UGC NET MBA Unit-6

Strategic Management and Marketing Management

This unit covers both Strategic Management and Marketing, combining analytical frameworks, strategy formulation, implementation, and marketing decisions — all of which are frequently tested in UGC NET Management Paper II.

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🔹 PART A – STRATEGIC MANAGEMENT

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1. Concept of Strategy and Strategic Management

Strategy:
A long-term plan of action designed to achieve specific organizational goals by utilizing resources effectively.

Definitions:

• Chandler (1962): “Strategy is the determination of the basic long-term goals of an enterprise and the adoption of courses of action and allocation of resources necessary for achieving these goals.”

• Mintzberg: “Strategy is a pattern in a stream of decisions.”

Strategic Management:
The process of formulating, implementing, and evaluating strategies to achieve organizational objectives.

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2. Features of Strategic Management

1. Long-term and future-oriented

2. Integrates all functional areas

3. Involves environmental analysis

4. Continuous and dynamic process

5. Focused on achieving competitive advantage

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3. Levels of Strategy

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4. Types of Strategic Decisions

1. Planned – deliberate, rational decisions.

2. Emergent – evolve over time.

3. Adaptive – responding to environmental change.

4. Crisis – quick response to unexpected events.

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🔹 5. Strategic Management Process

Stages:

1. Environmental Analysis

2. Strategy Formulation

3. Strategy Implementation

4. Evaluation and Control

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Step 1: Environmental Analysis

A. External Analysis (Macro & Industry Environment):
Tools: PEST and Porter’s Five Forces

PEST Analysis:

Analyzes macro-environmental factors:

• P – Political and Legal

• E – Economic

• S – Social and Cultural

• T – Technological

Porter’s Five Forces Model (Industry Analysis):

1. Threat of New Entrants

2. Bargaining Power of Suppliers

3. Bargaining Power of Buyers

4. Threat of Substitutes

5. Competitive Rivalry

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B. Internal Analysis:
Examines internal resources and capabilities.

Tools:

1. Resource-Based View (RBV):

   • Firm’s resources are source of sustainable competitive advantage.

   • VRIO Framework: Valuable, Rare, Inimitable, Organized.

2. Value Chain Analysis (Michael Porter):
   Identifies value-adding activities to enhance efficiency.

   • Primary Activities: Inbound logistics, operations, marketing, sales, service.

   • Support Activities: HR, technology, infrastructure, procurement.

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Step 2: Strategy Formulation

The process of choosing the most appropriate course of action to achieve goals.

SWOT Analysis

• S: Strengths

• W: Weaknesses

• O: Opportunities

• T: Threats

Helps match internal strengths with external opportunities.

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Corporate-Level Strategies

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Business Portfolio Analysis

1️⃣ BCG Matrix (Boston Consulting Group):

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2️⃣ GE Business Model (General Electric):

• Based on Industry Attractiveness and Business Strength.

• Nine-cell matrix to decide investment priorities.

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3️⃣ Ansoff’s Product-Market Growth Matrix:

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Step 3: Strategy Implementation

Translating chosen strategy into action.

Key Challenges:

• Resistance to change

• Resource allocation

• Coordination between departments

• Leadership and communication

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McKinsey 7S Framework

Used to assess and align organizational elements for successful implementation.

All 7 factors must align for effective implementation.

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Step 4: Strategy Evaluation and Control

Process of reviewing and measuring strategy performance.

Steps:

1. Setting performance standards

2. Measuring actual performance

3. Comparing and analyzing variances

4. Taking corrective actions

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🔹 PART B – MARKETING MANAGEMENT

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1. Marketing: Concept and Orientation

Marketing:
A social and managerial process through which individuals and groups obtain what they need and want through creating, offering, and exchanging value.

Marketing Orientations:

1. Production Orientation – focus on efficiency.

2. Product Orientation – quality improvement.

3. Selling Orientation – aggressive promotion.

4. Marketing Orientation – customer needs.

5. Societal Marketing Orientation – customer welfare and sustainability.

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Modern Trends:

• Relationship marketing

• Digital and social media marketing

• Green marketing

• Experiential marketing

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2. Core Concepts of Marketing

• Needs, Wants, and Demands

• Value and Satisfaction

• Exchange and Transaction

• Markets and Segmentation

• Customer Relationship Management (CRM)

Customer Value:
Difference between customer’s perceived benefits and costs.

Customer Satisfaction:
When performance meets or exceeds expectations.

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3. Market Segmentation, Targeting, and Positioning (STP)

Segmentation:
Dividing the market into groups based on:

• Geographic

• Demographic

• Psychographic

• Behavioral

Targeting:
Selecting the most suitable segment(s) to serve.
→ Strategies: Undifferentiated, Differentiated, Concentrated.

Positioning:
Creating a distinct image in customers’ minds through branding, features, and communication.
→ “Positioning is not what you do to the product, but what you do to the mind of the prospect.” – Ries & Trout

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4. Product and Pricing Decisions

A. Product Mix:
Total range of products offered by a company.
→ Dimensions: Width, Depth, Length, Consistency.

B. Product Life Cycle (PLC):

1. Introduction – low sales, high cost.

2. Growth – rising sales/profits.

3. Maturity – peak sales, saturation.

4. Decline – sales fall, product may be withdrawn.

C. New Product Development (NPD):
Steps:
Idea generation → Screening → Concept testing → Business analysis → Development → Test marketing → Commercialization.

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5. Pricing Decisions

Pricing Objectives: Profit, market share, survival, prestige.
Pricing Methods:

• Cost-plus pricing

• Competition-based

• Value-based

• Penetration and Skimming pricing

Pricing Strategies:

• Penetration Pricing: Low initial price to gain market share.

• Price Skimming: High initial price to recover costs quickly.

• Psychological Pricing: ₹99 instead of ₹100.

• Differential Pricing: Different prices for different markets.

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6. Place (Distribution) Decisions

Marketing Channels:
Path through which goods move from producer to consumer.

Channel Levels:

• Zero-level: Direct (Producer → Consumer)

• One-level: Producer → Retailer → Consumer

• Two-level: Producer → Wholesaler → Retailer → Consumer

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Vertical Marketing Systems (VMS):

• Corporate VMS: Ownership-based control.

• Contractual VMS: Linked by contracts (franchising).

• Administered VMS: One dominant player controls channel (e.g., HUL, P&G).

Value Network:
Entire supply chain that adds value at every stage.

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7. Promotion Decisions

Promotion Mix Components:

1. Advertising

2. Sales Promotion

3. Personal Selling

4. Public Relations

5. Direct and Digital Marketing

Integrated Marketing Communication (IMC):
→ Coordination of all communication tools to deliver a consistent message.

Advertising: Paid form of non-personal communication.
Sales Promotion: Short-term incentives to boost sales (e.g., discounts, coupons).
Personal Selling: Direct interaction between salesperson and buyer.
Public Relations: Managing public image.
Direct Marketing: Personalized communication (email, SMS, social media).