The current panorama of the world economy is framed in an increasingly aggressive environment, with rapid and unpredictable changes and a high competitive rivalry of companies, and a more accentuated use of strategic management tools and market methods in all markets. sectors of economies. For this reason, it is essential to resort to new strategic approaches to manage the company's processes in such a way that they respond to the changes that are imposed in the environment and to assume the challenges that arise to achieve high levels of competitiveness and continuous adaptation and renewal. in the context in which they operate.
This monograph constitutes a tool for improving managers' knowledge of the market, for the creation of wealth that contributes to stimulating and strengthening management processes in companies, allowing them to identify the tools before changes in the environment.
From the perspective of Marketing as a functional area within organizations, taking as a theoretical model the structure and content of a Marketing Plan represents a pillar that interlinks the operation of the entire company since it can be planned, with a sufficient guarantee of success, Based on the responses we offer to market demands, for which we must be able to understand to what extent and in what way the future changes that the environment will experience will affect the company and establish the most appropriate strategies to take full advantage of them. for your benefit.
This monograph aims to develop a procedure that facilitates strategic planning from the perspective of Marketing to business.
Keywords: Diagnosis, Planning, Direction, Strategy and Marketing.
Development
The Strategic Direction
The current business environment has become more complex, dynamic and uncertain, it is characterized by different factors, among which technological changes, greater knowledge on the part of customers, and the growing internationalization and maturity of markets stand out. These characteristics transform the environment in which companies develop, and for this reason they have seen the need to improve their management system, adapting it to the new characteristics of the environment; taking in this way a strategic attitude of direction.
The strategic approach is then presented as the alternative to achieve a better performance and adaptation of the entities with their environment; characterized by an extroverted, willful, anticipatory, critical and open to change attitude. Now adapting is a problem of survival, generating change within the organization is the means to be competitive and the strategic planning model is the paradigm of change.
With the appearance of strategic planning, there was considerable progress in the business field, by constituting a rational analysis of the opportunities and threats that the environment presents for the company, of the strengths and weaknesses of the same in the face of this environment and the selection of a strategic commitment of managers in relation to the company.
Despite the advances revealed by the Strategic Planning, the expected results that it outlined were not always achieved, generating mistrust before the possibility of its success, emerging as a partial solution to the strategic problem, since it only takes into consideration the economic variables and technological, ignoring the sociopolitical variables, of great relevance in the current situation. In addition, it focuses on the company-environment relationship, assuming the organization without internal structural changes.
Due to the aforementioned reasons, Strategic Management arises, which unlike its predecessor, Strategic Planning, was shown as the process that covered the entire strategic problem, since it was not enough to plan strategically, but it was necessary to direct all processes with a perspective, with strategic thinking.
Menguzzato, Bartoli and Hermel (1989) define Strategic Management as “a theoretical structure for reflection on the great options of the company, a reflection that is based on a new organizational culture and a new management attitude, where it is necessary to go to meet the environment. It is an attempt to improve the direction and management of an organization, using the strategy to guide its actions, but integrating the notions of preparation for the start-up and the allocation of resources ”.
However, the success of the Strategic Management depends on the alignment of most of its members in a common purpose, forming part of a single vision, with a mission, values and clear and shared organizational strategy; and creating the necessary conditions for the development of the strategic process with sufficient realism and freedom, promoting the coordination and flow of knowledge and information between the management and the rest of the organization.
Strategy levels
Organizations to guarantee the results of their activity have an organizational structure for decision-making and the performance of general work. The fact that companies find themselves in the need to improve their management in the face of the increasingly turbulent environment determines the hierarchy of business strategy by levels:
Corporate, business or global level.
Also called master strategy. At this level, the company is considered in its environment, analyzing in which activities it can participate and how they can best be combined. The corporate level is responsible for the design of a corporate strategic plan that should guide the entire company, defining the corporate mission as the supreme objective. It tries to identify the scope of business or activity of the company, its distinctive capabilities and the synergistic effect resulting from proper integration.
Business strategy or at the level of Strategic Business Units.
The strategic business unit is also called product-market, strategic activity units, strategic areas or segments. At this level, a strategic plan for the area is drawn up and the activities that correspond to it are developed in the most efficient way. It is based on distinctive capabilities and competitive advantages, also relying on the synergy resulting from properly coordinating and integrating the different functional areas of each activity.
Functional strategies or at the activity area level.
It refers to the way to better use the resources and skills in each functional area of the different strategic business units in order to achieve a better competitive position and the desired profitability. The area of marketing, production, financing, research and development, human resources, etc. are analyzed at this level.
