The Strategic Market Planning is mainly related to the allocation of resources that are scarce and from which a return or utility is desired. It is a decision-making process that relates the current situation of a company with the desired situation for it in the long term, setting goals to achieve and specifying the best ways to do so.
The Strategic Market Planning takes as a starting point the Mission of the Company and its Business Definition, which establish for it a Field of Action, determined based on products and services (technology), markets served (customers) and needs satisfied (Benefits).
Once this starting point has been established, an Analysis of the Situation of the company and the competitive environment that surrounds it must be carried out, in order to identify strategic factors that have a relevant and significant impact on its operation, now or in the future.
Factors external to the company can be the Environment (economic, demographic, social), the Industry in which the company participates (size, structure, technology, products and services, marketing activities) and its Competitors (participation, products and services, distribution, promotion and sales).
These external factors are uncontrollable by the company and are considered as Opportunities when they affect it positively, and as Limitations when they affect it negatively.
Internal factors, controllable by the company, are considered as its Forces when they mean resources that are available to take advantage of opportunities and reduce limitations. And as Weaknesses when they represent vulnerable points that have the opposite effect: they prevent you from taking advantage of opportunities and make you more sensitive to the impact of limitations.
The purpose of this analysis stage is to have relevant information for strategic rather than statistical uses, therefore, more than the quantity of information to present, its quality and meaning are important.
Once this analysis has been carried out, a selection is made of those factors that stand out for their relevance and significance for the operation of the company, regardless of whether they are Opportunities, Limitations, Strengths or Weaknesses, but ranked according to their importance.
This list of Critical Factors (FOLD), then becomes instrumental for the formulation of the Strategic Plan and from them the objectives, strategies and activities for the company are derived.
There are two ways in which strategic analysis can be used to formulate a plan and establish specific courses of action to follow, now and in the future.
The first one consists of taking, directly, each of the Critical Factors separately and, based on their involvement, defining actions to take advantage of Opportunities, counteract Limitations, capitalize Forces or minimize / eliminate Weaknesses.
This procedure to formulate objectives, strategies and action plans is very useful in the short term and in fact can be done separately for each product or service of the company, each geographical region, etc.
However, he does not consider that the company, viewed as a whole, has limited resources and must decide how to allocate them among multiple courses of action.
A second way in which the information from the strategic analysis can be used refers to considering the business as a set of elements, and thus, determining what it is that you want to do with that set in terms of resource allocation.
For example, if you have four product lines, each of which generates a different proportion of total profits, it is important to analyze
How attractive is the market for each of them? How adept is the company at getting each of them to market?
Depending on the answer to these two questions, the head of the company must decide how much attention and how many resources to devote to each line to achieve the objectives of the company as a whole.
The attractiveness of the market for each line is derived from the Opportunities and Limitations previously analyzed and the Ability of the company to bring them to it resides in its own Strengths and Weaknesses.
This second procedure is more useful in formulating a long-term plan: it helps to define more clearly what position the company wants to have in the future, how to achieve that position through a strategic orientation and how each element of the whole will contribute to achieve it.
The Strategic Position defines the basic orientation that you want to give to the company, establishing a competitive difference that allows it to achieve a desired position within its market in the long term.
This desired position in the long term implies a challenge for the company, feasible to achieve and that reflects the vision that the responsible executive has of it. That is, the characteristics that he considers necessary to stand out from his competitors.
The strategic orientation of the company must include one or more commitments on which its success is based, establishing a competitive difference: giving customers better and different reasons to buy from the company and not from its competitors.
The Strategic Orientation must reflect more the resources that the company currently has, than the resources that are intended to be obtained in the future and must be so clearly defined as to regulate the behavior of the company at the level of operational Marketing decisions: product, price, distribution and promotion.
