses the rore of markecing q/ithin the context of the broader discipline of strategic plann.ing or, as it is often referred to, strategic management

At about the same time managers were becoming increasingy aware of the impact of external foces on organisational performance. In 1957 philip Selznick, in a book that was to become the forerunner of strategic planning, introduced the notion ol
distinclive comPetence ancl also he neecl for organisations to match their internal states

with exernal expectarions This concept was furrher popularisecl in the early 1960s by
Learned, Andrews and other academics associated wirh rhe Haward, Business School with the introdrLction of rhe famous swoT model (strengrhs, weaknesses, opportunities and threats), wl]ich was to become a key platform in the evollrtion ol strategic

planning practices In rhe same period the worcl 'strategy' came inro the vocabulary of btrsiness with the pr-rblication of A D Chandler's seminal book, StrateEg ancl Struchtre, in 1962 At that point of time various business functions were concluctecl more or less independently from one another. chandler argued that these functions neecled o be inregrated and that organisations would need to adopt a long-term coordinated strategy to provide struchrre,

34

strategic mrketng: decision making and planning

chapter 2

strategic thinking and strategic decson making 35

direction and focus He caprured this rgument succincdy with three words thar have become one of he most quoted business manrras: 'srructure follows strategy,

function in large conglomerate the stralegies devised by these to managers of newly formed
eloped during rhe lare 1960s by

1 Rational processcs of strategy formation. A starting point for what became a longrunning debate about how strategies are developeci is Charles Lindblom,s often-cited article, 'The science of muddling through', published .in 1959 Lindblom argued rhat rationalltechnical approaches ro organisational decision making were not possible and that, alternatively, strategic decisions were made by 'baby steps, or by ,muddling through' He contended that, in most circumstances, decisions were evolutionary rather than revolutionary. This issue was reignited two decades later by James Brian Quinn in his 1978 journal article, 'Srrategic change: logical incremenralism, euinn argued that external or internal events, over which management hd no control, would often precipitte urgent piecemeal decisions o be made that would have major impacts on the futLre direction of the organisation He contended that:
The processes used to arrive al the total sttegy are typically fragmenred, evolurionary, ancl largely real saregy tends ro euolue as internal decisions and external evenrs flow together to ceate a new, wiclely shared consensus for accion among key membes of the top management team 4

intuitive

Box

2.1 Strategic business unit defined

The arguments put foruard by Lindblom and Quinn were sr.Lpported by a number of Iongirudinal case stlrdies and other research investigations during tl-re 1970s and 19gOs 5

A srategic business unir was defined a ree-standing business within a rarger organisarion meering rhe following crireria:
ro have a unique business mission
co be

independenr ofocher SBUs

a

to have

cleuly definable set of comperjtos who ue competing in qtenal markerc

to be able ro carry our integrative planning processes reratively independen ofoher SBUs ro be able to manage resources in key are
to be large enough ro jusri$, senior managcmenr artcnrion, buc small enough ro serve as a usel tocus for resource allocarion.J

In practice ir was Found that the.designarion ofa SBU ws quire subjecrive and subsequenrly many organisations simply described their dvisions or branches'as SBUs.

2 The organisational structure. It was argued that stmtegy planning was structured as a lop-down plonning process controlled by strategy panners who were often consiclered to have the following characteistics: afiog flt and remote from he real work of running the organisation's business; lacking in business experience - particularly Iine-management experience; lacking in industry-specifrc knowledge; over-reliant on analy'tical techniques; and lacking in creative skills It was also argued that centralised strategy planning emanating from a conglom_ erate head ofce was roo remore and detached from the day',to'-day activities and realities of the various businesses (sBUs) for which rhe plans were being developed, Line managers, who were given the responsibility to implement strategic plans devel oped by strategic planners, had lirtle if any inpur inro rhe srrregy formarion process Accordingly, they often felt alienated or at least without a sense of commitment to the strategic plans handed down to them That is, strategy planners were content to set a number of objectives and stlategies for line managers ro achieve wih little consideration given to the pracricalities of implementation straregic plans invariably lacked consideration of rhe spects of implementation and performance evaluation 3 conceptual foundations. At the heart of strategic planning is a premise that e future is predicrable Economic and market forecasts provide a fo.nd.ation upon which
strategies are developed but as Mintzberg argues, 'The evidence, in fact, poinrs to the contrary 'ihile certain repetitive ptterns, such as seasons, may be preclictable, the forecasting of disconinuities, such as technological innovation or a price increase, is virtually impossible'.6 This point was emphasised b1. Porter who pointed out that techniques rrsecl for strategic planning such as the experience curve, product life cycle theory and porl folio planing were based on oversimplified concepts of cornpetirion and quick-x solutions.T He also contencled that many of the imporrant determinants for corporare success were often left out of consideration

4 creative thinking. A most damning criricism s/as that the process of

strategic planning did not promote strategic thinking This was a major rhrust of a highly publicised anicle, 'The

36

strategic marketing: decision making and planning

chapter 2

strategic thinking and strategc decison making 37

lall ancl rise of strregic planning,, by Henry Mintzberg. He argued rhar ,srnategic pln_ ning, as it has been practicecl, has real been strategicprogrammirg, e artict;on of stlztegies, or visions, thar already exisf I That is, a cliitinction needs to be made between planning and srraregic thinking He conrend.ecr that planning is based on analysis-whrre strtegic thrnkmg is basecr on synthesis The grand falracy of those who a formar approach o strategic planning, he argtLeci, is that they fail to recognise"drro.rr tl-re essentia.l differences between the two processes. As he stated: Becau.se alysis is not synthsis, strtegic planning is not strategy fotraion llolcL emphasis as per originall Analysis may precede and support synthesis, by clefining the parts thr can be conbinecr iro whores Analysis may fotow and eraborate synthlsis, by decomposng and formalizing its consequences Bur anarysis cnnot slLbstitute for synthesis No amount of elabomtion w'l ever enabre formal procedures to forecasr
continuities, to inform manages who ae detachecl fom their operadons, to ceate novel strategies Ultimately, the tem ,sategic planning, has provecl to be an oxymoron 9
dis-

American rnanagemenr, especially in the two decades after'!?orld \ar II, was universally aclmirecl for irs shikingly effecrive performance Bur mes change An approach shapecl

aod efinecL during stable decades rlay be ill suied to a w.orlcl chaacterized by rapicl ancL unpreclictabje change, scarce energy, global competirion for markets, and a consrant need fo innovation This is he world of rhe 1980s ancl, probably, rhe resr of rhis centrLry The concltLsion is painlul bLrt must be faced Responsibility for this compettive listlessness belongs not Jusr to a set of extern condirions but also to e aftitudes, preoccupations, ancL practices of American manage By their preference for seruicing existing markets rther than crearing new ones and by their devotion to short-term re[ums and. ,manage, ment by rhe nurlbers', many of them have eflecdvely forsworn long-term cechnological stLperiority as I comperitive wepon In consequence, they havc bdicatcd their strategic
responsibilities.lo

Given

t.e

above criticsms

fashion.