In general, each level has its "hierarchy", specificities and vital importance, so the success of the global Strategic Direction depends on the coherence and coordination that exists between them.
Phases of the Strategic Process
The Strategic Management is a system capable of achieving the objectives, provided that the resources and capabilities of the company are taken into account. This process is carried out correctly when its main phases are related and interact: formulation, implementation and evaluation.
Formulation Phase.
In this first moment of the strategic process, an analysis is developed based on the study of three essential elements that determine the strategic space in which companies operate, which in turn constitute the axes on which their strategy will be built. These are: general aims and mission of the organization, external analysis and internal analysis.
Determination of the Mission and Vision.
The Mission represents the essence of the company, its identity and personality at the present time and for the future. On the one hand, the company's reason for existing is considered, defining the boundaries of responsibility and the field of specialization, and on the other, the general expression of what the company wants to be, its aspirations regarding its role in society.
It also constitutes an answer to three basic questions: What do we do? Who do we do it for? And How do we do it?
Its preparation is an important part of the strategic process, by providing clarity and consistency of purpose, since it provides a frame of reference for all the decisions that will have to be made, making it possible in turn to obtain the commitment of all those involved through a clear communication of the company concept. It can also serve as a public relations document if it has been drafted properly, gaining the understanding and support of outsiders who are important to the success of the organization.
The Mission is not required static, the company being a changing system over time, the mission can vary when necessary, mainly when the initial premises that founded it have changed. According to Phillip Kotler: “missions are not reviewed in the short term and with each change that may occur in the economy, but in any case companies must redefine their mission if it has lost credibility and no longer defines the optimal course of action for the company".
The Vision, meanwhile, is a representation of what the company should be in the future in the eyes of customers, workers, suppliers, etc. It is a projection and future image of the entity, from five to twenty years in sight.
The formulation of the vision of a company has to be done involving each and every one of its stakeholders, since it has to be integrated into the subconscious of all the members, it has to be really felt as something of their own and not something established by the managers. Its adequate and precise formulation constitutes one of the greatest challenges for your management team.
A vision statement should be brief, easy to grasp and remember, credible and consistent with your strategic values and mission, while inspiring and challenging your achievement, showing the essence of what you should become.
A vision must, when compared with the realities of the present, need to continue its search for new paths, from which it follows that its constitution, as in the Mission, is not static.
External Analysis: Macro and microenvironment.
The external strategic analysis includes the analysis of the macro and micro environment of the company, which are made up of actors and forces external to the organization, which influence the ability of the company to develop and maintain successful relationships with the target audience.
The study of the environment allows us to assess the behavior of the market, as well as the business opportunities and threats to which it is subjected. The organization cannot directly influence the behavior of the environment, but knowing it can help maintain competitive advantages and improve the company's position with respect to competitors.
The Macroenvironment.
Macroenvironment is defined as all the forces that act on the companies of a socioeconomic system and that are independent of the function they perform and the sector where they are classified; which can play an opportunity or a threat, and affect companies to a greater or lesser extent depending on their characteristics.
These forces are called strategic environmental factors, given the significant impact they can have on the development of the organization's activities and its results.
The main strategic factors of the macroenvironment can be grouped into:
- Demographic environment: the population, its size, distribution, geographic density, migratory trend, its age distribution, the birth rate, mortality and marriage, ethnic, social and religious structure must be taken into account. Economic Environment: the factors that affect the purchasing power of consumers and their spending models must be taken into account. Environmental Environment: elements such as scarcity of raw materials, increased energy costs, pollution levels, etc. must be taken into account. The deteriorated state of the environment is one of the main problems that companies and the population must face. Technological environment:Factors such as the accelerating pace of technological innovations, research and development budgets must be taken into account. Trends in technology must be observed. Political-Legal Environment: decisions can be affected or benefited by the political environment made up of laws, public institutions and pressure groups that influence and limit certain organizations and individuals in society. Sociocultural environment:The society in which one lives outlines basic beliefs, values and social norms. Fundamental beliefs and values are transmitted from parents to children and are reinforced by the most important social institutions (schools, churches, companies and government). Although these core values are persistent, secondary cultural values undergo changes over time.
The Microenvironment.
The Microenvironment is made up of a set of factors that exert direct influence on the results of the organizations which are given by an analysis of the market where the activity of the company and the competition takes place.
Market analysis leads to the definition of the target audience, with the intention of knowing aspects such as: structure (market share), qualitative and quantitative aspects of demand and market profile.
While the study of competition is usually governed by the opinion of Michael Porter in his study on the subject, he raised the existence of the five competitive forces called "Porter's Competitive Forces" which currently constitute a mandatory reference when analyzing the competitive environment.
