GOAL FORMULATION :Once the company has performed a SWOT analysis, it can proceed to goal formulation, developing specific goals for the planning period.
Goals are objectives that are specific with respect to magnitude and time.
Most business units pursue a mix of objectives, including profitability.
Sales growth, market share improvement by objective (MBO) system to work.
The unit’s objectives must meet four criteria.
1. They must be arranged hierarchically, from most to least important.
The business unit’s key objective for the period may be to increase the rate of return on investment.
Managers can increase profit by increasing revenue and reducing expenses.
They can grow revenue, in turn, by increasing market share and prices.
2. Objectives should be quantitative whenever possible.
The objective to increase the return on investment (ROI) is better stated as the goal to crease ROI to 15 percent within two years.
3. Objectives must be realistic. It’s not possible to maximize sales and profits simultaneously.
Other important trade-offs include short-term profit versus long-term growth. deep penetration of existing markets versus development of new markets.
Profit goals versus nonprofit goals, and high growth versus low risk.
Each choice calls for a different marketing strategy.34
Many believe adopting the goal of strong market share growth may mean foregoing strong short-term profits.
Volkswagen has 15 times the annual of Porsche-but Porsche’s profit margins are seven times bigger than Volkswagen’s Other successful companies such as Google.
Microsoft, and Samsung have maximized profitability and growth.