Strategic Planning

Market-oriented strategic planning is the managerial process of developing and maintaining a viable fit between the organization’s objectives, skills, and resources and its changing market opportunities. 

The aim of strategic planning is to shape the company’s businesses and products so they yield target profits and growth. 

Kotler, Armstrong & Opresnik (2017:64) 

At the corporate level, the company starts the strategic planning process by defining its overall purpose and mission: 

Kotler, Armstrong & Opresnik (2017:64) 

Mission statement

Mission statement 

A statement of the organization’s purpose—what it wants to accomplish in the larger environment.

BEST OF HBR 1960, Marketing Myopia, by Theodore Levitt 

The railroads did not stop growing because the need for passenger and freight transportation declined. That grew. The railroads are in trouble today not because that need was filled by others (cars, trucks, airplanes, and even telephones) but because it was not filled by the railroads themselves. They let others take customers away from them because they assumed themselves to be in the railroad business rather than in the transportation business. The reason they defined their industry incorrectly was that they were railroad oriented instead of transportation oriented; they were product oriented instead of customer oriented. 

Why?

Products and technologies eventually become outdated, but basic market needs may last forever.

Kotler, Armstrong & Opresnik (2017:65) 

Mission statements should be market oriented and defined in terms of satisfying basic customer needs.

Products and technologies eventually become outdated, but basic market needs may last forever.

To define its mission, a company should address Peter Drucker’s classic questions

What is our business?

Who is the customer?

What is of value to the customer?

What will our business be?

Our mission at [Company Name] is to provide our community with high-quality, organic produce, while supporting sustainable, local farming practices. We are committed to making the healthiest, freshest food available while reducing our environmental impact. We strive to build relationships with our customers, providing them with an enjoyable, educational shopping experience. We are passionate about promoting an ethical, socially responsible food system and are committed to helping our local farmers succeed.

Good mission statements have five major characteristics: 

1. Focus on a limited number of goals.

2. Stress the company’s major policies and values.

3. Define (Re-define) major competitive spheres.

4. They have a long-term view.

5. Short, memorable, and meaningful.

Kotler & Keller (2013: 38 )

The company needs to turn its broad mission into detailed supporting objectives for each level of management.  

Each manager should have objectives and be responsible for reaching them. 

Most business units pursue a mix of objectives, including profitability, sales growth, market share improvement, risk containment, innovation, and reputation. 

Kotler & Keller (2013: 38 

1. Must be arranged hierarchically.

2. Objectives should be quantitative. 

3. Goals should be realistic. 

4. Objectives must be consistent.