Each of these five forces, as well as their combinations, influence the results to be obtained in a competitive environment, so their knowledge will allow us to determine what type of environment the company operates in, in which one it is advisable to be, in short, what strategies should we adopt. Next, these forces will be explained since they constitute an aid for the analysis of the competitive environment.
5 competitive forces of Michael Porter
Figure No. 1: The Five Competitive Forces by Michael Porter. Taken from Menguzzato. Page 152.
- Threat of entry of new competitors: The risk of competition will depend on the entry barriers and the reaction of existing competitors that new competitors can expect. The main barriers against competition are: economy of scale, product differentiation, capital requirement, cost disadvantages regardless of size, access to distribution channels, and government policy. Intensity of rivalry between competitors in the sector:Rivalry between competitors is a game for positions. It will be smaller or larger depending on the size and power of the competition in the market, the differentiation of the product, the rapidity of the growth of the industry and others. Tactics such as price competition, new product introductions and the hit of advertising are used here. Threat of substitute products: Substitute products are goods that can be consumed or used instead of others in some of their possible uses. They are products that limit the potential of industries, due to the attractiveness that the perceived retribution of their prices may have. The more attractive the alternative prices offered by substitutes, the stronger will be the repression of profits in the industrial sector.Bargaining power of customers: Consumers can demand lower prices or an increase in quality, this constitutes a bargaining power that depends on the relative importance of the purchases they make, the level of standardization of the products they buy, Inter alia.
Therefore, it is important for the company to know who are the customers to whom the product or service is going to be directed ?, being a fundamental element the determination of the market segments, their characteristics, unmet needs, size, purchasing power and behavior.. To comply with this, an exhaustive study must be carried out that includes demographic, psychological, geographical and lifestyle criteria, which provide sufficient information to achieve acceptance of the final product or service.
Segmentation identifies and defines the profile of different groups of buyers who may prefer or need different products and different marketing mixes. Then the company will decide which segments present the greatest opportunities (they will be those whose needs can be better satisfied than the competition).
In this way, the company will be in a position to set its objectives with more foundation, since it will better understand the needs of each specific group. On the other hand, the information obtained from this segmentation becomes a fundamental input for the design of products or services and, above all, for the definition of commercial strategies.
Bargaining power of suppliers: The bargaining power of suppliers depends on the characteristics of their market situation and the relative importance of their sales. It can be exercised through mechanisms such as increasing prices or reducing the quality of your goods.
The goal of every organization is to find a position in the industry where it can best defend itself against these forces or can influence them to be favorable to them.
Internal analisis. Functional analysis.
The internal analysis tries to identify and assess the current strategy and the position of the company against the competition. Through it, the aim is to get an overview of the main resources, the means and skills to deal with the environment; as well as evaluating the strong points that must be exploited in a strategy, and the weak points that will be tried to remedy or eliminate.
This analysis constitutes a rather complex task, which must be oriented to the evaluation of the potential of the company, of its total capacity, as a system that includes the specific capacities developed for each basic function of the company, which turn out to be material assets, immaterial and human.
For the development of this type of analysis, different techniques are taken into account, such as: functional analysis, strategic profile, leverage, value chain and competencies. The technique or instrument that is approached in the investigation is the one referring to the functional analysis, in order to elaborate the strategic diagnosis.
Functional analysis : Its objective is to analyze what the company is doing in each of its functions in order to determine its strengths and weaknesses and to carry it out, the key aspects are established by functional area that must be analyzed.
Address
The management system within its characteristics explains the success or failure of companies. Among the key aspects that it analyzes are: the organizational structure, emphasizing the formal and informal organization, authority and its degree of centralization, degree of organizational flexibility and organizational climate. Likewise, it analyzes the management, with its styles and real functions, leadership styles, contribution to the improvement of the organizational climate and adaptation to the environment and type of strategy; motivation systems, their procedures for job enrichment; information systems and their structure, etc.
Human Resources.
Investigates and studies the entire entity's personnel process, as well as the recruitment system; degree of qualification, training and development of human resources; promotion, incentives and rewards system; safety system at work and the degree of participation and integration of teamwork.
The procurement function consists of purchasing the materials necessary for the activity of the company and storing them while each production or marketing process begins. The procurement function is made up of three fundamental aspects: purchasing, warehousing and inventory management.
Production .
It studies the characteristics and extension of the production process, as well as the degree of integration, the technology of the process and the production system used. Analyze the cost components and their past evolution and compare their structure with those of the competition; global productivity and that of each of the factors; the experience effect if the company owns it; the condition of the equipment and its maintenance policies; control of inventories and of production and quality; the supply policies and the location, number and size of the plants.