1983 cipline, clismanrl he 1980s was, i

ln

it was no wonder that strategy pranning fe, orrt of

A nrmber of ev inrerest in rhe di

From doom and gloom to renewal

The 1970s was a decade of economic downtun for the w'estern worcr. The decade began with ising rates of inflation and in January 7973 one of the worst srock maker crashes in modern history fo'owed by an oil crisis r.r octobe. of that year (during which oil prices were triplecl) triggered a globa ecessi,on trlat lasred until 1g75. At the szme time us post-Second worlcr \/ar economic crominance was coming to an end us producrivity growth had declinecl both absorutery and in comparirorro E.'oop.r., and Japanese growth, and American business .o.rfr".r"e had been shatterecl in the wake of Japanese ca and consLlmer erectronics companies usr-rrping their uS rivals on a lvorlclwide scare The uS car manrLfacturers simpry collrd not match the more fuel cffit ienr. cheaper ancl better
gainecrover nhi.,

company philosophy, a distinct corporte culture, long-range staff cevelopment, and consensus decison making should be incorporared into us management practices. He contencled that a stronE homogeneous culture was the secret of success for Japanese companies and he advisecl corporate America to redirect atention ro the htrman relarions side of business, Ttce ArT of Japanese Managemen, by Richard Pacale and Anrhony Achos, also pointed out thar he main reason forJapan's success was their superior managemenr techniques. This included an emphasis on developing shared values, a holistic approach rowards manging people and a rong-term vision for the direction of he business. In 1982 Deal and Kennedy built on rhis theme in their book co?porate culture, and in the same yezt 7he Minl of tbe strttegisr, written by Kennichi ohmae, rhe head of

'Managing our way to economic clecline' served as a wake-up call for uS indLrstry lith the problem of inappropriate management practices identiecl, arrention was now fr'nly focused on frnding a solution The scene had now been set and in a very short time two management books hit the market to become best sellers Two of these books, pubished in 1981, set out to explain why rhe Japanese had been so successful and as a corollary why the us was slipping so fa,r behinc) Tlteory Z: How American Business can Meet tbe Jaanese cbattenge, written by professor 'william ouchi, proposed hat a nodifrecl approach ro management was callecl lor that combinecl the bes characreristics of Japanese and uS management practices ouchi arg.ed rhat the Japanese styre of management that focused on a srong

orth"

Japanese market supremacy had a n:anuftcttrcrs of colottr tel internationl success came

us.

devasta

.:;:iij::::i#,::ffi;:
to sLlch an extent that of 25 US s-Ilvive inlo the 1980s. TheJapanese driving down
and a rapicl searching in top-selling management books of alr me captured the artention of corporate America. Searcb oJ Excellence: Lessons from America's Best Run companes, written by tw() McKinsey & co ssociates, Tom peters and Robet waterman, was basecl on resczrrch study of 43 of the besr run companies in the us. The strength ote book was rat ir was inspirational as it showecl tlut, clespite the overall criticism of us managerncnt pr:rctices, there were many companies that coulcl be consi<lerecl to be excellent. 'l hese excellent companies exhibited eight common atibutes and these attribLltes c<;ulcl be usecl as a model for others to follow Box 2 2 provicres a s.nmry of these chLr:rcteristics ln the ensuing years Ls managerrent practices changecr crrzmaticalry. As discussed in chapter 1 new forms of business organisation started to evolve and processes such as

the

manufa.uring c.srs rhr.rrg Hj]'1[.|"i::.ancl Not surprisingly, the clouble wharnmy of a glob loss ofinrernarional contpetitivcncss in the tfg5

In

us

Busines, .o.rna".r."

/ay to economic clecline,, published in the Harvard Business Reuiew in uty 'jt:irit:T: tSO ftte aurhors, Robert Hayes and v'liam Abernathy, two Harvarcr Business Schoor professors, argued that the root cause of rhe probrems ray wirh the failure of the us system of management. In their words:

the dearh knell of us inct.stry The nosr signicant was an aicle,

w.s ar an r_time

low

38

slralegic marketng: decison making and planning

chapter 2
TABLE 2.1

strategic thinking and strategic decision making 39

Decision making ortre hie orgnsational hierarchical levels

, SBU LEVEL
Ths leve of strategy is primarily concerned with the way in which the business unit comoetes in
OPERATING

Bo' .2

Eight attributes that characterise excellent companies

CoRPoRATE LEVEL

oR FUNCTIoNAL LEVEL

I
2

bias for

action Getting on wirh

ic

active decision making.

Close ro the customer. Lean from the people you serue enrrepreneurship. Fostering innovarion and encouraging practical risk raking.

3 Autonomy md

4
5

Productiviry through people. The rank and file re che rooc source ofqualicy and producriviry.
Hands-on, value-diven. Company values guide everyday practice. Stick co the knitting. Stay close to the busin*s you know. Simple form, lean staff Simpli$, organisational structues and minimise top-level sraff properties. Push auronomy down ro the shop floor (loosc control) buc
xnd R \(hrernxn, ITt.rerLh (tl \ceLrtcL,:
RuD
Lesst,^

This level concerns the overall business portfolio of a diversified organsation At this level of strategy the main emphasis is on building and maintaining a portfolio of high performing businesses This generally involves decisions regarding the following: determination of a corporate misson statement (management's vsion of how the organisaton should compete n the future)
Bcst

