Strategic planning, whereby managers establish organization’s long-term direction, set specific performance objectives and develop strategies to achieve them in the light of relevant internal and external circumstances, is now generally recognized and widely accepted.
The life-cycle concept has long been recognized as a valuable tool for analyzing the dynamic evolution of products (SBU’s) and industries in the market place. Therefore, in this research, a fairly structural methodology to guide strategic choices based on the life-cycle concept and the business portfolio matrix, suggested by Arthur Little, was used to formulate the strategies for certain products of a regional co-operative company in the city of Mashhad.
In using this matrix, selected products of the company were considered as independent SBU’s. Then the stages of individual products life-cycle were deliberately determined employing market share and qualitative categories as suggested by Little.
For this purpose, a sample of 97 home appliances retailers were randomly selected from a population of 931 using proportional sampling. Calculated market share along with subjective and qualitative categories were then used to assess the life, stage of individual products and to address their corresponding competitive position.
Following the positioning of portfolio of products in the life-cycle matrix, appropriate strategies for each product were identified using conceptual aids of families of thrusts (Prove Viability, Natural Development,), specific thrust (Turn around, Growth, Gain position gradually, Renew, Startup) and generic strategie as suggested in the model.