What is Strategic Planning?

ELO:THE UNIVERSITY OF QUEENSLAND, AUSTRALIA

Key Points for This Week

• Importance of strategic planning

• Steps in strategic planning

• How marketing fits into the strategic plan

• Some strategic planning tools

Disney Overview

Disney's Five ESPI Branches

1. Media Networks

2. Parks and Resorts

3. Studio Entertainment

4. Consumer Products

5. Disney Interactive

Offerings

• Movies

• Theme Parks

• Merchandise:

  • Mickey stuffies

  • Various food products (cookies, cereals)

• Others:

  • ABC and various TV channels

  • Numerous radio stations and cable networks

  • Multiple publishing groups and music labels

  • Disney Interactive and other digital ventures

Disney’s Strategy

• Acquired dozens of companies over the past two decades as a diversification strategy.

• Question of whether diversification was a good or bad idea leads to the need for understanding strategic planning.

Strategic Planning Defined

• The process of aligning an organization's goals and capabilities with changing marketing opportunities.

• Relies on:

  • Clear company mission

  • Supporting objectives

  • A sound business portfolio

  • Coordinated functional strategies

• Addresses critical questions:

  • Who are we?

  • What do we want to do?

  • How do we do it?

  • What is the market doing?

• Long-term planning, typically over 5 years, touches on various departments including MIS, marketing, accounting/finance, and R&D.

Steps in Strategic Planning

• Define the company mission.

• Understand what the company does.

• Analyze corporate culture and philosophy.

• Determine how to accomplish the mission.

• Identify the businesses that support the overall mission.

• Assess how each business implements the mission (e.g., Disney HQ vs. ABC and EuroDisney).

Defining the Company Mission

Mission Statement

• The organization’s purpose and directions for stakeholders.

Key Questions Addressed

• What is our business?

• Who is the customer?

• What does the customer value?

• What should our business be?

Extended Mission Statement

• Includes corporate philosophy and culture.

Corporate Philosophy

• Values and guidelines for operation, focusing on ethics and corporate social responsibility (CSR).

Corporate Culture

• Shared attitudes and behaviors among employees.

Disney’s Mission

• To be a leading producer and provider of information and entertainment worldwide.

• Aims to leverage its brands to create unique and innovative entertainment experiences and products.

Goals and Objectives Related to the Mission

• Primary goal: to be a leading entertainment producer.

• Objectives include:

  • Protect and acquire brands.

  • Maximize earnings/cash flow.

  • Allocate capital for growth initiatives.

Designing the Business Portfolio

• Determine what products/services to offer.

• Organize offerings into Strategic Business Units (SBUs).

Definition of SBU

• A unit with a specific mission and objectives, planned independently of other units.

• Disney has five SBUs: media networks, parks and resorts, studio entertainment, consumer products, and Disney interactive.

Designing Marketing Strategy

• Requirements for detailed planning

  • Market segmentation

  • Targeting specific customers

  • Positioning products

  • Developing the marketing mix (the 4Ps)

Strategic Planning Tools

ELO:THE UNIVERSITY OF QUEENSLAND, AUSTRALIA

Where Marketing Fits in Strategic Planning

• Marketing as a guiding philosophy centered on serving customer needs.

• Provides insight into market opportunities and the company’s capacity to leverage them.

• Focuses on market positioning, customer satisfaction, and retention.

Business Portfolio Analysis

• Collection of businesses/products in the company.

Key Analysis Steps

• Analyze current business portfolio and SBUs.

• Decide on investment strategies for SBUs.

• Develop growth strategies based on portfolio analysis.

Strategic Business Unit (SBU)

• A unit with distinct missions and objectives

• Must align with the overall mission statement.

• Can be a division, product line, or a single product/brand.

Analyzing Portfolios

• Methods to evaluate products for retention or discontinuation

• Tools like the Boston Consulting Group Matrix for growth strategies.

Boston Consulting Group Growth-Share Matrix

Metrics

• Market growth rate and relative market share used to categorize products:

  • Cash Cow

  • Dog

  • Question Mark

  • Star

Product-Market Expansion Grid

• Identifies four potential growth areas:

  • Market Penetration

  • Product Development

  • Diversification

  • Market Development

Disney Revisited

Future Acquisitions

• Aim for businesses related to mission and capabilities.

• Examples include Fox Family Worldwide, The Muppets, Pixar, Marvel, etc.

Diversification Strategy

Advantages

• Growth and risk spreading.

• Better use of existing resources.

Disadvantages

• High-risk nature and complexity of coordinating diverse businesses.

• Potential detriment to profitability based on excess diversification.