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Topic 5 :Strategy Determination

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Presentation on theme: "Topic 5 :Strategy Determination"— Presentation transcript:

1 Topic 5 :Strategy Determination
Strategic vision defined Customer value Strategies for growth Options for market entry Driving forces of internationalisation Vicious or virtuous spirals Using retailing as an example

2 Defining the Business You are In ? e.g. retailing
Horticulture - selling plants and related products Providing a comprehensive gardening serv Making gardening easier Filling people’s disposable time Entertainment/leisure Fulfilling people’s dreams!

3 MICHAEL PORTER’S Value Chain

4 Customer Driven Value System
Consumers Needs Demographic Socio-economic Geographic Lifestyles Context Occasions Save money Be exclusive Save time Find solutions Save effort Have fun VALUE NEEDED Resources Solutions Buying Human resources Skills/creativity Technology Information Property Product range Prices Product quality Service levels Ambiance Locations VALUE PROVIDED Financial Customer Promotion Market share Profits Share price Satisfaction Loyalty Word of mouth Adverts/PR Internet Brand image VALUE COMMUNICATED

5 Product-Market Matrix
Existing Related New Markets Consolidation Penetration Product improvements Market-led expansion Existing New market segments New ranges Assortment manipulation New services New outlet types Growth Related New Products Diversification New (unrelated) product categories Adapted from: Ansoff , Knee and Walters, McDowell Mudambi .

6 International expansion
Existing proposition Exploring Strategic Space Maximum viable share New products/ services New segments Grow market share Different segments Adjacent segments Unrelated products/ services Related products/ services Existing market segment(s), assortments, trading areas, formats and channels National expansion Modification of format International expansion Different format New formats Linked channel Geographical development Separate channel New channels

7 Retail Value Chain (A process-oriented view of value)
Firm infrastructure Human resources Margin Technology development Procurement Supply chain Store locations and design Marketing and promotion Store operations Service Margin (A process-oriented view of value) Adapted from: Porter ; McGee.

8 Motives for Acquisitions & Mergers
Diversification e.g., Kingfisher Group Defensive e.g., Carrefour and Promodes Market Share/ Economies of Scale e.g., Morrisons - Safeway Co-op Group - Somerfield Synergy/ Skills Transfer e.g., Habitat and Mothercare Alternative Channel Development e.g., Next – Grattan Internationalization e.g., Wal-Mart – Asda Why do firms divest?

9 Driving Forces of Internationalisation

10 Options for International Market Entry


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