The Concept Of Strategic Planning

Published Date: 02 Nov 2017

The concept of strategic planning has been widely researched by various academic researchers and authors, for instance Grant (2003) research on the role of strategic planning in strategic decision making; Veliyath and Shortell (1993) research on the effects of strategic planning on performance and Porter (1996) on various aspect of strategic planning. Strategic planning, defined as a formal, administrative process that calls for an explicit procedure to determine specific, long-range objectives and generate alternative strategies, requires both strict implementation and a system to monitor results (Armstrong, 1982).The concept of strategic planning emerged during the 1950s after Henri Fayol contended there was a lack of adequate planning in organizations ( Williams, 2008).Fayol suggested that the functions of management included planning, organizing, commanding, coordinating and controlling (Bagad, 2009).This early contribution to the management theory established the development and use of strategic planning.

Although there is a vast literature presented on strategic planning, many researchers have come up with different view and most of the views are inconsistent. Some of the criticisms raised address the theoretical foundation and impossibility of forecasting of strategic planning (Mintzberg, 1994.p.110), while empirical evidence—both longitudinal case studies (e.g., Mintzberg and Waters, 1982; Pascale, 1984) and investigations of strategic decision making (e.g., Bower, 1970; Burgelman, 1983)—points to strategies emerging from the weakly coordinated decisions of multiple organizational member (Grant 2003).

‘In the vast majority of companies, strategic planning is a calendar –driven ritual and assumes that the future will be more or less like the present’ (Hamel, 1996:70), but due to increased volatility of the business environment , rapid changes requires strategies that are flexible and creative (Grant, 2003) which will enable the firm to succeed in such unpredictable environment. Today, the need for strategic planning is necessary in order for companies to cope with a competitive environment, complicated analysis as quick translation of plans into action.

The literature from various researchers has shown various strategic planning dimensions. According to Ramanujam and Venkatraman (1987), strategic planning consists of six dimensions, (1) scanning of external factors, (2) attention to internal factors, (3) resources, (4) technology innovation, (5) organization capability and (6) resistance to planning. While Veliyath and Shortell (1993) proposed five dimensions: implementation of plan, good market research, key personnel contribution, staff involvement, and strategies innovation. Veliyath and Shortell dimensions on strategic planning represent a strategically plan which is important in organizational decision making process because, it establishes the means and ends of an organization, explain competitive threats and opportunities, and controls and implements actions, which in turn enhance firm performance (Ackoff, 1970; Ansoff, 1991; Menon, Bharadwaj, Adidam, and Edison, 1999). This research project has adopted Pahl and Richter (2009) Strategic planning process dimension which consists of six steps.

THE STRATEGIC PLANNING PROCESS

MISSION

OBJECTIVES

SITUATION ANALYSIS

STRATEGY FORMULATION

STRATEGY IMPLEMENTATION

CONTROLLING

Figure 2.1: The Strategic Planning Process; (source: Adapted from Pahl and Richter, 2009

Although there are several definitions of strategic planning, there is no commonly accepted and universal definition of it (Quinn, 1980; Brews and Purohit, 2007); the research project uses Bryson (2011) definition. Bryson (2011, p.xii) defines strategic planning as "a deliberative, disciplined approach to producing important decisions and actions that guide and direct an organization on its day to day management in fulfilment of organization goals and objectives". Strategic planning today in firms reflects the idea that there are important benefits to achieve through an explicit process of formulating strategy, to insure that at least the policies of functional departments are coordinated and directed at some common set of goals (Porters, 1980).This begin with having a clear setting of goals and objectives which provide an organization with its current and future decisions. It identify strength and weakness of the organization, opportunity and threats surrounding the organisation, which when integrated with other factor, an organization will be able to make good decision and be capable to take advantage over its competitor and to avoid threats ensuring that the appropriate resources are available at a suitable place and time in order to achieve the desired goals. Strategic planning can aid organizations in fulfilling their plans and ensuring that implementation is effective, keeping in mind the unforeseen opportunities as well. But too much reliance on strategic planning and reverence for strategic plans can prevent the organizations to see other unplanned and unexpected sources of information, insight, and action (Bryson, 2011)

