cpsp chapter 4 defining the business

Defining the Business (B.2.1.)

Creating and Presenting Strategic Plans

What are these products?

• Camera?

• Mobile telephone?

•Computer?

• Shampoo?

• Beer?

•Soft drink

Need to break broad groups into units

Strategic Business Units

Industry Labels too Broad

What units?

•Pinpoint strategic effort

•Performance measures

•Basis for resource allocation

Strategic Business Units

Number available on-line October 2014: 954

Cheapest: Boots Essential Anti-Dandruff Shampoo: £0.62 per 100ml.

Dearest: La Science Anti-Hair Loss Serum: £29.99 per 100 ml.

Dearest = Cheapest x 48.3Why?

They are in different product-market segments

Shampoos are defined differently

Defining the Shampoo Business

Commod

ities a

nd Bran

ds

Markets

Prod

uct

s

Mothers Young Women Children Babies Men Sports

Family x x x x xMild/Baby x x xDandruff x x x xDry scalp x x x x

Ethnic x x xBeauty x xBounce x xShine x x x

Colouring x xVolumising xShampoo & Conditioner x x

Frequent use x

Defining the Shampoo Business

Markets

Prod

uct

sDefining the Shampoo Business

Mothers, Children &

Babies

Young Women Men Sports

Family, Mild/Baby, x x x x

Dandruff, Dry Scalp, Volumising x x x

Ethnic x x x

Beauty, Bounce, Shine, Colouring x x

Shampoo & Conditioner, Frequent use x x

Segment marketsSegment products

Cluster back

Manageable product-market segments

Repeat

Maximum of 7 products

Defining Business Units Stage 1

Stage 2: The generic characteristics of the units1. Well defined contiguous set of products or services

2. Relatively homogeneous group of customers

3. Distinct set of competitors

4. Pinpoint strategic marketing effort

5. Allocate resources and measure performance

Defining the Business: Stage 2

1. Different marketing skills?: Separate

3. Different stages in the life cycle?: Separate

4. Different competitive positions?: Separate

2. Different basic technologies?: Separate

5. Different distribution channels?: Separate

Guidelines to combine or separate

MBA Student Definition of Qantas Business

MBA Student Definition of Ryanair

M1 M2 M3 M4 M5 M6 NM1 SalesP1P2P3P4P5P6

NP1NP2

Sales

Markets/Customers

Prod

ucts

A product-market matrix for 201X and 201Z

Develop Your Product Market Matrix

NP1 = New Product 1, NM1 = New Market 1

The End