6 7

8 Simulaneous loose-tight
focus on core valuet

(ttttt tttnl]",,
Q)mpdili6,Iflrpcr& Iir)m 4m(tica R()q, Ne Y()rk,

198-

all encouraged a more integrative or holistic approach to management including the removal of rigid hierarchical organisational strlrctures Decision making started to become decentrlised in line wih a notion that became known as a 'hierarchy of strategies'11 Il was contended that in large and complex organisations (conglomerates), decision rnaking and planning should be made at three distinct organisational hierarchical levels: (1) the total organisational level (usually described as the corporate level); (2) rhe SBU level; and (3) the functional level wittrin each SBU
BPR, JIT, TQM, and clstomer seruce delivery

setting short- and long-term performance objectives (for the entire group, such as profit, return on nvestment (ROl) and earnings per share (EPS) and the profit, ROI and cash flow contributions for each SBU) determination of strateges to enhance performance of exsting SBUs determination of strategies to maximise synergies between related SBUs resource allocation (investment priorities - for existing and new SBUs) determination of strategies for establishing and maintaining a source of sustainable compettve advantage for the group (such as financial sirength) determnaton of corporate development strateges (including acquisitions, mergers and dvestments)

its chosen industry. The main emphasis is the development of strateges concerning productmarket postons and the establishment of a sustanable compettive advantage for the SBU. Business (or SBU) strategic plans generally nclude business mission (focusing on the productmarkets the SBU should compete in withn its industry), performance objectives (including profit, ROI and cash flow), strategies to achieve those objectives, sources of sustainable competitive advantage (such as low-cost leadership, differentiation or focus strategies) nd resource allocation (to functions and product lines) A busness strategic plan might also include strateges concernnq the establishment of joint ventures or olher forms of strategic ailiances

This level concerns strategies involving each of the organisation's f unctions including production, finance, marketing, R&D and personnel (for a manufacturing organisation). The strategc emphass at this level is on the development of functional/ departmental strategies to support the SBU level plan A distinction needs to be made at ths level between strategic plans (longerterm) and annual or operational plans.

Table 2.7 summarises the different areas of decision making and planning for each

of these hierarchical levels.

As a consequence of these organisational changes managers down the line were now given mLrch more responsibility and authorry for developing and implementing sategies for rheir business units The concept of strategic planning was extended to become strategic management in ecognition that there was a need for a more holistic approach to strategy development and strategy implementation As Gluck and Kaufman argued in their 7980 Haruard Business ReuieLD article, 'Stmtegic management for competitive advaotage': As the economic system becomes more complex ancl the inlegalion of single business units into national, diverse organizations continues, ways mlrst be found to restore the entreprcneLLrial vigor of a simpler, more individually oriented company slructure Strategic manaaetncnt, linking the rigor for formal planning to viSorous operational execution, may prove to be the an.swer.I2 These changes that were taking place emoved some of the major problems that had led to the widespread disillusionment with strategic plzrnning that had surfaced towads the end of the 1970s, Howeve a most significant problem remained The conceptual foundations of stralegic planning sr-rcl'r ru S9OT analysis and Chandler's strategy and sr,cture framework Iacked a substantive analltical foundation This paved the way for lhe enlrance of Michael Porter who burst onto the business scene in 1980 wih the pnblication of the st of his epic works, Conxpetitiue Strategy: TecbniquesforAnazing IndLtries and Competitots Pone extended the earlier concept of SWOT analysis in this

book by providing a detailed description of the steps involved in indr-rstry and competitor

4O stralegic marketing: decision

making and planning

chapter 2
(CSO)

strategic thinking and strategc decsion making 41

analysis In this book he introduced his ftmousftueforces moclel, e/hich to this day is one of he mosl wiclely usecl businens tools He also intoduced his concept of competitive aclvantage, which he elaborated on in his 1!85 publication, Competitiue Aduanta.ge: CredTing and SLsraining Superior Performance Both of these books acred as catalyst lo revive inlerest in strategic planning/management and the concepts he introduced of inclustry analysis, generic competitive strategies and value-chain analysis were not only widely acclaimed and adoptecl by indrLstry, but acted as a srimulant for esearchers to systematically investigale he links beNveen effective strategies and business performance. The net resr-Llr of the changes thar were taking place in the early 1980s was that strategy planning was reborn in he forrn of strategic management Senior managers of SBUs were becoming increasingly involved in strategy development and implementation processes, and strategic managemenr was becoming a rnajor elcl of study for academics from a diverse range of disciplines inclucling psychology, economics, political science and marketing, in adcliion to rhose wirhin rhe broad freld of managemenr. Not surprisingly as the cliscipline of strategic mangement flourished a rremenclous diversity of concepts and approaclles evolved [n an effort to make sense of ille literature Mintzbe! has iclentifred 'ten schools of rhoLLghr' concepts belonging ro eacl-r school are bouncl togerher by common underlying philosopl.ries and assumptions These 'ten schools of thought' were further categorisecl into lhree broad groups: prescriptive, clescriptive and holistic approaches Box 2 J provides a brief summary of these ,ten schools of thought, By the 1990s srtegic mnagement hacl matr-rred as an academic discipline znd as a business plocess A number of new concepts were introduced cluring this decacle and Kaplan and Norron's model of the balanced scorecard was argr-:ably the most prominent while c K Prahalad and Gary Hamel's notions of core competence, strategic intent and strategic architectue also made a signi_cant impact 13 ln 1996 Michael porter extenciecl lris concept of competitive advantage in a highly publicised Haruard Bliness Reuielo article, '!har is strategy?' Howeve while these conceptual developments were important, changes lhat were taking place in the external environment s/ere stating to signicantly sl-rape the way strategic management was being practised This was the era of restrucruring or re-engineering as it was commonly described It was also the decade when digital technologies were driving a shift from rhe indusial economy to the information age. In the eary to mid 1990s expectations abolt the new economy were higl-r but the dotcom crash in April 2000 dampened much of the enrhusiasm However, rhis provecl to a shoft, lived blip on lhe radar By 2tJO4 \X/eb 2 0 applications and associared technologies (such as wikis, blogs and social netlvorking sites) were bringing about changes thar were impacting on society, the media and industry The new business environment had become one of rapicl change and emerging market instability and volatility in contrast to the relarively stable brLsiness environment in the pre 1990s (prelnternet/inclllstrial economy) era In this rzpidly cl-nnging business environment strategic decisions were required to be made on a continLring basis and rs a conseqLrence forrnal apprcaches to strategic planning hacl

in a number of companies such as Kimberly-Clark, Motorola and Yahoo, CSOs were expectecl to enslrre that strategic decisions were effectively rnslated into action and also to assist the CEO and the senior management team in the strategy development process 14 Howeve as was found in tl-re 2006 McKinsey suruey the role of the CSO differs from organisation to organisation l4rile 52 per cent of managers reported that
impofant strategic decisions were con-ned to a small group of senior managers in their organisations, only 39 per cent believecl d-rat he CEO leads the organisation's strategy development process, while 34 per cent were of the opinion tht the CSO or a strategy
grotrp lead the process Interestingly, 46 per cent of Clevel executives consisting of board members, CEOs, CFOs and other top execLrtives repofed that the CEO (or the person holding an equivalent position) leads the process