Bryson (2011, p.xii) argue that, strategic planning can help organization in: (1) producing constructive decisions among the top management about defensible, desirable, feasible, and acceptable objectives, strategies, goals, missions and actions, combined with corresponding initiatives, such as changed, terminated policies or new projects, plan and programs, or even overall organizational designs; (2) gathering, evaluating, and synthesizing information to consider its strategic plan and structure possible choices; (3) creating significant and long-term public value; (4) attending to key organizational problems now and in the foreseeable future; and (5) enhancing constant organizational training and learning.

While organizations encounter long periods of relative stability when change is incremental (Bryson, 2011), they also normally come across periods of dramatic and quick change. For example in the late nineteenth century, in United kingdom, America, Denmark, Australia and Germany, the scale of brewing changed quite quickly ( Wilson and Gourvish, 1998) and this forced the brewery industry to change their strategic plan in order to survive. Due to this numerous and difficult challenges organizations may need to shift their focus and strategies to be able to survive, prosper and respond to the challenges.

Researchers have studied strategic planning processes to determine what should make an effective strategic plan to optimize organization performance (Lussier at el, 2001) and have come with various variables. These variables are the work of various researcher and includes, corporate versus independent new venture (Shrader and Simon, 1997); competitive plan (Beard and Dess 1981; Carter 1990), industries structures and types (Hatten, Schendel, and Cooper 1978), competitive strategy used by different organization (Chaganti, Chaganti, and Machajan 1989) and the environment( Bourgeois 1980). Most organization in Africa faces huge barrier to enter national and global market and yet access to these market is considered critical to growth in developing countries (OCED, 2006; World Bank, 2008), while organization from developed countries have facilities in terms of resources and capabilities due to their long-term strategic plans. Global brewing giants (Diageo, SAB Miller) are increasingly setting their eye on East Africa as the prime direction for new investment as returns in Western markets decline (All Africa media group, 2012) and as a result East African brewery should ensure their strategic planning process considers external and internal factors, evaluates what and where they are currently and where they hope to be or what they hope to become, consider alternate futures, various strategic intents and goals, recognize resource limitations, uncertainty and therefore formulate contingencies and to prioritize options to be able to yield the most optimal results and outcomes which are consistent with and supportive of the organization’s mission and vision (Simerson,2011).

The empirical studies have found that lack of strategic planning may contribute significantly to the firm’s failure to succeed (Christopher, 1998; Kristiansen, 2004; McQuaig 2006; Monck et al., 1988). The literature on strategic decision making suggested that many executives make poor choices due to their lack of planning experience (Byers and Slack, 2001; Chrisman et al., 1987; Jones, 1982; Smeltzer et al; Walsh, 2005). Thus, the type of planning sophistication and level of management involvement play into the appropriateness of decision making (Williams, 2008).

Rigby (1999) indentifies strategic planning as the most popular and widely utilized of any management tool, and the American Productivity and Quality Center (1996a, 1996b) report suggest that strategic planning system is the leading management tool used by U.S Corporation. In African, especially the East Africa the research done on strategic planning as a management tool is limited and no empirical evidence on how strategic planning systems have been adapted to increasingly unstable, unpredictable business environment in brewery. Overall, evidence from both cross-sectional studies and longitudinal studies, indicate less to a ‘decline of strategic planning’ (Mintzberg, 1994a), than to fundamental changes in the ways in which companies undertake their strategic planning (Grant, 2003)

2.2 Marketing Effectiveness

The concept of marketing effectiveness has been extensively discussed in great deal (Norburn et al., 1990; Ambler et al., 2001; Mavondo, 2004; Nwokah, Ahiauzu, 2008; Nwokah, Ahiauzu, 2009; Gao, 2010; Halim, 2010; Solcansky, Simberova, 2010; Žostautienė, Vaičiulėnaitė, 2010), because of its strong association with many valuable organizational outcomes such as long-term growth, enhanced customer satisfaction, a competitive advantage and a strong marketing orientation (Webster, 1995, p.6). Marketing effectiveness also known as the Return on Marketing Investment Muchiri, Pintelon, 2006; Navickas, Sujeta 2006; Salehirad, Sowlati 2006) provides a systematic approach that marketers can use to understand their marketplaces, the consequences of their own activities, and the activities of their competitors, in order to determine the relative effectiveness of different marketing investment (Powell 2012).

