Global Strategic Planning

By M. Isi Eromosele

In order to respond to the opportunities and challenges of the global marketplace, most companies have to engage in the process of strategic planning. Strategic planning has been defined as a process that defines the direction a company will pursue within its chosen environment and guides the allocation of its resources and efforts.

To develop an effective strategic plan, a company must first define its mission. Second, it must conduct a situational assessment of the threats and opportunities to which the company can respond within the scope of its target market. At this stage, the company must also assess its own distinctive competencies.

Lastly, the company must also establish a set of priorities based on its business objectives that align with its market mission.

The Organizational Mission

Companies can establish missions that are either broad or narrow, but it is important to establish a mission with the greatest likelihood of success in a highly competitive marketplace.

Essential to a successful mission statement is the recognition of what the business value is and what its customer wants.

Organizational Strategies

The company can now begin to formulate its organizational strategies. This could include either growth market strategies or consolidation strategies. With growth market strategies, the company attempts to gain more sales from an existing business line or penetrate new markets.

An alternative growth perspective might lead the firm to develop a new product or service that could generate sales from existing customers. A company that implements a consolidation strategy is paring either the products or services it offer or shrinking the market it serves.

Market Growth Strategies

There are four broad strategies that can guide a company’s growth; they reflect the internal organization and external market conditions. Internal capabilities and services are represented by the product dimension. External market factors, a reflection of the marketplace analysis, are represented by the market dimension.

Using the above product/market matrix as a guide, there are four growth strategies to consider:

Market Penetration

The market penetration strategy involves increasing the sales of your present products and services in present markets. This is a useful approach when your current market is strong and growing. Success with this strategy would involve attracting new customers or converting new users.

Market Development

This strategy involves initiating sales of existing products and services in new markets. This strategy is implemented when your existing markets are stagnant in terms of growth and market share gains because of strong dominant competitors.

Product Development

Product development involves providing new products to existing markets. Organizations pursue this strategy to meet changing customer needs, to take advantage of new technologies or meet the needs of specific segments of the market.

Diversification

Diversification entails developing new products or services for new markets. This strategy is followed when the growth in existing markets is nearly saturated and is not growing.

Analyzing The Competitive Market

Within the context of strategic planning, companies must analyze their competition. Not only should they assess the existing competition but also the potential ones.

Competitive intensity is affected by four major forces: the threat of new entrants | bargaining power of suppliers | bargaining power of customers | the threat of substitute products or services.

M. Isi Eromosele is the President | Chief Executive Officer | Executive Creative Director of Oseme Group - Oseme Creative | Oseme Consulting | Oseme Finance

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