Week 3: Lecture A
Strategic Marketing
Agenda
Corporate Strategy Business and Marketing Strategy Marketing Strategy Process Preparing the Marketing Plan
Strategic Marketing
Corporate Strategy
Corporate Strategy
Unique Competitive Position for the company Activities tailored to strategy Clear Trade-offs and choices Competitive advantage arising from fit across activities Sustainability coming from the whole system Operational effectiveness is a given
Its a way a company creates value through the configuration and coordination of its multi-market activities
Strategic Marketing
Strategic Marketing
Corporate Strategy
Corporate Strategy
it is decided in the context of defining the companys mission and vision, i.e, saying what the company does, why and how it exists, and what it is intended to become.
Lays down corporate mission, vision and overall objectives Design effective organization structures and processes Creating organizational culture and philosophies Deciding on attaining distinctive competencies by generating superior human, financial and technological resources and seeking synergy among the firms various businesses
Strategic Marketing
Corporate Strategy
Strategy Component Key Issues
what business should we be in? what customers needs, target segments, and/or technologies should be focused on?
Objectives (SMART)
what performance dimensions? what are the benchmarks? what is the time frame?
Resource Allocation
what are businesses sources of competitive advantage? how do we do things differently and favorably w.r.t the competition?
Synergy
when activities and departments reinforce and complement each other The whole becomes greater than the parts
Strategic Marketing
Corporate Strategy
The reason for companys existence The firms customers and the needs to be met The extent of specialization within each product market and geographical area to be covered The amount and type of diversification The stage in the value chain Managements performance expectation Other guidelines: overall business strategy, technologies to be used and R&D
Strategic Marketing
Corporate Strategy
These are required so that performance can be gauged Objectives are set at several levels in an organization; marketing, finance, HR, operations
be able to measure whether you are meeting the objectives or not.
Strategic Marketing
Corporate Strategy
Objectives:
Generally its more than the financial numbers that you want to achieve
Strategic Marketing
Corporate Strategy
Strategic Marketing
Horizontal Integration
Vertical Integration
Letting some value creation activities within a business be performed by an independent entity or performing a strategic alliance or mergers
Strategic Marketing
Corporate Strategy
Components of Strategy
The strategy of each business unit is mutually exclusive and each businesses act as a separate entity
Strategic Marketing
Corporate Strategy
Components of Strategy
Rationale
Enhances a coherent and focus strategy No duplication or cannibalization Empowering to determine how its share of resource will be used effectively Autonomy leads to accountability
Characteristic
Serves a homogenous market Serves a unique set of product markets Autonomy and control over production, marketing, distribution Has responsibility for its own profitability
Strategic Marketing
Corporate Strategy
Components of Strategy
Jaffer Group of Companies Murshid Builders Shoa
JBS
JBL
Strategic Marketing
Corporate Strategy
Components of Strategy
Strategic Marketing
Corporate Strategy
Marketing
Eg. Penetration strategy Product development strategy Diversificatio n strategy Marketing Mix
Handout: Exhibit 2.5, Ch. 2, Marketing Management-A Strategic Decision Making Approach, Boyd, 4/e, McGraw Hill.
Strategic Marketing
Corporate Strategy
Structure determines the composition of the business Systems are formal policies and procedures Processes are functions or activities
Strategic Marketing
Corporate Strategy
Unitary form / Functional form (U Form) Decomposed into specialized/functional units where similar tasks are group together (such as production and sales)
Coordination of specialized units is centralized by top managers so that economies of scale are obtained, but the coordination problem is harder to solve, as the top managers have to rely on imperfect information transmitted by local managers
Finnance Accounting
Investment
Marketing Product
Sales
MIS Website
Database
Strategic Marketing
Components of a Corporate Strategy Structure, Systems and Processes (Business Model) U-form
M-Form
Headquarter
Headquarter
Business Division Global Division Global Se America Consulting Business Consulting Asia Division AmericaService Busines CRM Marketing Marketing
HRHR B2B
Maint
operating authority is assigned to divisions organized along either product or geographic lines Strategic decisions are made at the executive office who
also audits and evaluates the performance of the divisions and allocates capital among the divisions based on the relative performances of the divisions.
Strategic Marketing
M-Form
Headquarter
Headquarter
Headquarte
Business Division Global Division Global S America Consulting Business Consulting Asia Division AmericaService Busin CRM Marketing Marketing
HRHR B2B
Ma
local managers can more easily solve the coordination problem by making good use of local information, but then the advantages of specialization are not fully appropriated and there is duplication.
Strategic Marketing
Corporate Strategy
M-form organization is able to promote innovation or reform through experimentation, that is, it can experiment an innovation or reform program in some part of the organization first before implementing it in the entire organization. serious problems are likely to arise under the U-form between functional departments, such as production and sales, when the firm introduced new products or adopted innovations
Strategic Marketing
Corporate Strategy
If the business of businesses are adding value to the overall business of the company? Are the offshoots a good strategic fit? Harvest, Divest or Invest?
Strategic Marketing
Strategic Marketing
Marketing is so basic that it cannot be considered a separate function with in the business. Marketing requires separate work and distinct group of activities. But it is first, a central dimension of the entire business. It is the whole business seen from the point of view of its final result, that is from the customers point of view Peter F. Drucker Because the purpose of business is to create a customer, the business enterprise has two--and only two--basic functions: marketing and innovation; rest are costs! Peter F. Drucker
Strategic Marketing
Strategic Marketing is a market driven process of strategy development, taking into account a constantly changing business environment and the need to deliver customer value
Strategic Marketing
Strategic Marketing
For a market to exist, there must be people with particular needs and wants and buyers must be willing to purchase a product to satisfy their needs Analyzing markets and forecasting their change Evaluating competitors strategy
Segmenting Markets
Identifying distinct buyers with similar needs Evaluating future transformations and transitions
Strategic Marketing
Selecting attractive segments to target Carving out Unique Selling Proposition or differentiation
collaboration with customers, channel members, suppliers, competitors, and internal teams to achieve greater value strategic partnering is the mainstay as compared to vertical integration
Strategic Marketing
New product planning starts with identifying gaps in customer satisfaction the differences between available product attributes than the desired provides opportunities
Deciding on the 4Ps that implement the positioning strategy. Product: Developing new products, managing existing ones and deciding what to do with problem ones Pricing Decisions Promotion Distribution
Strategic Marketing
preparing the market plan and budget using the plan in implementing and controlling the strategy
Activities to implement;
who does what, the dates or milestones, location of implementation and how this implementation will be accomplished
Strategic Marketing
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