1 Copyright © 2011 Pearson Education, Inc., publishing as Prentice Hall Dr. Dawne Martin MKTG 550 – Business Marketing September 27, 2012

 For Next Time › Chapter 5 & 6 › Sign up for individual case › Read “To Succeed in the Long Run, Plan for the Middle Term” by Geoffery Moore  Project 1– Due October 11  Understand the value and role of strategy and planning  Understand the process of strategy development and planning  Understanding the role of the mission & vision statements Copyright © 2011 Pearson Education, Inc., publishing as Prentice Hall 2

 What are the critical issues in developing a strategy?  Why is it important to understand the environment in which the company is operating to develop a successful strategy? What is fit? Copyright © 2011 Pearson Education, Inc., publishing as Prentice Hall 3

Mission Goals Objectives Strategies Tactics Sales oriented efforts Marketing oriented efforts 4 Copyright © 2011 Pearson Education, Inc., publishing as Prentice Hall

Corporate Strategy Functional Area Strategies Product Strategies Business Unit Strategy Functional Area Strategies Product Strategies Functional Area Strategies Product Strategies 5 Copyright © 2011 Pearson Education, Inc., publishing as Prentice Hall

 Set Goals and Objectives  Understand Environment of Business Operations  Learn from Experience, Update Experience  Critical Thinking 6 Copyright © 2011 Pearson Education, Inc., publishing as Prentice Hall

1.Setting Goals and Objectives 2.Analysis of the current situation 3.SWOT Analysis: Strengths, Weaknesses, Opportunities and Threats 4.Strategy design and choice of the best strategy 5.Implementation plan design 6.Strategy implementation 7.Monitoring of environment and performance results 8.Analysis of variance from desired performance levels 9.Adjustments based on analysis of variance 7 Copyright © 2011 Pearson Education, Inc., publishing as Prentice Hall

 Seek to establish a fit between the business environment and the strategy Fit - Providing superior value through differentiated pieces of the total offering 8 Copyright © 2011 Pearson Education, Inc., publishing as Prentice Hall

 Drive change rather than adapting to it o Quality and process improvement are essential to superior value o Measuring and tracking results is necessary for continuous improvement 9 Copyright © 2011 Pearson Education, Inc., publishing as Prentice Hall

 Change in customers, channels and competitors cause discontinuities in the evolution of industries or markets  Companies seldom impact change in market  Keep up with changes in the rules of the market 10 Copyright © 2011 Pearson Education, Inc., publishing as Prentice Hall

 Includes infrastructure, personnel, finances etc.  Are not limitless  Strategic Planning Process is a resource allocation process 11 Copyright © 2011 Pearson Education, Inc., publishing as Prentice Hall

Market Growth Rate High Low Stars Cash Cows Question Marks Dogs Relative Market Share LowHigh 12 Copyright © 2011 Pearson Education, Inc., publishing as Prentice Hall

 High Growth, high Share  Needs heavy investment; builds market share  Manage with market ownership o Eventually become Cash Cows Stars Cash Cows Question Marks Dogs 13 Copyright © 2011 Pearson Education, Inc., publishing as Prentice Hall

 Low growth, high Share  Established, successful, invest enough to hold market  Cash generators  Harvest to increase short term cash Stars Cash Cows Question Marks Dogs 14 Copyright © 2011 Pearson Education, Inc., publishing as Prentice Hall

 Low share, high growth markets  Requires cash to hold share  What should be done?  Match with organization’s distinctive competencies?  Obtain the resources needed? Build these into stars or phase out, sell Stars Cash Cows Question Marks Dogs 15 Copyright © 2011 Pearson Education, Inc., publishing as Prentice Hall

 Low growth, low share  May be self-sustaining  One organization’s dog could be another’s cash cow  Discontinue, divest Stars Cash Cows Question Marks Dogs 16 Copyright © 2011 Pearson Education, Inc., publishing as Prentice Hall

Decline Introduction Growth Maturity Time Sales Revenue/ period 17 Copyright © 2011 Pearson Education, Inc., publishing as Prentice Hall

 Define  Evolve  Collaborate 18 Copyright © 2011 Pearson Education, Inc., publishing as Prentice Hall

 Define market niche  Work towards domination  Brand identified as standard  Competitors note equivalence to such products Evolve Define Collaborate 19 Copyright © 2011 Pearson Education, Inc., publishing as Prentice Hall

 Continue to evolve offerings  Keep definitions of value current with market  Present these values to consumers Evolve Define Collaborate 20 Copyright © 2011 Pearson Education, Inc., publishing as Prentice Hall

 Development of ancillary products by other organizations help owners build the market  Third parties define their products as compatible with market owner  Market owner gains insight to other points of view within the market Evolve Define Collaborate 21 Copyright © 2011 Pearson Education, Inc., publishing as Prentice Hall

MARKET ATTRACTIVENESS BUSINESS STRENGTH High Weak Low Strong Medium Protect PositionInvest to Build Build Selectively Limited Expansion or Harvest Manage for Earnings Divest Build Selectively or Manage for Earnings Protect & Refocus Invest/Grow Selectively Earn Harvest/Divest Build Selectively 22 Copyright © 2011 Pearson Education, Inc., publishing as Prentice Hall

Focus on forward-looking measures in four core areas: 1.Financial Performance Perspective 2.Customer Perspective 3.Stakeholder Perspective a)Upper Management b)Partners c)Channels 4.Value Perspective 23 Copyright © 2011 Pearson Education, Inc., publishing as Prentice Hall

 Strategy Implications of Value Networks and Integrated Supply Chain  Strategy Development and the Internet  Volatility and Uncertainty Require Flexibility  Strategy Development in New Businesses 24 Copyright © 2011 Pearson Education, Inc., publishing as Prentice Hall

 Agility  Adaptability  Alignment of members’ interests o Strong supply chains lead to inflexibility o Value networks Strategy Implications of Value Networks and Integrated Supply Chain 25 Copyright © 2011 Pearson Education, Inc., publishing as Prentice Hall

 Manage customer relationships  Streamline purchasing relationships  Increase the speed with which the environment changes  Reduce transaction, shipping and inventory costs Strategy Development and the Internet 26 Copyright © 2011 Pearson Education, Inc., publishing as Prentice Hall

 Increased uncertainty and speed of change makes future inexact  A pursued task is short-lived as definition and boundaries of a business become blurred  Resource allocations across businesses become more critical  Core competencies take on increased importance Volatility and Uncertainty Require Flexibility 27 Copyright © 2011 Pearson Education, Inc., publishing as Prentice Hall