1. Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. Developed by Cool Pictures and MultiMedia Presentations Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. Developed by Cool Pictures and MultiMedia Presentations

2. Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. Developed by Cool Pictures and MultiMedia Presentations Displays a deep and enduring commitment to the principle that the purpose of a business is to attract and satisfy customers at a profit. Market-Driven Organizations

3. Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. Developed by Cool Pictures and MultiMedia Presentations Market-Driven Organizations Market-Sensing  Centered on customers.  Take an outside-in view of strategy.  Demonstrate an ability to sense market trends.  Market monitoring is frequent and intensive. Customer-Linking  Possess special skills for creating and managing close customer relationships.  Special attention is given to the choice of which. customers to serve collaboratively. Develop  The appropriate structural linkages.  Information systems.  Management processes.

4. Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. Developed by Cool Pictures and MultiMedia Presentations This orientation is achieved and sustained by making appropriate moves along four interlocking dimensions. Dimensions of Market-Driven Management

5. Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. Developed by Cool Pictures and MultiMedia Presentations The major components of the business concept are tied together by three important “bridge” elements: customer benefits, configuration, and company boundaries. CUSTOMER INTERFACE Fulfillment & Support Information & Insight Relationship Dynamics Pricing Structure CORE STRATEGY Business Mission Product/Market Scope Basis for Differentiation STRATEGIC RESOURCES Core Competencies Strategic Assets Core Processes VALUE NETWORK Suppliers Partners Coalitions EFFICIENT / UNIQUE / FIT / PROFIT BOOSTERS

6. Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. Developed by Cool Pictures and MultiMedia Presentations Core Strategy—Three Elements 1.The business mission describes the overall objective of the strategy, sets a course of direction, and defines a set of performance criteria that will be used to measure progress. 2.Product/market scope defines where the firm competes. 3.Basis for differentiation captures the essence of how a firm competes differently than its rivals.

7. Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. Developed by Cool Pictures and MultiMedia Presentations Strategic Resources 1.Core competencies are the set of skills, systems, and technologies that creates uniquely high value for customers. 2.Strategic assets are the more tangible requirements for advantage. Strategic assets are brands, customer data, distribution coverage, patents. 3.Core processes are the methodologies and routines that companies use to transform competencies, assets, and other inputs into value for customers.

8. Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. Developed by Cool Pictures and MultiMedia Presentations Customer Interface Fulfillment and support Information and insight Relationship dynamics Pricing structure

9. Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. Developed by Cool Pictures and MultiMedia Presentations Three Major Levels of Strategy 1.Corporate strategy defines the business in which a company will compete. 2.Business-level strategy centers on how a firm will compete in a given industry and will position itself. 3.Functional strategy centers on how resources allocated to the various functional areas can be used more efficiently and effectively.

10. Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. Developed by Cool Pictures and MultiMedia Presentations Marketing is perhaps best understood as 1.The customer-produce connection—linking the customer to the focal offering. 2.The customer-service delivery connection—the design and delivery actions involved in providing a firm’s goods and services. 3.The customer-financial accountability connection. Activities and processes that link customers to financial outcomes.

11. Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. Developed by Cool Pictures and MultiMedia Presentations This approach applies to strategic decisions that 1.Cut across functional areas. 2.Involve issues related to the organization’s long-term objectives. 3.Involve the allocation of resources. A Collective Action Perspective of the Strategy Formulation Process

12. Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. Developed by Cool Pictures and MultiMedia Presentations New products or services that require customers to dramatically change their past behavior, with the promise of gaining equally-dramatic new value. Discontinuous Innovation Strategies

13. Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. Developed by Cool Pictures and MultiMedia Presentations Cross-Functional Connections Explores the Interrelationships Between Marketing and Four Business Functions Formulating Business Marketing Strategy: Vital Cross-Functional Connections