MKTG5001 Chap.5 Strategic Marketing, Planning & Portfolio
Strategic Marketing, Planning & Portfolio
Strategic Marketing, Planning & Portfolio defines strategy as a chosen target segment plus a resonant value proposition, and planning as maintaining a strategic fit between the firm's goals and capabilities and its changing opportunities, guided by the 3 C's — Customer, Competitor, Company.
Two portfolio tools dominate: the BCG Growth-Share Matrix (market growth × relative market share, giving Stars, Cash Cows, Question Marks and Dogs) and the Ansoff product-market expansion grid (penetration, market development, product development, diversification).
What this chapter covers
- 01
Strategy = chosen target segment + resonant value proposition
- 02
Strategic fit between goals/capabilities and changing opportunities
- 03
The 3 C's: Customer, Competitor, Company
- 04
BCG matrix axes: market growth rate × relative market share (own ÷ largest rival)
- 05
BCG cells: Stars, Cash Cows, Question Marks, Dogs, and the strategy for each
- 06
A healthy portfolio: Cash Cows funding Stars and tested Question Marks
- 07
Ansoff grid: market penetration, market development, product development, diversification
Classify two SBUs on the BCG matrix and recommend a strategy
- 3 marksRelative market share = own sales ÷ largest rival's sales. SBU A: 2.0 ÷ 0.8 = 2.5 (>1, so A is the market leader). SBU B: 0.6 ÷ 2.4 = 0.25 (<1, so B trails the leader).
- 1 markRead the growth axis against a roughly 10% split. SBU A's market grows 3% (low growth); SBU B's grows 18% (high growth).
- 2 marksClassify. SBU A: high relative share + low growth = Cash Cow. SBU B: low relative share + high growth = Question Mark.
- 1 markRecommend strategy. SBU A (Cash Cow): hold and harvest — milk its steady cash to fund growth elsewhere. SBU B (Question Mark): build selectively if it can reach scale and become a Star, otherwise divest before it drains resources.
Key terms
- Marketing strategy
- A chosen target segment combined with a value proposition that resonates with it — the 'who we serve and the value we promise' decision that the marketing mix then executes.
- Strategic fit
- The alignment, maintained through strategic planning, between an organisation's goals and capabilities and its changing market opportunities.
- The 3 C's
- Customer, Competitor and Company — the three lenses a marketing strategy must reconcile.
- Relative market share
- Own sales ÷ the largest rival's sales, the horizontal axis of the BCG matrix. A value above 1 means the unit is the market leader.
- BCG Growth-Share Matrix
- A 2×2 portfolio map of market growth rate against relative market share, sorting business units into Stars (invest), Cash Cows (harvest), Question Marks (test) and Dogs (divest).
- Ansoff grid
- A 2×2 product-market expansion tool: market penetration (existing product/market), market development (existing product/new market), product development (new product/existing market) and diversification (new/new).
Strategic Marketing, Planning & Portfolio FAQ
How do I calculate relative market share for the BCG matrix?
Divide your unit's sales by the largest competitor's sales (not by total market sales). A result above 1 means you are the market leader; below 1 means you trail. This goes on the horizontal axis, with market growth rate on the vertical axis.
What does a healthy BCG portfolio look like?
Cash Cows (low growth, high share) throw off cash that funds Stars (high growth, high share) and a few tested Question Marks (high growth, low share) that might become tomorrow's Stars. Too many Dogs (low/low) or only one Star is a warning sign.
Exam move
Practise computing relative market share and placing several SBUs on the BCG matrix from a sales table — this is one of the two flagship essay patterns. Memorise the standard action for each cell, and keep the Ansoff grid handy for any 'how should we grow?' prompt.
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