In today’s world where they is increased advances in technology, innovation and marketing techniques, marketing effectiveness can play an important role in improving firms profitability. Powell (2012, p. 4) argue that, with detailed knowledge of how consumers will respond to competitive channel, exogenous, and other consumer action, firm can minimize risk and achieve high level of marketing performance leading to greater returns.

Today, the beer markets of majority of the countries are characterized by rigid competition and presence of the large number of manufactures and sellers (Goncharuk, 2009). In such conditions the firms need to identify its market, recognizing the opportunities and the strength in order to meet its target customers’ needs and wants. Improved marketing effectiveness is not just a tactical advantage: it is also a strategic advantage (Powell 2012), as it can increase awareness of competitor in the market enabling the firm to design and execute right strategy in order to gain a competitive advantage. Also, by analysing the consumer behaviour, exogenous factors and competitive advantages and responding to these factors firm can identify low-cost and low-risk factors which can lead to significant returns to the investors.

There are four basic dimensions of marketing effectiveness (Nwokah, 2006, Nwokah and Ahiauzu, 2008).These are:

Corporate. This is important in identifying what business the firm is in and where it wants to be in the future. These will be determined by the firm’s own objectives, capabilities and resources. According to Leontiades, (1987) top management will need to appraise and assess their actual and potential customers, competitors, suppliers, legal and political constraint in order to gain an edge in the market.

Competitive. In a perfect world, marketers would equip themselves with relevant information on how to respond to competition as well as how their rival would respond, but to gain an edge in the market, industries will be reluctant to give information on their competitive strategy. Especially in many of the developing countries, where competition and strategic options are closely constrained within the national boundaries (Leontiades, 1987).

Customers. Understanding and taking advantage of how consumers decide on what to purchase can help marketers develop good marketing effectiveness. For example, new consumer segments emerge and according to these segments they preferences and choices will be based on how they value the quality of a product and the brand, in return for price paid for the brand.

Exogenous factors. These are factors which are external to organizations, and outside of the organization control and can impact the effectiveness of company marketing activities, such as Governmental and cultural factors, consumer tastes, demographics factors, weather and many others.

Alcohol marketing in recent years has greatly increased in complexity, innovation and diversification over a range of media, new technologies and new regional, micro, and pub-brewed beers flooding the market in both draft and bottle forms and as wine drinkers, beer drinkers are becoming increasingly sophisticated( McKinney, 2003). Evidence suggests there is a shift underway towards a global oligopoly in the beer industry as a result of a continuing worldwide consolidation, which has resulted in the diffusion of sophisticated marketing techniques from developed markets into developing countries as the major breweries compete for sales (Wenner, 2009, p.80).

In the early 1990’s, brewery industries competition stiffened (Christopher and Peck, 2012) as popularity of imported bottled beers increased in the market, consumers taste change preferring to buy lite beer because of health issues and consumers prefering to buy beer for home consumption. This new move in the market and the growing complexity of product and place portfolio meant that brewery industries had to lower the prices of their products and to improve marketing effectiveness in order to respond to the changing environment. As the concept of marketing effectiveness is rarely used in developing countries due to lack of marketing effectiveness expertise and knowledge (Kaynak and Hudanah, 1987), the impact will result to increased competition from developed countries. Norburn et al, (1990) suggested, companies that are close to consumers have a common set of values and demonstrates an external market orientation which is perceived to have a high degree of marketing effectiveness.

