Stated in simple terms, strategy is a complete plan designed specifically for attaining the objectives of the firm. The objectives indicate what the firm wants to achieve; the strategy provides the design for achieving them. It is the strategy that decides the success at the business unit level, which in turn decides the total corporation’s success. The linkage between strategy and overall corporate success is indeed direct and vital. And in this linkage lies the significance of strategy.
Since realizing the objectives is the purpose of strategy, it is only logical that strategy takes its direction and cue from the objectives of the firm. Strategy is not a nebulous idea. It is a well-outlined game plan. And there are definite ways of formulating it. Basically, the formulation of a strategy consists of two steps: Selecting the target market and assembling the marketing mix.
The essence of the strategy of any firm can be grasped from the firm’s target market and its marketing mix. The target market shows to whom the firm intends to sell the products; the marketing mix shows how the firm intends to sell. Together, they constitute the strategy platform of the firm.
To say that target market selection is a part of strategy development is an understatement. It does not fully bring out the import of the inseparable linkage between the two. When the selection of the target market is over, an important part of the strategy of the firm is already determined, defined and expressed. In effect, target market selection boils down to deciding- what parts of the market are we going to serve? What parts of the market do we choose not to serve? And, what is the logic of selecting a particular segment? In other words, it is basically a question of balancing the attractiveness of the various segments with the objectives of the firm and with the resources of the firm.
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