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Strategic relationships and networks: Building the infrastructure to deliver the strategy Lecture 8.

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Presentation on theme: "Strategic relationships and networks: Building the infrastructure to deliver the strategy Lecture 8."— Presentation transcript:

1 Strategic relationships and networks: Building the infrastructure to deliver the strategy Lecture 8

2 A route-map for market-led strategic change Value-based marketing strategy New marketing meets old marketing Strategic thinking and thinking strategically Customer value strategy and positioning The strategic pathway Strategic market choices and targets Market sensing and learning strategy Strategic relationships and networks Change strategy Strategic gaps Organization and processes for change Implementation process and internal marketing Part I Customer value imperatives Part II Developing a value-based marketing strategy Part III Processes for managing strategic transformation The Customer is always right-handed

3 The strategic pathway Market sensing and learning strategy Strategic market choices and targets Customer value strategy and positioning Strategic relationships and networks Strategic thinking and thinking strategically Strategic transformation and strategy implementation

4 Agenda Customer relationships Competitor and contingent relationships Collaborator relationships Co-worker relationships The network of key relationships

5 Strategic relationships and networks Strategic relationships and networks Customer relationships Competitor and contingent relationships Collaborator relationships Co-worker relationships

6 Customer relationships Do we know what we want the customer relationship to be? Do we have that relationship or can we get it? Can we deliver that relationship? Do we understand the link between the strength of the customer relationship and the attractiveness of that customers business?

7 The dancehall dilemma Customer relationship Customer attractiveness StrongWeak High Low Prime target customers - achieve synergy as we retain the best customers (we hope) Targets for conversion - are they attractive enough to be worth chasing? Sticky customers - they want us, we dont want them, so what do we do? Mutual antipathy - they dont want us, we dont want them, end of discussion

8 Competitor and contingent relationships Some fundamental issues: –every organization has competitors –every company says we know who our competitors are and frequently get it wrong –most think that competitors are in our industry – see back to the Competitive Box to dispel that myth

9 Competitor and contingent relationships Really understanding the competition –conventional analysis develops a competitor response profile –the psychology of competition may be just as significant – e.g., how ugly are the competitors around here?

10 Competitor analysis Competitors goals What are they trying to achieve in this market? Competitors strategy What is this companys current strategic position? Competitors strategic assumptions - How does management look at the market? Competitors capabilities - What are their strengths and weaknesses Competitors response profile Is this competitor satisfied with its current position? What are the likely moves they may make? Where is this competitor most vulnerable? What is this competitor sensitive about, what is most likely to provoke a competitive reaction? Adapted from: Michael E. Porter, Competitive Strategy, New York: Free Press, 1980.

11 How ugly are the competitors around here? Competitive reaction to our move? Competitive aggression YesNo High Low Fight to the death Show disdain Weak counter- attack Ignore us

12 Competitor and contingent relationships Where is the competition coming from in this market? –can we predict the strategic moves of our competitors and maintain our competitive advantage? –do we recognise new potential competitors and new technologies? –does our value proposition give us a specific positioning thatb plays to our strengths and avoids head-on competition?

13 Competitor and contingent relationships Critical contingents: –shapers of opinion –regulators –recommenders –gatekeepers –suppliers –supply chain partners

14 Collaborator relationships From outsourcing to alliances and networks –outsourcing –partnership –alliance –vertical integration

15 Types of collaborative relationship Short-term Long-termPermanent Joint venture Vertical integration Arms length Outsourcing Partnership Alliance Ownership Closeness of relationship Low High Nature of the relationship Purchase of goods and services from outside the company, possibly over the long term Short-term focus, but coordinated activities between partner companies Longer-term focus with integration of activities between partner companies Permanent arrangement with partner companies highly integrated Shared ownership in an operation with a collaborator company Full ownership of the activities or operations

16 Collaborator relationships Advantages in collaboration: –cost efficiency –customer service –marketing advantage –strategic advantage –profit stability and growth

17 Collaborator relationships Network organizations –a new organization form: the hollow or networked organization

18 The Calyx & Corolla hollow, networked organization Calyx & Corolla Customers Federal Express Flower growers 1. Customer orders from catalogue: phone, fax, mail, 2. C&C notifies order to Federal Express and the chosen flower grower by computer 3. Federal Express collects flowers 4. Federal Express delivers flowers

19 Collaborator relationships Collaborations that crash –synergy or ygrenys Managing partnerships and collaborations –corporate compatibility –management style and techniques –mutuality –symmetry

20 Collaborator relationships Partnership-based strategy should consider time and cost in: –establishing the partnership –monitoring the partnership –strengthening the partnership –getting out of the partnership

21 Co-worker relationships Can and will employees/managers in the company/alliance deliver the promise of the value proposition to the customer? –do not assume everyone will think our strategy is great and buy-in –be realistic about capabilities Link to internal marketing strategy

22 The network of key relationships Relationships with customers, competitors, contingents, collaborators and co-workers are connected Challenge is to test market choices and value propositions against the networks capabilities

23 British Airways relationship network Competitors and contingents Virgin antagonism continues; low cost operators attacking through courts; European regulator investigates; no help from government Collaborators USAir alliance crashed; American Air alliance stalled; travel agents are hostile; Customers Customer satisfaction levels falling; premium passengers switching brands; higher service image weakened Co-workers Climate surveys go down; new branding is resisted; industrial action takes place and more is threatened BA Strategy

24 The network of key relationships The danger is developing and pursuing attractive strategies that rely on relationship network capabilities which do not exist


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