corporate, business & marketing strategies
TRANSCRIPT
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STRATEGIC MARKETING & PLANNING
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For some a harrowing experience!
For others, like Siemensan opportunity to reinventthemselves.
HOW & WHAT DID SIEMENS ACHIEVE?
1. Clear goals for management,2. More transparent operation,3. Turn around ofsemiconductor
business,4. Mobile phone handset business back
on track, &5. Increase in share value.
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The right Corporate Strategy
The right Corporate Strategy tosurvive in a complex & more
demanding business environment.
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Corporate strategy consists ofdecidingon
...the scope and purpose of the
business,
setting clearobjectives,
taking initiatives &investing resources to achieve the
companys objectives.
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Corporate strategy is the way by
which a company creates valuethrough the configuration andcoordinationof its multi-tier
market activities.
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Having a strategy is a matter ofdiscipline. It requires a strong
focus on profitability rather thanjust growth, an ability to define aunique value proposition, and a
willingness to make tough trade-offs in choosing what not to do.Michael E. Porter
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DellComputers direct PC sales & built-to-
order process succeeded;
IBMs transition from being a manufacturerof computer hardware only, to a solutions
provider, to the provider of a smarter planetsucceeded.
Tapal created a new category in Tea and
succeeded.
WHAT DO THESE COMPANIES HAVE INCOMMON?
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1. Unique competitive position2. Activitiestailored to strategy...
3. Clear trade-offs & choices vis--
vis competition4. Competitive advantage backed by
relevant activities
5. Sustainability &
6. Operational effectiveness.
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Boeing counting on
point-to-point
Airbus A380: Pan-European plane;capacity: 555passengers.
Wingspan as tall as a9-storey building;
Weight 560 tons;
Cost: $250 million perplane.
Boeing NOTproducingSuperJumbo;
Boeingsassumption? USairlines want smallerplanes for directroutes hencemarket limited.
Airbus counting on
long-haul flights
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Corporate Strategy requires aFramework consisting of
1. Vision
2. Objectives
3. Capabilities
4. Business Composition
5. Structure, Systems &Processes.
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Why Vision? To answers the question - What is the
corporation about, what does it do?
To provide overall guideline &direction to the business;
Vision needs periodic review: Why?
1. Changes in the environment &2. Need to sustain competitive
advantage.
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Why objectives?
To measure performance e.g.market share growth, qualityimprovements, employee training &
development, earnings growth. At what levels are objectives set?
Several levels -but aligned with
corporate objectives. How does one keep track of
performance?
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What does a Balanced Scorecard do?1. Translate vision into operational
goals;
2. Communicate & link vision withindividual performance;
3. Help in business planning & index
setting;4. Provide feedback, learning for
adjusting strategy as needed.
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Why assets, skills, & capabilities?
1. To create potential for anorganization to compete in different
markets,
2. To provide value to customers, &
3. To create barriers againstcompetitive entry.
ANY EXAMPLE???
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Sonys distinctive capability inminiaturization of electronic products
resulted in the creation ofSonyWalkman, and later, Sony VAIO personalcomputers.
The Internet links computer users toSonys music & entertainment business.
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Why business composition?
Provides directionfor Corporate &
Marketing strategy design. Allows grouping of similar
businesses to form Strategic
Business Units (SBUs), & to facilitatedecision-making.
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SBU = Single product or brand, or a lineof products, or a mix of related products,that meet a similar market need, or a
group of related needs.
SBU = a cohesive organizational unitwith a dedicated team & a separate set of
objectives.
SBU strategies are specific to the SBU.
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Why structure, systems, &processes?
To control & coordinate theactivitiesof various business units &staff functions. Dell Computers offers superior valuethrough customization and promptservice.
easyJet,in Europe offers no-frillsservice in the airline, auto- rental & alliedareas.
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Creating Competitive Advantage butHOW?
Assessing how every business unitcontributes (positively) to thecorporation;
Evaluating them against otherbusinesses, for allocation of resources& investments for the future.
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Does selection ofa sound strategylead to business success?
Does the uncontrollable externalenvironment (demand, competition,
government policies) influencebusiness success?