Box

2.3 Mintzberg's ten schools of thought

Group 1 - Prescriptive schools of thought

The deign school. This school evolved in rhe lae 1950s and early I 960s Strategy is conside red co be a conceptual process. This school o[ choughr ryolved out oF rhc work of Selznick, Chandler and che Harvad S\llOT model ofsrraregy Formarion. Thc simple model of che design school gavc way ro rhe planning school. The

pluning school. This school

commenced in 1965 with rhe publicarion of Ansoff's book

Corporate Snategl, which was ro bccome a major catalysr For rhe developmenr ofsrraregic planning as a management discipline. This school oFthought advocared srraregy planning as a highly formalised process bed on elaborate nodels and exrensive checklists and rechniques. Ir w he dominant school rhroughouc the 1970s bur came under srrong artack in rhe early I 980s and w largely discredited in rhe I 990s.

The positioning school. This school commenced in 1980 with rhe launch oIMichael Portet Competitiue Snteg. \X/hile rhis school ofrhought w led by Porrer, in che 1980s two orher streams oFwok ryolved within che posirioning school: military muims (buiness strategies based on che milirary srraregies of Sun Tsu, Clauewirz and Liddell Hart) and consulting imperatives (models such as the Boston Consulting Group and pror impact of market stratcgy- PIMS - dweloped in the 1960s thar prescribed srraregic behaviour).15

Group 2

Descriptive schools of thought

The entrrpreneurial school. AJthough his school ofchought evolved during rhe 1980s it originared in the much earlie work ofSchumpeter (1934), Srrauss (1944) and Cole (1959), who argued rhar ioiriacives taken by visionary leaders are rhe keys ro economic growh,l6 In rhe I980s rb is ealier work became the Foundarion For conceprs such as srraregic vision l7 and leadership in organisarional srarr-up and turnalound life-cycle situations. The cognitive school. This school wolved in the 1980s mainly owing to prychologically orienred academia and pracririoners who beliwe rhar straregy Fomarion is a mental process; lor exmple, they probe rhe mind oF rhe strategisc in oder to undersrand srrategic vision The school draws on concepts in the leld ofcognirive psychology relacing particularly to perceprion (how srrategisrs become informed), concept anainmenr (how strategy irself is formed), reconceprion (how strategy chmges or why it doesnt chmge) md scraccgic sryle (how srraregisrs dffcr in rhcir cognitivc orienracion). The 3M Company, for example, uses straregic srories ro underpin its business-planning processes.lS The leuning school. In rhis school, srrategy is viewed as an emergenr process. Srrategists learn ove me d strategies emerge as srraregisrs, somerimes individually but more often collecrively, come to undersrand conrex and rheir organisation's epabiliries in dealing

become problematic Tlis wrs borne out in 1 str-Lcly of stmtegic planning practices by McKinsey & Co in 2006 In an online srrrvey of nearly 800 execrLtives it was founc that only 23 per cent indicated th:Lt maior strategic clecisions were mac'le witl-rin the strategic planning Process It was also found tha orly 45 per cent $/ere sasfied witl-r the strategic planning process Hos/ever, on a more positive sic1e, 79 per cent of these n-anages believed that formal straregic plarning processes played a signifrcant role in strtegy development During the early 2000s ir had become apparenr d-nt the circa 1970s problem of a disconnection between strregy developrnent and strategy implementation had re-emerged a major concern This led to the crerion of a new position of chief straregy officer

42

strategic marketing: decision making and planning

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strategic thnking and strategic decsion making 43

with ir. Inreest in'learning organisations'and'inrclligenr organisarions'heighrened during 1990s and quire clearly rhis school ofrhoughc continu., ,o r.rorg rripo.t.t9

rhe

^i..""r

strategic decisions need to be made ancl implemented as the need arises and, of necessity, may be made outsde of rhe forma.l srrategic planning processes Therefore the process of strategic management needs to be ongoing 5 strategic thinking i.s a creative process including intuirive and other non-rational thought processes 6 strategic thinking is nor just a top-d.own process and provision needs ro be made ro

'i

include bottom-up input into the sategy developrent process 7 A model of the strategic managen-ent process shoulcl be considerecl in terms of being
a framework that provicles guidelines for strategists to consider rather than as a straitjacket rhat inhibits creativiry and innovaion 8 Marketing operates at two levels in the organisation: at the departmental or functional level and at the top management strategy level At rhe top management level the role of marketing is: a to foster a marketing-oriented cultue throughout the organsation That is, a focus on establishing and maintaining a sustainable competitive advantege emphasising the organisation's value proposition b to provide input into rhe strategic visioning process - the dererminarion of what

The

This school ofrhought evolved in the latc 1970s bed on rhe oorion assive and srraregy fomation is dicated by external condicioos rarher

business we are in

Group 3

Holistic school of thought

c to provide in-depth

inpLlt into key marketrng strategy consiclerations including the iclentification, evaluation and targeting of market segments, ancl the

development of brand positioning anci marketing mL\ strategies

d to iclentify market growth oppotLrniries

e to provide in-deptl-r input into the process of resource allocation to ensure at key marketing metrics are incorporated into rhe organisation,s
monitoring, evaluation and control processes

What has been learnt

From the above review of the developments that have taken prace in he erd of les can be determined in order to develop
effective impementation of hose strategies

Ka Foods is rhe world's secondJargest Food company, wirh m annual rsenue in 200g of us$42 billion. The compmy boasrs an array of some of the best known brmds in rhe world. Nne of these brmds have revenues in excess of uS$r billion rGafr, LU, Maxwell House,

Jacobs,

Milka, Nabisco, oreo, Philadelphia and oscar Mayer Addirionalry, over 50 brads have revenues in qcess of US$100 million.
Twenry-ve years ago Ka was a large company bur nor che behemoth ir is today. The prsent compmy me abour s a reulr of a series of acqusitions rhar rook place in rhe 19g0s md 1990s' staring wirh Philip Mo'is acquiring Gmeral Foods in r9g5 md I(m in 19g8.

