Page 33 - Marketing the Basics 2nd

Marketing as a corporate Function 25
CORPORATE STRATEGY
Typically, corporate strategy is crafted in a hierarchical fashion. Managers at the highest levels of the organization craft corporate strategies that take into account the structure of the industry (or industries) within which they operate and the companies against which they compete. The managers at the business unit level develop the strategies to achieve the goals and provide guidelines and profit targets to product-level managers who develop and implement the programs to meet the overall corporate objectives.
THe coRpoRaTe sTRaTegic pLan
The aim of the corporate plan is to provide managers at every level of the organization with a framework which captures the current state of the market(s) within which they operate.
Business cycLes
In helping to build your corporate and business strategy going forward you need to understand the bigger economic picture. Knowing where you and your customers are in the business cycle is important. One of the features of a market economy is that if you plot the growth of output over a long period of time, what emerges is a graph that is marked by periods of relatively rapid growth followed by a period of decline of output. While these peaks and valleys can persist for years, the average of these values would be positive. A business cycle is the time between peak-to-peak or valley-to-valley. Some key indicators of the state of the economy include increases in productivity, consumer confidence, gross domestic product (GDP) and employment levels. Assuming your company’s fortunes are closely tied to the state of the economy, the more positive news relative to the past suggests the market would be receptive to growth strategies. If the news was pessimistic, a cautious approach is appropriate.
Beyond the bigger macroeconomic picture it is very helpful to understand the industry you are competing in and its dynamics. One of the most popular models of understanding your firm’s industry is the Five Forces Model devised by Harvard Business Professor