QA.
Understanding quality from the customer's point of view (ability to satisfy their needs) and from the product point of view (zero defects and incidents). The quality must be measurable. In this sense, the objective is to achieve quality standards for the product and service provided. To meet the minimum requirements in this matter, the ISO 9001 standard establishes the parameters for the implementation of a Quality Management System, which is a strategic way of applying quality solutions in any company.
Research and Development (R&D) .
It includes in its analysis the states of the different patents and licenses of the entities; the analysis of investments in R&D; innovation and know-how potential and research and development capabilities specified in products and / or processes.
Economic - Financial .
Study the financial analysis of the company, which includes analysis of the profitability of investments and the level of profits; liquidity and solvency; rotation funds and analysis of the economic-financial balance; financial structure and general level of indebtedness, with analysis of the different sources of financing, including dividend policies and self-financing; financial costs and risks of loans granted to clients.
The variables that make up the marketing mix (product / service, price, distribution and communication) are analyzed, as well as the elements that relate it: the evolution of market share, demand and potential market; the characteristics, breadth and technological components of the products or services; the relative level of prices in relation to the competition, its evolution and formation; the positioning of the brand; structure of distribution channels; role and operation of the sales forces, their choice of media and advertising media.
Business wallet. Portfolio Matrix Boston Consulting Group (BCG).
The business portfolio is made up of all the products that a company sells for a certain market. Together with the BCG Matrix or Boston Consulting Group Matrix they form an internal analysis tool that allows determining which products should be included in the company's portfolio and which ones should not.
The BCG Matrix allows a strategic analysis based on two factors, the market growth rate and market share. Its purpose is to help in making decisions about the different approaches directed to the different types of businesses or their Strategic Units (SBU), in other words, to determine which are the best and worst resources in terms of return on investment. Therefore, the main function of the BCG Matrix is to analyze the company's product portfolio to place them in the different quadrants and from there to make strategic decisions. Each of these quadrants is symbolized by a cartoon. (See figure No.2).
BCG Matrix - Boston Consulting Group
Figure No. 2: Author's version according to the BCG Phillip Kotler Matrix , “Marketing Management” Millennium Edition. Chapter 3 page 77.
Main characteristics of the strategic business units (SBU):
Star
The “stars” are those products that generate money (liquidity), but that require a considerable investment to be able to consolidate their position in the market. In addition, they are products that are in a growing market and with a considerable market share. So they would be the leading products on the market with great growth potential.
Question mark
The "question marks" are products with rapid growth, but with low participation, they need a lot of investment depending on the strategy that could end up becoming star products or dog products.
Cow
The "cows" are the products that are already consolidated in a market with little growth. The objective is to maintain the competitive situation of these products because they are the ones that generate money for us to later invest in others.
Dog
The “dogs” quadrant have low market share compared to competitors and operate in a slow growing market. In general, they are not worth investing in, as they generate low returns or losses.
As time passes, the SBUs change their position in the growth-participation matrix. Thus, it becomes a tool for experts in strategic planning; They use it to try to value each business and assign to them the most reasonable objectives and resources.
A company should strive to maintain a balanced portfolio, focusing on categories of the question mark and star typologies, which have greater future prospects, in addition to cow typologies, which are those that provide income through which investments will be made, shares of research and marketing.
The BCG approach proposes four types of strategies, all of them in terms of market share. Determining which is the most appropriate depends, among other reasons, on the current market of the product, its life cycle, the company's resources, and the possible reactions of the competition.
These strategic actions, which convey its objectives expressed in market share, are four:
- Increase market share: it can be an offensive or defensive action, depending on whether you are looking for an increase in profitability, in the first case; or, in the second, if you are looking to obtain the critical market share that allows you to survive in the market: Preserve market share: which is appropriate for products that are in the maturity stage and have large market shares relative, due to the fact that at this stage, purchasing habits are usually more stable and difficult to change, and an attempt to increase the quota would be at the expense of the rest of the consumers. It is the most widely adopted strategy, always considering what is the most profitable way to maintain market share. Harvest: it consists of maximizing short-term profits and cash flow, allowing market share to decrease.To carry out this strategy it is necessary to reduce costs as much as possible. It is the most appropriate strategy for the range of products that has a small market share in markets with little growth. Withdraw: it consists of liquidating the product, since the resources can be better used elsewhere. It should be applied to those strategy products with a market share less than critical.
