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business, 4. Mobile phone handset business back on track, & 5. Increase in share value.
The
right Corporate Strategy to survive in a complex & more demanding business environment.
Corporate
strategy is the way by which a company creates value through the configuration and coordination of its multi-tier market activities.
Michael E. Porter
IBMs transition from being a manufacturer of computer hardware only, to a solutions provider, to the provider of a smarter planet succeeded.
Tapal created a new category in Tea and succeeded. WHAT DO THESE COMPANIES HAVE IN COMMON?
vis competition 4. Competitive advantage backed by relevant activities 5. Sustainability & 6. Operational effectiveness.
Airbus A380: PanEuropean plane; capacity: 555 passengers. Wingspan as tall as a 9-storey building;
Processes.
Why Vision?
To answers the question - What is the corporation about, what does it do? To provide overall guideline & direction to the business; Vision needs periodic review: Why? 1. Changes in the environment & 2. Need to sustain competitive advantage.
Why objectives?
To
market share growth, quality improvements, employee training & development, earnings growth. At what levels are objectives set? Several levels - but aligned with corporate objectives. How does one keep track of performance?
What does a Balanced Scorecard do? 1. Translate vision into operational goals; 2. Communicate & link vision with individual performance; 3. Help in business planning & index setting; 4. Provide feedback, learning for adjusting strategy as needed.
competitive entry.
ANY EXAMPLE???
miniaturization of electronic products resulted in the creation of Sony Walkman, and later, Sony VAIO personal computers. The Internet links computer users to Sonys music & entertainment business.
Allows grouping of similar businesses to form Strategic Business Units (SBUs), & to facilitate decision-making.
of products, or a mix of related products, that meet a similar market need, or a group of related needs.
SBU = a cohesive organizational unit
processes?
To control & coordinate the activities of various business units & Dell Computers offers superior value staff functions. through customization and prompt service.
easyJet, in Europe offers no-frills
HOW? Assessing how every business unit contributes (positively) to the corporation; Evaluating them against other businesses, for allocation of resources & investments for the future.
Does
selection of a sound strategy lead to business success? the uncontrollable external environment (demand, competition, government policies) influence business success?
Does
A key measure of success is the impact they have on results. Factors that influence the result:
1. Strategic choices a business or function makes; 2. Environmental factors.
Role of the Marketing Director/ CMO: 1. Strategy formulation & 2. Ensuring consistency with business priorities & 3. Ensuring integration with other functional strategies.
From a customer perspective, strategy must: Have market attractiveness, Possess clear customer orientation,
Communicate
value advantage.
Strategic situation analysis: 2. Segmenting/ creating market segments Examine differences in customers needs & wants, & Identify buyers with similar characteristics. HOW? Use information on peoples past behavior, preferences, reasons for buying Q: What kind of people consume Red Bull?
What is involved?
1. Market targeting & strategic positioning; 2. Building marketing relationships; & 3. Developing & introducing new products.
1. Market targeting and strategic positioning Influence of situational factors e.g. industry type, nature of business & extent of product differentiation. The challenge: Deciding how, when, & where to compete. Segment selection: Calculating segment potential & identifying importance for firm.
1. Market targeting and strategic positioning Deciding on positioning strategy what is positioning strategy?
1. Market targeting and strategic positioning Frozen food is a very competitive supermarket/ retail category because retail space is limited. Brands by K&N have invested in a chain of retail outlets to gain competitive advantage and continue to capitalize on it.
IBM competes in software with Oracle, but partners with them in business consulting competes with Microsoft in software, but partners with the company in some regions to sell Intel severs. Cisco Systems, longtime IBM partners now compete in areas that were seen as IBMs domain.
3. Developing & introducing New Products: Finding & evaluating ideas, Selecting/ developing those most promising, Designing marketing programs, Market testing, and Market introduction. Innovation plays a major role in new product development the 3M example
Minnesota Mining and Manufacturing (3M) has a reputation for innovation. What are their Core Strategies? Keep business units small; Encourage experimentation/ risktaking; Motivate & rewarding innovators; Stay close to the customer; Share technology with other firms; & Avoid killing projects that staff supports.
1. Preparing the Marketing Plan & Budget; Plan outline: A. Strategic Situation Summary B. Market Target (Description) C. Objective for Market Target (Sales, Profits, Position) D. Marketing Program Positioning Strategy E. Forecasts & Budgets.
Marketing Program Positioning Strategy: 1. Product strategy 2. Distribution strategy 3. Price strategy 4. Promotion strategy 5. Marketing Research 6. Coordination with Other Business Functions.