As marketing effectiveness works hand in hand with company strategic planning process, this means that brewer were forced to re-examine the way it managed and organised its marketing activities within the organization in order to improve the performance of the company. According to Peter Drucker (2012), companies should have a set of marketing strategies that will provide and ensure that consumer’s needs are satisfied and enhance a good customer relationship by developing products that provide superior customer in term of price, value, brand and convenience. Organizations need to re-examine their marketing strategy on an ongoing basis to be able to sustain a competitive edge in this era of constant change and to create a deeper consumer involvement and a sense of community surrounding a brand thus making the brand a meaningful part of consumers’ conversations and lives (Kotler and Armstrong, 2009).

Nwokah and Ahiauzu, (2009) proposed five factors driving the level of marketing effectiveness which can help the company’s design programs that can help to win the consumers:

Marketing strategy. This can be achieved by placing the product or brand correctly in the market, thus becoming more successful than competitors’ products/ brands. Even with the best strategy, company must execute their plans properly to achieve unprecedented results.

Marketing creative. By having a good creative than competitor can increase company profitability. With development and innovation of new creative concept can result to dramatic increase growth rate.

Marketing execution. By implementing good marketing execution strategy, organization can improve its effectiveness leading to increased revenue. Creative execution marketers can also help to improve the marketing mix strategy of the organization by making small changes in any or all of the 4Ps (product, price, place and promotion) without making changes to the strategic position of the company (Leontiades, 1987).

Marketing infrastructure. Good marketing infrastructure can contribute to significant achievement to the company, such as proper budgeting, employee’s motivation, and coordination of marketing activities in all departments can lead to improved competitiveness and greater results.

Exogenous factors. These factors can impact the company marketing effectiveness such as natural calamity such as weather and cultural factors which are unpredictable.

2.3 Strategic Planning and Marketing effectiveness Models

There are several models, frameworks, concepts, and academic theories which have been carried out by various researchers in different field with the objective of developing effective strategic planning and marketing effectiveness models which could be utilized to create a more forward-thinking, proactive orientation in the industry sector (Ramanujam et al., 1986). All this models and theories have a goal of increasing awareness about the business environment, strategic issues, opportunities and threats which help reduce the risk involved in making certain decisions, establishing priorities in large complex companies and providing a framework for evaluating the relative importance of different business portfolios, and aiding the presentation of complex issues (Aldehayyat and Anchor, 2008).

The literature review of these models, framework or concepts will review company strategic planning process where the firm managers need to have a clear perspective on market trends, competitive moves, the resources and the competences (Lauren 2011) in order to identify the best plan and actions to implement in the company and the marketing effectiveness strategy which will be most useful in helping the company to increase its market share growth and returns. The research project emphasises and looks at the most relevant models, frameworks and concepts that relates to strategic planning and marketing effectiveness used by EABL.

2.3.1 Competitive Advantage

Today, competitive advantage is at the heart of all firms’ performance (Porter, 1998), as the world face slow economy growth in both domestic and global market. The literature on competitive advantage from various researchers emphasises that, competitive advantage is simply a superior performance of an enterprise relative to its competitors (Thompson, 2001, Johnson and Scholes, 2001, Porter, 1998, Ohmae, 1982).

Competitive advantage provides the architecture for describing and assessing strategy, linking it to company behavior, and understanding the sources of competitive advantage (Porter, 1985). Although some company do well than others in the same industry, Lauren (2011:84) argues that, one of the most important aspects of competitive strategy is to find sources of competitive advantage. These are (1) the "core competence" of the organization (2) the Brand (3) customer relationships (4) distribution and (5) critical success factors; Benson-Armer et al. (1999) argued that, as economies of scale become less important, intangible sources of competitive advantage such as brands and market knowledge will be further developed and specialization will become essential. In addition to Hill and Jones (2012), they suggest that the generic building blocks of competitive advantage that any company can adopt are efficiency, quality, innovation and customer responsiveness.

Resources Build

Differentiation

Superior

Profitability

Functional strategies

Superior:

-Efficiency

-Quality

-Innovation

-Customer responsiveness

Value creation

Distinctive competencies

Shape

Low cost

Capabilities

Build

Fig 2.2: The Roots of competitive Advantage. (Source: adapted from Hill and Jones, 2009).

