Page 31 - DCAP307_PLANNING_AND_MANAGING_IT_INFRASTRUCTURE

Unit 2: Strategic Planning

Multiple market segmentation schemes are recommended. It is usually the responsibility of the Notes
marketing function of a company to develop a precise definition of the market segments.
Ultimately in the strategic planning process, these segments will be prioritised and targets will
be selected.
The second step in the segmentation process is assessing and assigning the market potential for
each segment and determining whether that potential is growing, levelling off, or declining.
The third step is to match or fit the products and services of the company to the various market
segments.

Example: Consumer food products such as single servings fit older aged market segments;
other food products fit a family with young children. This matching process provides a way of
identifying where the company is strong or weak and where the greatest market potential lies.

This process may also have implications for new product development or market growth of the
company.
From this last step in the process, management has a framework that allows analysis of:

Market Segments and Market Potential (without company bias)
Matching of Existing Products and Services to Segments

Implications of where the company needs to focus product or market development
Penetration or market share of various market segments
Implications for functional tasks such as the sales planning and advertising
Identification of products, services or market segments to be emphasised, diminished or
discontinued.
At the conclusion of this step management has a completed current situation analysis, and an
outside analysis of market segments and their potential. An important point is that the
segmentation scheme and the identification of market segments have come from the unique
behaviour of the market or customer. It is not an internally generated definition of market and
product potential. The company products and services are now objectively matched to the
market segments.

At the end of this phase, data collection and organisation of the market factors is complete.

Did u know? This analysis allows the company to evaluate and select the market segments
of highest potential for volume and profit contribution.

SWOT Analysis

SWOT (Strengths, Weaknesses, Opportunities and Threats) analysis is a valuable, proven, effective
tool to use in the discovery and evaluation stage of strategic planning. It is an audit of the
organisation and the environment around the company. The SWOT analysis is most productive
when it involves the input of a cross section of key managers in the process. Since SWOT analysis
is an exercise dependent on judgment, the input from multiple sources provides an opportunity
to assure all of the points of view and important issues are considered. Thinking of and using the
SWOT analysis as a team sport, in contrast to an individual sport, will add value while expanding
the horizon of the SWOT “thinking” exercise.

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