d techniques:
1 The most meaningful level of strategy is at the business unit level of organisarion. This is consistent with the organisation-wicre t'octLs ancr intefunctionar approach advocatecl in the concept of marke orientation.

to be clealv linked

44

strategic marketing: decision making and planning

chapter 2
Figure

strategic thinking and strategic decson making

45

of restoring long-rerm growrh of earnings of between 7 and 9 per cenr. The existing orgmisational marrix w dismanded md a nry decenualised structure w:s put in place which w very much in tune wir.h the orgmisational srructure qhibired inTable 2.1 of dris chaprer. New businss unirs were established and he leaders of rhese unia becme general mmagers radrer rtrm just acting as markerers as they had done previously. Business uits were given
more direcc lines of responsibility and P&L autonomy. Commenting on trGaft's strong second quurer 2009 raults, Irene Rosenfeld itared, 'The investnena we'ye rnade over rhe past three years are driving solid busines momenrum in a challenging economic envionment. \?'e're on track ro deliver song top and bouom line results, restore our pror margins to indusrry avemges and consistendy deliver againsr our long-term target of7 ro 9 per cenr.'* Source: B$ed on 'Insde the Kf( Foods mfomalion'.
slrale[Chbilsne$t Aurumn 2U09, pp. 68-79

In 2006 lrene Rosenfeld was appoinred Chairmm and CEO and she soon cme to the conclusion rhat a change in management process w urgendy needed. This me abouc in 2007 when a rurnaround strategy, 'Organizing for Growrh', was lauched - with rhe aim

2.1

The strategic management process

Strategy
development,'

Strategy implementation

Strategy
evaluaton and

tl

control

This four-stage process shown in Figure 2 1 is essentially a descriptive model of the straegic management process The model is not prescriptive and the work involved is invariably a le/o-way process rather than a one-way linear progression from one stage

to the next The model should be thollght of in terms of a continuons loop whereby
informrtion derived at each stage is fed brck into rhe process Ir should also be thought of in erms of providing a framework in which key marketing concepts and techniqr,res can be incorporated into each of the intenelated stages of the stratelic management process

'

'Kmft-Foods rcporrs Q2 EPS from continuing operations up 27olo ro $0.56, fuelled by broad-bed opeeting gaini. Kraft Foods pres"^ release, 4 Augut 2009.

Figure 2 2 builds on this basic mode by fleshing oLrt a nlrmber of steps that are involved at each of the four stages As the emphasis is on incorporating marketing concepts and techniques into the overall process of strategic management, the model is entled strategic marketing mnagemenr

The strategic marketing management process - a framework

Stage

Strategic analysis

At the lop level of strategic decsion making, CEOs, CSOs and other members of the senior management team are required to consider a wide range of factors including those that are marketinl related It is incumbent upon the chief marketing officer (cMo) to deal with markering-related considerations appropriately clrrring rhe various stages of strategy development end implementation Accordingly, marketing strtegies may therefore be developed in a numbe of ways: 1 as pa of a broacler based formal strategy planning or strategic mangement process thnt culmina.tes in the preparation of a strategy planning document which may be comptehensive or in a more abbreviated format (refer to chapter 13 for discussion of the vzLrous tonnat options) 2 as part of a hroacler based set of strategy deliberations tl'ar are made outside of a
formal stratcgy planning pxrcess crLhninating in a or-Lnber of recommendations which may be articulatecl in :r pper or :r 1-eport 3 as a separate strategic mrketing plan which .r:ry be presented in eithe a comprehensive or abbreviatecl forma 4 as a paper or report containing marketin{ strategy recommendations Irrespective of these different approaches tle pocess of strategic marketing decision making and implementation is part of a broader process of strategic management that consists of four interdependent stages

The purpose of this stage of the process is to revies/ the curent siluation facing the organisation and most importantly to arrive at assumptions abollt the future situation Strategic analysis comprises two ma,or areas of activity: (1) conducting a situation analysis; and (2) preparing a summary of his wok in the form of a problems and opportunity statement,

Situation analysis
The situation analysis is the foundation upon which sfategic decisions can be made Il is essentially a review of where we are now, whee we have been and where we are going The more thorongh the review, the more solid the foundation The sirjation analysis consists of four phases of sork as depicted in Figure 2 l Before discussing each of these phases it is useful to note that the commonly usecL acronym of SWOT (strengths, weaknesses, opportunities and theats) is argr-L:rhly misleading as it suagests that internal analysis (strengths and weaknesses) precccles external analysis (oppofiunities and hreats) This is precisely the incorrect sequence as it is necessary lo determine the challenges facing an orga.nisation as wonld be revealed in the review of the exrernal environment before an ssessmenr can be nacle of /hat internal capabilities are required If an acronym has to be rLsecl then it my be better ro use TOWS (threats, opportLLnities, weaknesses and strengths)

46

strategic marketng: decision making and planning

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strategic thinking and strategic decision making 47

--

s.

r"1;"t"s;,1e1"0

;;;'""i

p."""'
Determination

The four phases of work involved in undertaking a situaton analysis

Situation analysis Business definition and scope

Stage
1

of

'

Review of the
External Environment

Business definition and scope

ueermtnatton

ffi;r:";'.J-)

GSFs ./'

ot

Kevtew ot
lnternal capabiltes

Strategic
analysis

. .

External environment

lnternal

Remote environment Near environment

capabilities Figure 2 4 shows the relationship between the external forces and internal capabilities

Critical success factors

t
Problems and opportuntes statement
Stage 2

FEre 2.4

Stategy development

Marketing objectives

. . .

Topline revenue objectives

Profitabilityposition
Revenue mix strategies

Marketing strateges

. . . . . . .