From the above figure, superior profitability depends on (1) the costs of creating those products (2) the company target price on the product and (3) the value customers place on the company’s brands/products,

Haddock (1999) pointed out brewing profits have been falling worldwide as competition increases. This has created stiff competition for both domestic and local industries as they are facing big challenges from the global giant industries that are fiercely penetrating developing countries, through ferocious global concentration and strategies conductive to growth, and these global giant firms have gained tremendous competitive advantage (Nolan, 2001). These big giant firms are aiming for market share in countries such as Asia, China, Latin America and Africa due to the increasing population and large potential. The four companies that dominate the global beer industry are Anheuser-Busch, Heineken, South African Breweries, and Miller Brewing Company. Each of the companies enjoyed a home market profit center for decades; Anheuser-Busch and Miller in the United States, Heineken in Europe, and SAB in South Africa and to grow their respective businesses, each company sought to expand their operations internationally to capitalize on new opportunities (Lewis, 2001).

The challenge of competitive strategy is not just setting direction or dealing with ad hoc competitive threats, but to implement a competitive stance throughout the organization so that it becomes an effective guide to day-to-day management decisions. Montgomery (1991) suggested that, competition in an industry should be embedded in its core economics, and beyond the established competitor in a particular industry in order to understand and anticipate market trends faster than the competitors. In addition, Porter (1980) view is that, each organisation is formed by a set of competitive forces that determine its nature and profitability in controlled and expected ways.

Competition within brewery industries is natural and inevitable (Lowy and Hood, 2011), brewery industries should concentrate on creating value for buyers by looking the ways to improve the market attractiveness. This involve careful consideration of competitive forces such as entry barriers, buyer power, supplier power, threats of substitutes and threat of competitors in order to understand the industry environment (Lowy and Hood, 2011 ).

To make the correct decisions, management need an objective way to evaluate their own and their competitors’ experiences and then relate this evaluation to the future they envision as likely (Hatten et al, 1978). By understanding the past events and forecasting the impact of future events, management will be able to arrange their resources in such a way the firm will exploit the opportunities and avoid the threats from the environment.

Porter (1985) argued that competitive advantage depends how the organization select its generic strategy in order to match with its objectives in the context of the competitive environment (Hatten et al, 1978). Porter proposed three generic strategies which can give a firm an edge in the market and outperform its competitors in a given industry (Dess and Davies, 1984). These generic strategies for achieving competitive advantage are cost leadership, differentiation, and focus. He (Porter) also argued that to acquire sustainable competitive advantage a business must select one of the generic strategies because, if the firm attempt to be cost leader and to differentiate simultaneously the firm will be ‘stuck in the middle’. This Porter generic strategy framework and the idea of being ‘stuck in the middle’ has been criticized (Dess and Davies, 1984).), but it is still a very widely used model of competitive behaviour (Stonehouse et al., 2007).

Competitive Advantage

Low cost Differentiation

Low cost leadership

Differentiation

Cost focus

Differentiation focus

Broad

Strategic scope

Narrow

Figure 2.3.The generic strategic framework (source: Adapted from Porter 1985)

Low cost leadership

A low cost leader focuses on reducing costs to such an extent that competitors cannot match them and the overall cost leader has the luxury of gaining more market share by using their cost advantage to lower prices ( Thomson and Baden-Fuller , 2010). The competitive advantage of this strategy depends on how the firm provide quality product at low price or slightly lower than competitors so as to increase sales through effectiveness, efficiency and economies of scales. This strategy is mostly used for entering a new market and where the price elasticity of demand for the product is high (Stonehouse et al., 2007)

Differentiation

A differentiator strategy creates a product or service that is recognized as unique and this uniqueness gives the organization an advantage to charge a higher price than its competitors (Porter, 1980).The idea of differentiation is linked with growth in brands in business, where the customers purchase the goods and services not only based on price but perceived quality (Thomson and Baden-Fuller, 2010). The firm must convince the consumers there is unique quality on the product/service offered which bring the price higher than the competitors.