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Business & Marketing strategies reflectoverall corporate strategy.
A key measure of success is the impact
they have on results.
Factors that influence the result:
1. Strategic choices a business or functionmakes;
2. Environmental factors.
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Role of the Marketing Director/ CMO:
1. Strategy formulation &
2. Ensuring consistency withbusiness priorities &
3. Ensuring integration with other
functional strategies.
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From a customer perspective,strategy must:
Have market attractiveness, Possess clearcustomer
orientation,
Communicate value advantage.
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Strategicsituation analysis
Market-DrivenProgramDevelopment
Implementing
and ManagingMarket-Driven
Strategy
DesigningMarket-Driven
Strategies
The Marketing Strategy Process
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Strategic Situation Analysis:1. Market vision, structure and
analysis:
Analyzing markets/ forecastingchanges;
Evaluating competitive strategies -strengths, limitations & plans;
Deciding when to enter new markets,how to serve existing markets, whento exit unattractive markets.
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Strategic situation analysis:
2. Segmenting/ creating marketsegments
Examine differences in customersneeds & wants, &
Identify buyers with similarcharacteristics. HOW?
Use information on peoples past
behavior, preferences, reasons forbuying
Q: What kind of people consume RedBull?
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Strategic situation analysis:
3. Continuous Learning about Markets:
Sensing what is happening or likely tohappen.
Adjusting to (or pre-empting)
changing customer preferences orcompetitive initiatives or threats.
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What is involved?
1. Market targeting & strategic
positioning;
2. Building marketing relationships; &
3. Developing & introducing new products.
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1. Market targeting and strategicpositioning
Influence of situational factors e.g.
industry type, nature of business &extent of product differentiation.
The challenge: Deciding how, when, &
where to compete.
Segment selection: Calculatingsegment potential & identifyingim ortance for firm.
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1. Market targeting and strategicpositioning
Deciding on positioning strategy
what is positioning strategy?Combination of the 4Ps - product,
price, promotion, value-chain
In relation to competition.Seeking the best match between valuerequirements of the target & theorganizations distinctive capabilities.
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Frozen food is a very competitivesupermarket/ retail category becauseretail space is limited. Brands by K&N
have invested in a chain of retailoutlets to gain competitive advantageand continue to capitalize on it.
1. Market targeting and strategic
positioning
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2. Marketing Relationship Strategies:
A collaborative effort betweencustomers, channel members, suppliers,& internal teams for the commongood.
General Mills and Nestle, competitorsin business, collaborated to form
Cereal Partners Worldwide (CPW)their compatible management styleled to success.
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IBM competes in software with Oracle, butpartners with them in businessconsulting
competes with Microsoft in software,but partners with the company in someregions to sell Intel severs.
Cisco Systems, longtime IBM partnersnow compete in areas that were seen asIBMs domain.
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3. Developing & introducing New
Products:Finding & evaluating ideas,
Selecting/ developing those most
promising,Designing marketing programs,
Market testing, and
Market introduction. Innovation plays a major role in new
product developmentthe 3M example
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Minnesota Mining and Manufacturing(3M) has a reputation for innovation.
What are their Core Strategies?
Keep business units small;
Encourage experimentation/ risk-taking;
Motivate & rewarding innovators;
Stay close to the customer;
Share technology with other firms; &
Avoid killing projects that staffsupports.
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1. Preparing the Marketing Plan &Budget;
2. Implementing the Plan;
3. Using plan to Manage & Control
Strategy.
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1. Preparing the Marketing Plan &
Budget; Plan outline:
A. Strategic Situation Summary
B. Market Target (Description)C. Objective for Market Target
(Sales, Profits, Position)
D. Marketing Program PositioningStrategy
E. Forecasts & Budgets.
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Marketing Program Positioning
Strategy:1. Product strategy
2. Distribution strategy
3. Price strategy
4. Promotion strategy
5. Marketing Research
6. Coordination with Other BusinessFunctions.
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1. Escalating globalization.
2. Technological diversity & uncertainty.3. The Internet Era: Web 2.0.
4. Increased focus on ethical business
behaviour & CSR.