SWOT matrix
Once the study of the environment and the company has been done internally, the SWOT analysis is carried out, a strategic tool that allows knowing the current situation in which the organization is found through knowledge of the opportunities, threats, strengths and weaknesses.
As the opportunities and threats are external, they are not susceptible to being modified. Opportunities are those favorable possibilities that must be recognized or discovered in the environment in which the company operates, and that allow obtaining competitive advantages. On the other hand, threats are those situations that can even threaten the permanence of the organization, as they are unfavorable factors for business growth.
Instead, the strengths and weaknesses are variables extracted from the internal analysis of the organization, it is possible to act directly on them. These are determined by the resources and capacities that the company has. Strengths are those factors that the company has to maintain a privileged position against the competition; while weaknesses are those that cause an unfavorable position against it.
From the list of the main elements above, the position of the company in the SWOT matrix is defined and the existing selection between the selected external and internal factors is established. Below is a table that indicates the strategic actions to be carried out by the company according to its position in the parent company:
Strategy in the SWOT Matrix
Figure No. 3: Adapted from Menguzzato. 1991.
Quadrant DA:
The objective of the D - A strategy is to eliminate weaknesses and minimize threats. For example, an entity that has to face external threats and internal weaknesses, is logically in a critical and precarious situation; so you have to fight to survive and even decide on the settlement option.
The D - A strategy can also be oriented in the direction you prefer to merge or such
Instead of reducing certain operations and struggling to overcome threats by overcoming weaknesses, position D - A all insist on avoiding it.
Quadrant DO:
In this case we try to minimize weaknesses and make the most of opportunities.
In an entity, opportunities can be identified in the external environment, but in turn, have organizational weaknesses that prevent or hinder the progress of the progress of production or services.
Quadrant FA:
The foundation of this strategy is based on the strengths of the organization that can counteract threats from the environment, so the trend would be to rely as much as possible on strengths and minimize threats.
Quadrant FO:
We would all like to be in an entity or organization where we have a strong position and with opportunities, to be leaders due to internal strengths, as well as to be able to take full advantage of the opportunities in the environment; and being able to eliminate weaknesses, as well as minimize threats, is an enviable strategic position for any organization.
For the relational analysis, the cross-impact method is used, which aims to analyze the existing interrelationships between the key variables identified, since it evaluates how a strength can contribute to taking advantage of the opportunity and counteracting the effect of a threat, and how weakness makes it impossible to take advantage of the opportunity and potentiate the threat.
Based on the results obtained in the preparation of the SWOT Matrix, the company is in a position to define what its strategic problem is, and formulate the strategic solution that allows it to solve said problem. Which would be as follows:
Problem: " If threats materialize taking into account weaknesses, strengths cannot be used to take advantage of opportunities." Solution: "Fully utilize the strengths, on the opportunities that arise, to minimize threats and overcome weaknesses."
Definition of objectives
Organizations need to set objectives, which define where the organization is going with its activity, the range and intensity that it works, to achieve the proposed goals. Based on these, the desired state can be evaluated against the actual results achieved and from this analysis determine the corrective actions to meet those objectives.
The objectives in an entrepreneurial business must be focused on several levels, since it is desired to achieve daily, with each business unit or functional area, or where we want to be in a year or what position the company should achieve in the medium term, as well as in general what is the reason for the existence of the company.
In the organizational framework, business objectives can be classified into three levels:
- Supreme objective: It refers to the mission of the entity. General or strategic objectives: they express the goals of the company at a global and long-term level. These objectives are the result of a feedback process between leaders, employees and the analysis of the specific environment of the company. They are defined as key elements for the definition of strategic objectives: profitability, efficiency, market share, growth, image, innovation, staff satisfaction, customer satisfaction, among others. Operational objectives: These are the objectives that are set at all decision levels or in the different units that make up the company in order to specify the general objectives and make them operational.
Based on the results obtained in the SWOT matrix, the company is in a position to define the basic strategic objectives and formulate the strategies to achieve them. The strategic objectives can be grouped into:
- Growth: It is about increasing market share through internal growth, which means growth in traditional products and markets, or through external growth, which means obtaining through the agreement or acquisition and control of other companies. Maintenance: Zero relative growth, maintaining the competitive position. Control of development towards an efficient size, seeking the efficiency of the organization. Restructuring: Recovery of a favorable competitive position that has been lost, through the reorientation of the company's activities, structural changes, production procedures, etc.
Strategy Formulation
The strategy of a company is the set of actions and decisions aimed at finding a differential advantage or competitive advantage that gives it a strong and defensible position in the long term against competitors. With this analysis, strategic diagnoses are achieved that will guide the organization to growth, maintenance, or restructuring.