Focus

Focus strategy is based on identification of a market segment with distinct characteristics and selecting a strategy that matches those characteristics (Stonehouse et al., 2007). The firm can either target a single segment or a number of segments based on age, income or lifestyle. This strategy is also termed a niche strategy (Miller, 1986). Doise (2008) argued that, focus strategy takes a differentiation or low cost strategy but only focused to a specific segment which leads to a proposition that an organization would have the capabilities that fit either a differentiation or low cost strategy in the various industries and not both (Lynch, Keller and Ozment 2000).

2.3.2 Ansoff’s Growth Matrix

Ansoff (1957) developed a framework to generate alternative strategic directions for an organisation, through considering its product-market option for supporting corporate growth objectives (Richardson and Evans, 2007) .Ansoff’s matrix is used as analytical tool by managers in order to identify the right market growth strategic alternatives to take. This has led to incorporating the Ansoff matrix into the strategic planning by computing the gap between the business unit’s objectives and what should be achieved by the continuation of the existing business (Ward, 2011). The matrix identifies four strategies for business growth. Existing company’s can grow by (1) market penetration- trying to get more mileage from their present product and target markets, (2) market development- taking present products and finding additional target markets, (3) market product development-developing additional products for present target markets, or (4) diversification- developing additional products and entering additional markets( Harper, 1992).

Existing markets

Existing products

Market Penetration

With market penetration strategy, a company will try to increase its shares market with its present products. This require a firm to have effective communication in order to seek new customer, persuade existing customer to continue using the product and having a competitive price. This strategy requires lowest time investment, expertise and capital (Richardson and Evans, 2007).

New Products

Product Development

Product development involves more expenses and a high risk, as the firm develop new products, enhances the existing products, adds new range of products to sell to the present target market. This strategy encourages the firm to experiment, thus bring new segments into the firm who may have different perceptions of what the future and where the firm should go (Harper, 1992).

New Markets

Market Development

Market development requires a firm to identify new markets for its existing products, tactically, finding new outlets to promote the product in order to attract new market. This strategy forces the managers to have a wider view, broaden their perceptual field and modify the firm’s marketing mix strategy (Harper, 1992).

Diversification

Diversification involves dealing with a different set of customers by expanding into different markets as well as developing different products to meet different needs, broadening its reach on two fronts (Harper,1992)

This is the riskiest of the four strategic approaches, especially, as Jobber (2006) notes, if it is not built upon existing core competences of the business

.

Ansoff’s growth matrix is a useful tool accepted by marketing writers such as Kotler et al. (2003), Morrison (2001), Bowie and Buttle (2004), Palmer (2001), they all agree that most growth that occurs practically is a combination of both product development and market development. However, the literature has shown that some writer have also criticise this model. For example; Hassanien and Dale, (2012) have criticise this model that it ignores the overlapping and inter-relationship between some of its strategies, for example, a new product may be developed both to keep existing markets and attract new ones, and (Bachmeir, 2009, p. 3) argued that Ansoff’s matrix is one-sided orientated on the growth and use only two factors, the product and market. It does not take into account indexes determining the efficiency of the company’s functioning such as liquidity, financial stability or profitability (Hassanien and Dale, (2012).

2.3.3 SWOT Analysis

Stacey (1993, p.53) describes SWOT analysis as, "a list of an organization's strengths and weaknesses as indicated by an investigation of its resources and capabilities, plus a list of the threats and opportunities that an analysis of its environment identifies". Strategic logic normally requires that the future decision of actions to be taken should correspond and match strengths with opportunities, fight off threats, and look for ways to prevail over weaknesses. The term SWOT is an acronym for Strengths, Weakness, Opportunities and Threats (figure 2.4). It was developed as a result of the more dynamic economy of the 1960s, where the future was no longer stable but rather changing and (still) growing (Singh, 2008). The SWOT analysis is both a technique and a tool, praised for its simplicity and practicality and widely used to help the strategic planning team explore and identify forces and factors likely to impact organization’s short and long term success, and in recording the results of its review and analysis (Simerson, 2011).