Marketing mix strategies Target market segments

Product/brandpositioning
Product strategies Pricing strategies

Distributionstrategies
lntegrated marketing communication strategies People, process management any physical asset strategies (for service providers)

t
Stage 3

Business definition and scope statement At the outset of the strategic management process it is necessary to define what business we are in That is, what industry and what markets do we or should we compete in as a business uni From a marketing point of view the following questions need to be resolved: How should the market and the products rht service that market be defined?
How is he market structured? \What are the market segments within the total market?.What are our existing products and potential new products that service the market? \flho are our eisting and fun:re intermediary and end-user customers? V4ro are our competitors? \X4rat is the geographic domain of our business unit and what is the plaming time frame? The business definition and scope statemenr is a starting point for strategy analysis and development The way a business is defrned determines the nature of the markets that the organisation will compete in, the products and substitutes that service that market or may service that market, the nature of the competirion and the capabilities rhe organisation will need to have in order to compete successfully in that industry.

lmplementation

Budgets

Submisson and approval

Marketing program

.
Stage 4 Evaluation and control

lmplementation (action plan)

t
Evaluaton an control

Review of the externaI environment There are two interrelated phases of the review of the externol environment. The purpose of the review is to arive at a number of conclusions concerning the opportunities and threats that currently face the organisation and are likely to confront

48

strategic marketng: decision making and planning

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stratgic thinking and strategic decision making 49

lenges facing the organisation and those that are likely to occur in the ftiture. upon completion of this review the strategists are then in a position to arrive at a view about the caPabilities the oganisation will need to have in ord.er to meet its future challenges. This is he job for the third stage of the situation analysis, the determinarion of crilcol
success foctors (CSFs).

terms ofopportunities and threats. There are frve areas ofthe near environment review: market review, customer review, competirive review, review of distribution channels and buyers, and a review of supply factors The review of the external environment (remote and near) sets out the current chal_

business denition and scope statement. Near envionmental forces direcrly impact on the way in which organisations survive, prosper or perish. The task fo the marketing srrategist is to determine the naftrre and strength of hese forces and the likely impacr that these forces will have on rhe organisation in rhe fr:ture, once again in

forces of change'. These forces technological and the natural environment. A , sociocultual and technological) but of course this overlooks the naural environment which since the 1990s has become an increasingy signi_cant force of change These frve remote driving forces of change impact on the neor environment (which is also efemed to as the tosk environment or induslry environmenl). The near environment is so named as it refers to rhe industry which the organisation operates in as defined -

the organisation within the time farne of rhe stategic plan The work involved consists of: ' analls (breaking a whole into a number of pans ro examine rhe nature and relationships of the parrs) . syntbesis (putting all of the parts together in a meaningful way to form a whole) . dia.gnosis (identi$zing a condition that exists) . prognos (determining what is likely to happen) The process co[nences with a review of the remote environment (also referred to as the mocro environment) including vct as ,driving

the organisation's capabilities (in terms of its strengths and weaknesses) of competing sr,rccessfully in the external environment as outlined in the previous review of the remote and near environment driving forces of change

Problems and opportunities statement

The encl product of the situation analysis is a synthesis in the form of a problems and opportunities statement This statement acts as the linchpin between the processes of analysis and strategy development The situation analysis involves a detailed review of a huge variety of external and internl factors that invariably has the potential to cause information overload Accordingly, there is a danger of'being too close to rhe trees so as not to be able to see the size or shape of the foest' The objective of the problems and opportunity statement is to mal<e sense of all of this information To do this there are fi.ve main areas to consider: L determination of the organisation's capabilities in relation to the CSFs 2 identifrcation of opporrunities where the organisation has existing capabilities 3 identication of opportunities where the organisarion might be able to develop the appropriate capabilities 4 identification of signifrcant rhret-s that must be addressed 5 determination of the strategic implications of the challenges confronting the organisation Chapter 3 provides a framework that can be used to draw on a number of concepts, tools and techniques to aid the process of strategic analysis

in the

Stage 2 - Strategy development

During this stage strategy is crafted, formed or developed The term 'formulated' is avoided as it implies that strategy can be prescribed in a mechanical sense Strategy development is both an art and a science involving rational, anal)'tical and convergent thought processes with cretivity and initive thinking Thar is, a combination of left and right brain thinking. There is no 'one best way' to cra-ft strategies and great ideas can come from variet ^ of individuals from the top to the bottom of the organisation Because of their focus on
customers and competitors, marketers, whether they ae members of the sales force, brand rranagers or CMOs (or equivalent markering leaders), play (or at leasr should play) avital role in the process of strategy development - particularly o offset those in the organisation who are internally rather than extemally focused. The process of developing marketing strategies involves a vriety of top-clown and bottom-up considerations. At the top level the organisation,s competitive positioning strategy and frnancial goals for the planning time horizon need to be thrown into the

Critica I success factors Critical success factors (ot as they are alterna those relatively few factors tht are critical for tive position to our organisation, to possess in leverage phenomena that provide an ognisati can occlrr at any stage in the value chain from supply (such as having exclusive access) to the marketing and consumption of the product or service by the end consumer.

lnternaI capabi[tes revew The review of h

organisation. More kills and resources the The next step is to assess the capabilitcs of thc organisation to meet these challenges. This involves review of the internal functions including non-markering capabilities (frnancial position, management and leadership, human resources, research and deveropment, operations managementr interfunctional coordination and responsiveness, and competitive position) and markering capabilities (marketing management, and marketing strategies and perf'ormance) The main emphasis of this review is to deermine

es the

c success for ir ro

the

mlxing bowl along with marketing-related considerations such as potential proctlctmarket, market segmentation, product positioning and marketing mix strategies The process is essentially z balanctng acr involving consideration of these various factors The end product is realistic and achievable business unit objectives that trns.late to
marketing objectives emphasising the revenue and profrt objectives over the time frame of the strategic plan Chapter 4 provides a framework for considerations involved in establishing marketing objectives and in developing higherlevel markering strategies while Chapters 5 ro 11 provide detailed discussions of concepts and techniques to draw on for the development of market segmentation, product,/brand positioning and marketing mix strategies.

5O strategic marketing: decision

making and planning

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strategc thinking and strategic decision making 51

