Strategic Planning
Part 4 of 7

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Manufacturing Today

Today, many of us are not much closer to a solution than we were decades ago. We sense we are missing something but we do not know what it is. As competition heats up, we become increasingly vulnerable. We need a solution and we need it now.

Strategic Planning: The Missing Link Introduction

Sound strategic planning is the missing link in the scenario above. It is the mechanism that ties corporate objectives, all functional strategies, especially those for manufactur­ing and marketing, and system and technology choices
together into a cohesive and efficient system capable of deploying company resources in a manner that will create a strong competitive posture... The steps for this process are not overly complex and will be illustrated in the next section.

Step 1: A Corporate Strategic Plan

A corporate strategic plan is the first step in this process. Many models for this process exist. Most models include the following steps:
• Development of a Mission Statement
• Creation of Corporate Objectives
• External Environmental Scanning
• Internal Strengths and Weaknesses Analysis
• Development of the Corporate Strategic Plan

Step 2: A Marketing Functional Strategy Marketing, the First Functional Strategy

Once the corporate strategic plan is complete, all company functional strategies are developed. The first should be the marketing strategy. Manufacturing resources cannot be accurately deployed until their exact goals and objectives are defined. That definition is the responsibility of the marketing strategy.

Market Segments or Niches

Uniform markets are largely a thing of the past. Most marketing analysis must be done within smaller units called market segments or niches where a common group of customers hold a common set of preferences.
Competitive Advantages

The bases by which a company competes are called com­petitive advantages or distinctive competences. They vary from one product to another and from one market segment to the next. Specific choices must be made because a product in a given market niche can, at best, compete on only 2 or 3 of the possible competitive advantages indicated below:

• Price
• Quality Conformance (To the Specs.)
• Quality Perception (Of the Specs.)
• Delivery Speed
• Delivery Reliability
• Volume Flexibility
• Mix Flexibility
• Product Technology (Product, Process, or Both)
• Product Features/Options
• Product Range
• Internal Service
• External Service
• Image

Marketing must determine by product by market segment how strong a competitive weapon each of the above com­petitive advantages will be.
Order Winners, Order Qualifiers, and Non-issues
During that market niche analysis, each competitive ad­vantage can be classified by its relative strength as follows:

• Order Winners: Those characteristics you have that make your customers prefer your product over those of your competitors.
• Order Qualifiers: Those characteristics you need to get into the game.
• Non-Issues: Those characteristics that do not enter into the competitive picture for that product in that market niche.

Each market segment must be analyzed to determine which competitive advantages are order winners, which are order qualifiers, and which are non-issues. The analy­sis should result in a determination of exactly how the company will compete by product in each market niche.

To be Continued