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Tag: Strategic Management and Marketing Management

  • 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.

    🔹 PART A – STRATEGIC MANAGEMENT

    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.

    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

    3. Levels of Strategy

    Level Focus Area Example
    Corporate Level Overall scope and direction of organization Diversification, Mergers
    Business Level How to compete in the market

    Cost leadership, Differentiation
    Functional Level Implementation in each department

    HR, Marketing, Finance strategies

    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.

    🔹 5. Strategic Management Process

    Stages:

    1. Environmental Analysis

    2. Strategy Formulation

    3. Strategy Implementation

    4. Evaluation and Control

    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

    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.

    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.

    Corporate-Level Strategies

    Type Description
    Growth Expansion through new markets/products (e.g., diversification, mergers)
    Stability

    Maintain current position; used in mature industries
    Retrenchment

    Reducing scale due to losses (e.g., divestment, turnaround)
    Integration

    Expansion along supply chain – forward/backward/ horizontal
    Diversification

    Entering new markets or products (related/unrelated)

    Business Portfolio Analysis

    1️⃣ BCG Matrix (Boston Consulting Group):

    Category Market Share Market Growth Strategy
    Stars High High Invest
    Cash Cows High Low Maintain
    Question Marks Low High Selective investment
    Dogs Low Low Divest

    2️⃣ GE Business Model (General Electric):

    • Based on Industry Attractiveness and Business Strength.

    • Nine-cell matrix to decide investment priorities.

    3️⃣ Ansoff’s Product-Market Growth Matrix:

    Strategy Product Market Objective
    Market Penetration Existing Existing Increase share
    Market Development Existing New Enter new markets

    Product Development

    		 New Existing Introduce new products
    Diversification New New

    Expand into new business

    Step 3: Strategy Implementation

    Translating chosen strategy into action.

    Key Challenges:

    • Resistance to change

    • Resource allocation

    • Coordination between departments

    • Leadership and communication

    McKinsey 7S Framework

    Used to assess and align organizational elements for successful implementation.

    Hard S Soft S
    Strategy Shared Values
    Structure Skills
    Systems Style
    Staff

    All 7 factors must align for effective implementation.

    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

    🔹 PART B – MARKETING MANAGEMENT

    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.

    Modern Trends:

    • Relationship marketing

    • Digital and social media marketing

    • Green marketing

    • Experiential marketing

    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.

    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

    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.

    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.

    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

    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.

    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).