Stage 3 - lmptementation
As briefly discussed earlier the position of chief srrategy offrcer (CSO) evolved in rhe early 2000s in recognition of the increasing gp that had arisen beNveen the development of strategies and the effective implementation of those strategies Stage 3 marks the turning point where strategy planning becomes strategic management The strategic management process embraces three interrelated processes: budgeting, implementation (action planning) and evaluation and control systems Before strategy recommendalions can be implemented approval must be obtained

environment) in addition to internal factors It should also be noted that measues of marketing performance are often incorporated inlo an organisation-wide performance measuremen system stLcl-r as the balanced scorecard, In recent years the balanced scorecard has been extended to become a tool to facilitate the strategic implementation process Kaplan and Nofion, the originators of the concept of the balanced scorecard, have also proposed that an offrce of straregy management (oSM) should be establishe<l for the purpose of closing the breach bemveen strategy development and execution 24 The balanced scorecard is discussed in further detail in Chapter 12

from top manalement and in many cases from the board of directors An essential
consideration is therefore the frnancial ramifrcations of the strategy recommendations as set out in a marketing budget. This includes market and sales forecasts and profitability/return of invesrment pro,ections As marketing accountabiity has become a maior issue for maketers over the last decade this pal of the strategic mnagement process invariably atracts significant attention At the heart of the process of marketing accotrntability is t'e cause and elfect dationship of marketing expenditure ancl marketing outcomes That is, the long-term retlrrn on investment (RoI) of marketing needs to be clearly established once approval is obtained the next step is one of implementation No matter how lhorough and well preparecl the strategy recommendations, they are useless if not implemented effectively. Marketng sategies need o be evaluared against orgonisotionol fit - rhe abiliry of che SBU to effectively implement rhese straregies. Thy also need to specif,i the steps that need ro be taken f'or he effective implemenration of those srategies This involves srating who is to be responsible fo what by when ,The btrck must stop somewhere' and it is essential that responsibilities and Liming are clearly established and communicated to all personnel concerned An important part of rhis pocess is internal marketing - the recognition that employees and other personnel external to the organisation, such as slategic alliance partners, need to be targeted with marketing activity, particularly communication customer service programs ae another important aspect of the marketing implementation process. Marketing operates, or should operate, at two levels within organisations: at the higher level o strategy management and t the departmental or functional level of operations. At the higher level ttre CMO participates as a member of the senior management team for the purpose of developing and sustaining a competitive advartage for the organisation to meet its long-term frnancial objectives. At this level of organisation the main role for the CMO is to ensure that lhe organisaLion is market-oriented - which involves an organisation-wide approach for creating, communicating, delivering and maintaining the organisation's value proposition. Tht is, marketing is essentially the organisation's orentation towards the marketplace providing a deep understanding of the customer and competitive envirorunents It also needs to be understood that marketing strategies are developed as parl of zn integrated btrsiness planning approach involving all of ttre functional areas of the organisation. These marketng strategies may be articulated as parr of a holistic business plan or strategy paper, or in the form of a
stand-alone strategic marketing plan It should also be recognised that saregic thinking is not a once-every-threeyears planning event as great ideas often emerge in response to evolving extemal or internal events Therefore, strategy planning processes need to be flexible in order to cater for both deliberale and emergent strategy decision making 25 The strategic marketing processes outlined in this chapter are discussed in much greater detail in the remaining chapters of this book. These processes are presented within a framework that is intended to provide marketing strategists with a means for developing marketing strategies within a context of an organisation-wide strategic management approach

Stage 4

- Evaluation

and control

The final stage of the strategic marketing management process is to establish an evaluation ancl control system that provides timely information for tracking and assessing mar-

keting performance. The evaluation of marketing performance needs ro be conducted on two levels The frrst is to review past perfomance to determine the effectiveness and effrciency of the marketing activiry. The metrics rLsed here are logging indicotors that provide information bolrt actions that have alreacly been aken The second level of evaluation is to provide information concerning future marketing performance. These merrics are known as leoding indicotors as they measure such facrors as the levels of brand equiry, brand loyalty, cLrstomer satisraction and customer retention rates that are antecedents of future sales For example, if customer satisfaction levels have declined and brand switching in the product category has increased, there is a probability of an impending sales decline The system of evaluation and contol is a continuous process and includes the monitoring of information concerning the external environment (boch remote and near

Strategy in Action
Consider three entirely different industries and contrast the role that marketing would he expected to play in the strategy development processes for leading companies in each of hose indlrstries Should the Chief Executive Ofcer (CEO) or a Chief Strategy Ofcer (CSO) lead the organisation's srategy development process?'Vhat role shoulcl the Chief Marketing Officer (CMO) play? Vhat other firnctional heacls should be involved in the strategy development process? Vho else should participate?

52

strategic marketing: decision making and planning

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R I Foyes ond WJ Abernofhy, 'Monogrng our woy lo economrc decline' , Horvord Busness Rewew, luy-Augusr 1980, p 8

slrategc thinking and strategc decision making 53

Strategy n revew
Prepare your own strategic marketing plan.
\r7atch the CD included

I G

Show, R Brown ond P Bromrley, 'Sholegic stores Now 3M is rewrihng blsiness ponn og' , Horvord
Buslness Revlew,

MoJune 998, pp 4 I -50

with the book, review Module 1: The process of developing strategic marketing plan Also refer to Chapter 13 for help in choosing an appropriate format for wdting a stmtegic mrketing plan of feport Complete the activity 'Quiz on the total strategic marketing planning process' to revise your understanding of the chapter.

The not on ol o 'hLerorchy of srolegres wos eslobl shed rn fhe slroleglc ponnrng ilerolure n lhe I 970s Although nof the I rst to conce ve the 'deo, George Slerner s genero ly ossocroled wrfh s concepl Reler lo G A Slerner, Strolegic Plonning Whot Every Monoger Musl Knaw,lhe Fee Press, New York, I 929
12

The rm 'stroleg c monogemenl' wos populorised by Schendel ond Hofer n o book they ed ted lollowing le rie'd or s-o eg'c plon' ng n o coference
Rele lo D E Schende ond C H |lofer (eds), Slrolegtc Monogemenl A New Vrcw of Bustness Policy ond Plonnng, Lrttle Bown, Boslon, Moss , I 979 Gluck ond his co eogues o so popu orsed The concepi of slrolegic monogemenl n FW G uck, S P Koufmon ond A S Wol eck, 'Shotegrc monogemenf for compelrhve odvonloge', Horvord Bustness Review,

The leorn ng schoo ol thought evolved oul ol on ortice byC E Lindbom,'-lhescence of muddling tlrough' , Public Adninisttotve Revw, )959 , pp 79-88, and grew to some prominece in I B Ouinn, Slroleges for Chonge Logtcol lncremenlolisn, lrwin, Homewood, ll, 1980 Poscoe provides on rnterestig occount of how skoleg es ore deve oped rncremenfoly rn R T Poscole, 'Perspeclves on sholegy The reol story behrnd l-londo! success', Co/fornro MonogemanrRevtcw. vo XXV -o 3, 198,

1977

'_

pp 47-72

20 W

' ) |

Search me!

\r\ \J

. . . . . .

