Industrial Marketing Strategies MBA-ProMa Industrial Marketing Staffan Brege, Professor

A. Dynamic Effectiveness

Porter: Five Forces Framework Competitive rivalry Suppliers Customers New entrants Substitutes

New Industrial Structures and Dynamic Effectiveness New industrial structures Dynamic effectiveness

Increased operative effectiveness New strategic positions Operative plattforms - effecient sales org. - effecient marketing channel - CRM-systems - global logistics - purchasing portals Strategic positions - markets/segments - market shares - product assortments - value chain position - competitive advantage Mats Abrahamsson & Staffan Brege, 2000 Dynamic Effectiveness = Strategic Positions + Operative Plattforms

Dynamic Effectiveness Operative Effectiveness Strategic Effectiveness Dynamic Effectiveness Strategic barrier Operational barrier Strategic barrier Static Effectiveness Optimisation focus Dynamic change focus Productivity focus Positioning focus K’lla: Mats Abrahamsson, Jan Carlsson & Hans Sarv, 1999

To Overcome Strategic and Operational Barriers Operative Effectiveness Strategic Effectiveness Dynamic Effectiveness Atlas Copco Expansion from an efficient logistical plattform Electrolux Tries to exploit operational synergies from acquisitions Ericsson Adapts logistical structures to new industry and new tehnology DELL Affärsmodell som bygger på - Direktförsäljning - Kundorderstyrd produktion - Skalfördelar - Stark positionering New companies Goes directly into the dynamic position Quick expansion based on efficient logistics - no old-fashioned infra-structure

Dynamic corner 1. Flexible production 2. New products in the same production system 3. Global logistics platform 4. Expansion to new markets 5. Administrative center 6. Internet strategy Operational platforms Strategic opportunities

B. The Business Model Concept

The Business Model Concept Market Positions The Offering Operational Platforms What does the customer want? What do we offer – value proposition? What are our resources? Market channel Partners Supply How are we selling/ marketing?

Three cornerstones for success Customer intimacy Innovation Operational excellence

C. Porter M: What is Strategy?

Definitions Activities, then, are the basic units of competitive advantage. Overall advantage or disadvantage results from all a company´s acitivities, not only a few. Operational effectiveness means performing similar activities better than rivals perform them. Operational effectiveness includes but is not limited to efficiency. In contrast strategic positioning means performing different activities from rivals or performing similar activities in different ways.

Productivity Frontier Relative cost position Nonprice byuer value delivered

Three Strategies Strategic positions – can be based on customers´needs, customers´accessibility, or a variety of a company´s products or services

D. Prahalad and Hamel: Core Competence

Definition Core competencies are the collective learning in the organization, especially how to coordinate diverse production skills and integrate multiple streams of technology Unlike physical assets, competencies do not deteriorate as they are applied and shared. They grow. Few companies are likely to build world leadership in more than five or six fundamental competencies.

The Tree Metaphor Core competences are the root system Core products are the trunk and the major limbs SBUs are the smaler branches Products are the flowers and the leaves

Core Competence vs SBU Organisation The tyranny of the SBU

Core competence Unique Used in many markets Value to customers Treshold capabilities and competences Unique resources and core competences

Central vs Decentral CorporateCountry Local Marketing X X Sales X X Service (X) X X Development X Production X Logistics X (X) IT-Systems X Education X X

E. Stalk et al: Competing on Capabilities

Four principles of capability-based competition The building blocks of corporate strategy are not products and markets but business processes Competitive success depends on transforming a company´s key processes into strategic capabilities that consistently provide superior value to the customer Companies crate these capabilities by making strategic investments in a support infrastructure that links together and transcends traditional SBU´s and functions. Because capabilities necessarily cross functions, the champion of a capabilities-based strategy is the CEO.