Mission

An organisation’s fundamental purpose

SWOT Analysis

To formulate strategies that supports the mission

Internal Analysis External Analysis

Strength

Opportunities

(distinctive

competencies)

weaknesses Threats

Figure 2.3 .SWOT Analysis. (Source: adapted from Griffin, 2008. P.203)

Good strategies

Those that support the mission and;

-exploit opportunities and strengths

-neutralize threats

-avoid weaknesses

As a framework, SWOT analysis is useful in identifying the factors which are most likely to influence a firm’s strategy and success (Pickton and Wright, 1998). Just as businesses pursue success, business environmental scanning is important for firm survival, as this will give the firm a view of market and competitive position. SWOT analysis involves a wide collection of information, both internal and external which have, or may have, an impact on business (Pickton and Wright, 1998).

Various analysts, consultants, business schools and researcher have recommended SWOT analysis as a precursor to strategy formulation, managerial decision making and action (Kotler (1991), Palmer and Hartley (1996), Wilson et al. (1992), Johnson and Scholes (1993), McDonald (1992), Fifield (1992). Other authors such as (Porter, 1985; Tilles, 1968; Ansoff and McDonnell, 1990; Johnson and Scholes, 1993; Davidson, 1987; Mercer, 1992; Argenti, 1989; Brassington and Pettitt, 1997) stress that, when SWOT analysis is used in a firm, it should also identify the firm‘s competitors so that strengths and weaknesses are only such in comparison to the competition and opportunities and threats only arise out of the collective actions or inaction within the marketplace of the firm and its competitors in their response to changing environmental forces. They are, thus, relative and not absolute and the firm's task is to seek competitive advantage (Pickton and Wright, 1998).

While SWOT analysis is praised and recommended by many authors to use it mostly in the early stages of business planning, (e.g. Carson et al., 1995; Piercy, 1991; Fifield, 1992; McDonald, 1992), it tends to limit the usefulness as it does not explain how the strengths and opportunities can be exploited or how the weaknesses and threats can be managed. O'Shaughnessy (1988) and Greenley (1986) describe SWOT analysis simply as a list, others such as (Carson et al., 1995; Baker, 1992; Brassington and Pettitt, 1997; Kenny and Dyson, 1989 and Brown and McDonald, 1994), gives a brief outline of SWOT framework and its problems and limitations.

2.4 Summary of Literature

This literature review represents an assessment of existing work that has been conducted on strategic planning and marketing effectiveness in wider view. The keywords were examined and discussed to reflect the previous work done and research gap on strategic planning and marketing effectiveness, keeping in mind the research objectives of the research project. Different materials have been used to explore and develop a meaningful work of the research report, representing both sides of the argument against the strategic planning, marketing effectiveness and the frameworks. The literature review reveals a broader empirical research on effectiveness of strategic planning and marketing models which often focused on established markets and the competitive dynamics markets, and less empirical studies have been done in emerging markets especially in East Africa region. Indeed, scholars have encouraged research on competitive moves in emerging high-velocity markets in which the need to build dynamic competitive advantage is particularly relevant (Chen et al. 2010; Smith, Ferrier, and Grimm 2001; Wirtz, Mathieu, and Schilke (2007).

The literature review on strategic planning and marketing has highlighted some problems or limitations with strategic analysis such as Ansoff matrix and Boston matrix. MacDonald (1990) cited in Gilligan and Wilson (2012) argued that, the gap between the theory and practise is bigger in the case of marketing than in any other fields as little evidence shows that these analytical tools are used in practice, (Reid and Hinckley (1989, p.9,); McColl-Kennedy et al. (1990, p.28), in their various research studies in UK, Australia and Hong Kong. Overall, evidence from both cross-sectional studies and longitudinal studies, indicate less to a ‘decline of strategic planning’ (Mintzberg, 1994a), than to fundamental changes in the ways in which companies undertake their strategic planning (Grant, 2003), especially in the developing country where the research done on strategic planning as a management tool is limited and no empirical evidence on how strategic planning systems have been adapted to increasingly unstable, unpredictable business environment in the industries (Grant, 2003).