1. Corporate Strategy Decisions and Their Marketing Implications
Chapter Two
Corporate Strategy Decisions
and Their Marketing Implications

2. Chapter Two:
Corporate Strategy Decisions
and Their Marketing Implications
Learning Objectives:
Understand the corporate strategy components and issues:
- Scope and mission - Objectives
- Growth and competitive advantage - Growth strategies
Improve analytical skills, especially in forming objectives

3. Corporate Scope and Mission
Corporate Strategy Video
Corporate Scope:
In what business should the firm be?
In what business is Rhode Island College?
The railroads collapsed because they thought they were in the railroad business, when really they were in the transportation business.
Broad
Specific
Functional
Based on customer needs
Transportation business
Long-distance transportation for large-volume producers of low-value, low-density products
Physical
Based on existing products or technology
Railroad business
Long-haul, coal carrying railroad
Corporate Mission
examples
RIC SOM

4. Corporate Growth and Gaining a Competitive Advantage

5. Growth Strategies and Allocating Corporate Resources
Ansoff Strategies
BCG Portfolio Model
competitive position
Business’s
High
Low
Medium
Industry attractiveness 1 2 3
GE Nine-Cell Matrix
1 Invest/grow
2 Selective investment/ maintain position
3 Harvest/divest

6. Alternative Corporate Strategic Frameworks
Rock, Scissors, Paper
FSS Corporate Video

7. Factors Affecting the Creation of Shareholder Value
Is Santana Worth It?
Exhibit 2.9.
Creating
shareholder
value
Shareholder return
Dividends
Capital gains
Corporate
objective
Valuation
components
Cash flow
from
operations
Discount
rate
Debt
Value growth duration
Sales growth
Operating profit margin
Income tax rate
Working capital investment
Fixed capital investment
Cost of capital
Value
drivers
Management
decisions
Operating
Investment
Financing
Source: Reprinted with permission of The Free Press, A Division of Macmillan, Inc., from Crating Shareholder Value by Alfred Rappaport. Copyright © 1986 by Alfred Rappaport. 10