Basic or Generic Strategies.
Within the basic strategies of the company, the generic competitive strategies of Porter stand out, also defining “how to undertake offensive or defensive actions to create a defensible position in a sector, to successfully face the five competitive forces and thus obtain superior performance. on investment for the company ”.
Basic strategies can be adopted in different ways depending on whether they are based on a competitive advantage in terms of costs, or based on an element of differentiation.
The three generic competitive strategies that can be assumed, based on the approach proposed by Michael Porter are:
Cost Leadership: It consists of achieving a competitive advantage through a cost advantage, the company will be in an advantageous position not only against competitors, but also against suppliers and customers.
Other characteristics of this type of strategy is to focus on a few products from which to obtain large volumes of production that allow reaching a high market share, high factor productivity must be achieved that allows a reduction in unit costs of production.
In general, assuming a cost leadership strategy protects companies against the five competitive forces, since it is the least efficient competitors that will suffer the impact of the competitive struggle.
Differentiation: It seeks that the company in general, or some of its elements in particular (products, services, technology, quality) are perceived by the client as unique.
Differentiation acts as a barrier to entry or protection against competition. This type of strategy requires that the company possess certain skills that allow it to achieve, maintain and develop that differentiation. In addition, this type of strategy allows to achieve superior benefits to the competitors since it is aimed at exclusive products for high-income segments.
Focus or niche: It lies in focusing on a market segment, to reduce its scope of competition, this strategy can be combined with the strategy of leadership in cost or differentiation, by one means or another the company intends to achieve a competitive advantage in the segment or niche in which it competes.
The adoption of one or another generic strategy more appropriate to the possibilities of the company is an essential strategic tool and a sustainable and lasting competitive advantage over all competitors and in a given market.
Growth Strategies
The Ansoff Matrix is the tool that allows to determine the strategic direction of growth of a company. It will help us make a decision on which is the best option to follow: market penetration strategy, new product development strategy, new market development strategy or diversification strategy. It is shown in the following table:
Marketing and Product Development
Figure No. 4: Phillip Kotler, “Marketing Management. Analysis, Planning, Management and Control ”.
Companies apply growth strategies in order to increase their market share and to protect themselves from competition.
- Internal Growth: The company expands creating a greater productive capacity. External Growth: When the increase in business size is supported by the acquisition of other companies in the sector in order to obtain greater power in the market, through cooperation by establishing agreements with other companies to carry out a series of activities that lead to a greater presence in that or other markets. Specialization: It can be achieved by companies through market penetration, geographical expansion to new territories and diversification of marketing activities (offering complementary products, searching for new customer segments and creating substitute products).Diversification: It is the launch of new products to the market, it is the most drastic and risky growth strategy, the entry into new activities that are related to the one that exists since they can be of a technical or commercial nature looking for some synergy. Among them are: horizontal and vertical diversification. Internationalization: Search for opportunities and take advantage of them outside the national territory. As are direct and indirect exports, the latter exemplified as licenses, franchises, cooperations and alliances.
Marketing strategies
Once a company has defined what type of competitive strategy it is going to adopt, be it a sales strategy, a positioning strategy, a strategy for taking advantage of business opportunities; You can go on to develop the specific strategies for each of the Marketing Mix components, which are set out below:
- Product: In marketing, a product is everything, tangible or intangible, that is offered to a market for its acquisition, use or consumption and that can satisfy a need or desire. Product can be called material objects or goods, services, people, places, organizations or ideas. Decisions regarding this point include the formulation and presentation of the product, the specific development of the brand, among others. It should be said that the product has a life cycle that changes according to the response of the consumer and the competition. Price:It is the exchange value of the product, determined by the utility or satisfaction and the use or consumption of the product. It is the only element of the marketing mix that generates income, it is the one that is fixed in the shortest term and with which the company can adapt quickly according to the competition. On the other hand, it is important to note that the price is closely linked to the feeling of quality of the product, as well as its exclusivity. Distribution:Element used to ensure that the product or service reaches the customer satisfactorily. The distribution policy has four aspects: distribution channels, distribution planning, physical distribution and merchandising, which is nothing more than a technique to increase profitability at the point of sale. It is the physical approach of the offer to the customer, which considers the effective management of the distribution channel, having to ensure that the product reaches the right place, at the right time and in the right conditions. Communication:It is a means of interaction with the client, as long as it seeks to inform or spread a message and that this has a response from the target audience to which it is intended, it is not only advertising, but also includes public relations, personal selling, promotion sales and direct marketing. It is the psychological approach of the offer to the client.
Implementation Phase.