For the latest readings on strategic ttrinking and strategic decision making from a wide range of wold-class jor-rmals, newspapers and e-books, explore Search me! mrketing. Login to Search me! using the access card at the front of your book and try searching for the key tenns listecl beloe/

Ouchi, TheoryZ HowAnericonBusinessCon Meel lhe.lopa nese Chol/enge, Addrson'Wesley, Reodlng, 98 , ahnae, fhe Mtnd of he Slrotegrsl McGrow-llil , New York, 1982

lulAugusr 1980, t3 C K

pp

154-

brand positioning top-down planning experlence cllrve near environment remote environment frve forces model

Proho od ond G Homel, 'The core competence of lhe corporohon', Horvord Bustness Rewew,

l99A,pp 79-9), G IlomelondCK

Prohood,

Canpeltng for lhe Fuure, Hovord Busrness School Press, Boslon, Moss , I 994, ond C K Proho od ond G Ilome, 'Shotegrc nlent', Horvord Business Revrew, MoJune 1989, pp 63-76
4
For further informot on obout e posrtron ol chrel skotegy off cer reler lo R T S Breen, P F Nunes ond W E Shill, 'he chref shotegy off cei , Horvord Busrness Revew, October 2002, pp 84-93; Bree, PF Nunes od W Shil, 'Rse of the chref skolegy officer', Ouilook, 2OA8, pp I -,'Now chref slrolegy officers hnk obout he r role A roundloble', mck nseyquorterly com, Moy 2008 pp 40-8

Kop on ond Norlon nkoduced the concept rn 992 ond s nce ot hme hove plb ished extens vey on he model whrch hos undergone o pTocess o[ cont nuous rmprovemenl ond modifrcohon See for exomple, R S Koplon ond D P Norton, 'The bolonced scoecord Meosures ol drve perlormonce' Horvord Bustness Pey,e, -o-uory leb.uo'y 9o2 pp 7 I -80, R S Kop on ond D P Norlon, 'Using lhe bolonced scorecord os o slrolegrc monogemenl syslem' Horvord Busrness Revrew, lonuorFebruory I 99, pp Z5 85, ond R S Koplon ond D P Norton, Bolonced Scorecord T@nslong Slrclegy nlo Actian, Norvord Business School Press, 199 Stokeholder fheory origrnoted from the work of Bornord { 938), Cyet ond Morch ( I 93) ond Freemon { I 984) I is bosed on the notion hot slokehoders represent bo he nternol ond exbrno consf luenc es of o firm rnc uding shoreholders, ownes, monogers, empoyees, customers, supp|ers, I nonc eTs, government, lhe med o, lnrons, communrly groups ond socrely os o who e Acodemrcs be onging lo Minlzberg s po trcol, cullurol ond env ronmenlo schools of thought o I hove nteresi n stokeholder theory wh ch teds to oct os o komework encompossrng oreos such os ercs, corporole socro respons b Lrty ICSR) ond volues

22

5 PMS is o reseorch p.ogrom thot nvestgoles the flnonciol resu ts ol strotegres employed by
opproxrmotely 3000 SBUs o[450 compon es n the USA Reler to R Buzze I ond B Go e, Ihe PIMS Pnnaple, fl,e Free Press, New York, I 987

l H p 08 2
MrnLberg, 'The fol ond nse of slroteg c plonn ng', Horvord Busi ness Revrew, JonuorFebrtory ) 99 4, Conodo lrom ]937 to 1976'. R B Lomb ond SL'oscuo eds), Ao"ces n S"otgc Monogemenl, lA Press, Greenwrch, I 98 ond R-l Pocole, 'Perspeclives on shoiegy The rl story behind l-londo! success', Colifornio Monogement Revrew, Spring 984, pp 83-94

A. tnquy

Schumpeter, Theary of Ecanontc Developnent na P,af', Copol Credi lne.es.

G S Doy ond R Wens ey, 'Morkei ng theory wrth o slrolegic orientof on' , lournol af Morketing, 47 , 983, pp 29-80 Refer o so to D S Ilopkrns, fhe Morkelrng P/on, New York, Conferece

Boord.

l98l

H M nberg,

'The

fol ond

ond Bustness Cycle, lorvord Un versrly Press, Combndge, Moss I934 SeeolsoI Il Strouss 'The enlreprene! e I rn' , Journal of Pohtrcol Economy, )une 1944, pp 1 12-27, ond A I Co e, Eusrness Enlerpnse tn s Sacnl Selttng, Horvord Un vers \r Press, Combrdge Moss, 1959

23 H

Mrnizhe, The Rse ond Foll af iotegtc Plonnng, Prenlicelol Inbrnohonol, llemel Hempsteod, llerts,

)994

24

nse

of skolegrc p onning',

S Koplon ond D P Norton, offLce of sfotegy moogemenl' Horvord Busness Revew, Oclober
R

-lhe

p ilo
ihrnk ng

t7 lhe

3 FW
pp
I

Gluck, The McKinsey Quoterly, W nter 98, 8-41 Strotegcchonge Logrco ncrementclsm'

Porler, Coroorote slrolegy lhe slote of slrotegic , Ilie Ecanantst, Moy 23, 1987 p 2A

4 I B Qurnn 5

Sloon Monogement Revtew,

vol 2A, )978, p 7

p
H

M nzberg, 'The foll ond r se o stroteg c plonning', )O7

See, for exomple, ong tud nol studres by Il M n2berg ond B P Woters, 'Does plonnrng nhrbrf skoleg c thrnk ng2 Trock ng lhe sfoteg es of Ar

M nZberg, The Rse ond Foll of Slrotegc Plonntng, Heme Hempsleod Prentice-llol nternotonol (UKl, p 321

concepl of skolegrc v sron wos populcnsed by ond Nonus n lhe I 98Os ond loter by |lomel ond Prohood w th lherr concepts ol skotegrc ntent ond shotegrc orchrleclure Refer lo W Benn s ond B Nous, leoders The Strotegtes for Tokng Charge, Horper ond Row, New Yok, I 985 ond C K Proholod ond G Home, 'Skoteglc nfent', Horvord Bustness Revrew Molune 989, pp 3-Z
Bennrs

2OA5 pp 72-8A

25

sed n whot hos generolly come to be regorded cs o stroieglc p onnrng 'Crofhng clossc H Mntberg strotegy', Horvord
Thrs pornt wos emphos Busrness

Review,luly-August 987, pp 6-75

Also refe to lindblomt concept of 'boby steps' ond 'mudd|ng through' ond Qu nns concept ol 'log col ncemenlo sm' discussed prevrousy - see endno I