The implementation phase proceeds once the strategies to follow have been determined. Here the defined strategy or strategies are put into practice, being necessary to translate the lines of action designed into strategic and tactical plans, programs and budgets, in which the concrete actions to be undertaken in the different areas and at different organizational levels will be specified, increasing the degree of specificity as they approach the operational level of the company's organizational structure.
Evaluation phase
This last phase ends the strategic process by evaluating and controlling the results of the implementation of the strategy, while serving as feedback to the system, allowing not only correction but also prevention, through proactive action.
Rationale
The term marketing of Anglo-Saxon origin, emerged in the US at the beginning of the 20th century. In 1910 when a course called "Marketing Methods" appeared at the University of Wisconsin. Several have been the definitions of Marketing given by different authors, among which the following stand out:
The American Marketing Association (AMA) defines Marketing as follows: “Marketing is the process of planning and carrying out the conception, pricing, promotion and distribution of ideas, goods and services to create exchanges that satisfy the objectives individual and organizational. "
Miguel Santesmases. "Marketing is a way of conceiving and executing the exchange relationship, in order to make it satisfactory to the parties involved and to society, through the development, valuation, distribution and promotion, by one of the parties of the goods, services or ideas that the other party needs ”.
Philip Kotler. “Marketing is a social and managerial process through which different groups and individuals get what they need and want; creating, offering and exchanging products with value for others ”.
However, despite their differences, in one way or another, all definitions agree that customer or consumer satisfaction is the main thing, placing it as the center of activity.
One of the most useful and important characteristics of Marketing consists of being able to plan, with a good guarantee of success, the future of our company, based on the responses we offer to market demands. We have already said that the environment in which we position ourselves is constantly changing and evolving, the success of our company will depend, to a large extent, on our ability to adapt and anticipate these changes.
We must be able to understand to what extent and in what way the future changes that our environment will experience will affect our company and establish the most appropriate strategies to make the most of them for our benefit.
Marketing planning of a company is what is called Marketing Plan, which is nothing more than “the process by which companies allocate their resources to marketing objectives and opportunities. It is the selective function of facts, future assumptions that allow foreseeing and proposing the activities necessary to achieve planned marketing objectives ”.
On the other hand, the Marketing Plan constitutes a document that collects the strategies, objectives and actions to be carried out by the organization in a given period of time to achieve a correct commercialization of its products or services within the market.
However, the fact that a Marketing Plan is included in a written document is not synonymous with the fact that it consists of a static plan, without constant feedback, since this allows periodic reviews and controls to be carried out to solve problems in advance., assigning specific responsibilities and tasks, becoming a valuable management tool for the company.
Within the Marketing Plan itself there may be several plans, either based on a complete line of products or services, a specific product aimed at a specific market, a new product or product line, an identified key market, or a territory specific geographic location, among others.
Some of the reasons why the importance of a Marketing Plan is recognized are:
- It is the main element of strategic management of the marketing management of the entire company and the basis on which all operational plans are developed. It provides management with a valid and useful management document for decision-making that allows achieving the objectives strategy of the entity, forcing those responsible to organize themselves and enabling good communication between all the people and areas of the company. It evaluates the current situation of the product or service in the company and allows to effectively maintain desired positions in specific markets. Marketing results in greater profitability and long-term stability, risks and problems in the organization are reduced. It allows controlling and evaluating management based on the established objectives, comparing current results with previous ones,Dynamizing the management of the company. Develops marketing programs and actions related to distribution, sales, prices, promotion, advertising, budgets that must be executed to achieve the previously established objectives. Identifies the most promising business opportunities for the entity. It is useful to analyze the real situation of the competition. It establishes specific volume and participation objectives for future periods. It allows to reflect on the present and future of the company and the market in a systematic way, allowing a rethinking of the objectives and strategies outlined.Budgets that must be executed to achieve the previously established objectives Identifies the most promising business opportunities for the entity It is useful to analyze the real situation of the competition Establishes specific volume and participation objectives for future periods It allows to reflect on the present and future of the company and the market in a systematic way, allowing a rethinking of the objectives and strategies outlined.Budgets that must be executed to achieve the previously established objectives Identifies the most promising business opportunities for the entity It is useful to analyze the real situation of the competition Establishes specific volume and participation objectives for future periods It allows to reflect on the present and future of the company and the market in a systematic way, allowing a rethinking of the objectives and strategies outlined.enabling a rethinking of the objectives and strategies outlined.enabling a rethinking of the objectives and strategies outlined.
The Marketing Plan is the central instrument to direct and coordinate the Marketing effort. Thus, companies that want to improve their effectiveness and efficiency in marketing, must learn how to develop and manage healthy marketing plans.
There are different models; However, there are coincidences of criteria regarding the following components: The methodology for developing a marketing plan is as follows:
- Executive Summary: Presents a brief summary of the main objectives and recommendations of the plan. It is aimed at senior management and allows you to quickly find the main points of the plan.Marketing Objectives: Statement of what will be achieved, through Marketing activities.Situational Analysis or SWOT (SWOT): Identification of Strengths (F) Opportunities (O), as well as its Weaknesses (D) and Threats (A) Marketing Strategy: Activity of selecting and describing one or more target markets and creating and maintaining a Marketing mix that produces mutually satisfactory exchanges with the target markets. Marketing: The set of controllable tactical instruments of marketing, product, price, place (distribution), and promotion (communication),that the company mixes to produce the response it wants in the target market. Action Programs: They detail the way in which the Marketing strategies will become specific action programs that include the following questions; What will be done? When will it be done? Who will do it? How much will it cost to do it? Budget: It is calculated to know the amount of cash it will cost to implement the Marketing Plan that is being developed. This allows a judgment on the viability of the plan. Controls: Outlines how progress will be monitored and allows top management to study the results of implementation and detect products that are not meeting their goals.They detail the way in which Marketing strategies will be converted into specific action programs that include the following questions; What will be done? When will it be done? Who will do it? How much will it cost to do it? Budget: It is calculated to know the amount of cash it will cost to implement the Marketing Plan that is being developed. This allows you to make a judgment on the viability of the plan. Controls: Outlines how progress will be monitored and allows top management to study the results of the implementation and detect the products that are not reaching their goals.They detail the way in which Marketing strategies will be converted into specific action programs that include the following questions; What will be done? When will it be done? Who will do it? How much will it cost to do it? Budget: It is calculated to know the amount of cash it will cost to implement the Marketing Plan that is being developed. This allows a judgment on the viability of the plan. Controls: Outlines how progress will be monitored and allows top management to study the results of implementation and detect products that are not meeting their goals.It is calculated to know the amount of cash it will cost to implement the Marketing Plan that is being developed. This allows a judgment on the viability of the plan. Controls: Outlines how progress will be monitored and allows top management to study the results of implementation and detect products that are not meeting their goals.It is calculated to know the amount of cash it will cost to implement the Marketing Plan that is being developed. This allows a judgment on the viability of the plan. Controls: Outlines how progress will be monitored and allows top management to study the results of implementation and detect products that are not meeting their goals.
Conclusions
In the monograph, a theoretical framework was established, establishing studied concepts from renowned authors on the subject, raising points of agreement between them and adopting the criteria that contribute to forming a global vision of the importance of strategic planning for modern companies.
A successful business requires adapting and responding to a market that is constantly changing, so it develops a market-oriented strategic planning. Planning involves deciding in the present what needs to be done in the future. This process involves the definition of objectives, strategies and actions, and an anticipatory action, therefore, proactive.
To achieve competitive positioning in modern companies, it is necessary to diagnose their strategic situation, making marketing plans allows companies to know their market, analyze the competition, and know both the opportunities and threats in their environment and their own strengths and weak.
Bibliography
- Barreiro Pousa, Luis. "Master in Business Administration. Marketing Course. Support Material ”, January 2010.Cutropía, Carlos. "The Marketing Plan. How to elaborate it with computer aid. ”1996. Hernández Cesáreo, Ricardo del Olmo and Jesús García: The Strategic Marketing Plan. Practical guide to develop it step by step. Management Edition 2000.Kotler, P. “Marketing Management. Millennium Edition ”. Pearson Education, SA 10th Edition. Madrid. 2002 Kotler, Philip, and Gary Armstrong. Eleventh Edition, Mexico, Prentice Hall Hispanoamericana SA, 1996. P: “Marketing Management. Analysis, Planning and Control ”, Prentice Hall, Madrid, 1993, Page 52.Lambin, J. J:“ Strategic Marketing ”. McGraw-Hill. 2nd Edition. Madrid. 1988López, T: "Marketing Plan for the Hotel Santa Isabel". Diploma work. 2007Menguzzato, M and Renau, JJ:"The strategic direction of the company. An Innovative Approach to Management ”. Madrid. Editorial Ariel. 1991Porter, Michael E.: “Competitive advantage. Creation and sustenance of a superior performance". CECSA, Mexico, 1986 Sainz de Vicuña, Ancín, José M. The Marketing Plan in practice. Second edition. Madrid, 1995. Yañez González, Eugenio: "Strategic direction, strategic decisions", June 1991.
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