Strategic market management chapter 1

© 2005 John Wiley & Sons Strategic Market Management By David A Aaker Vice-Chairman, Prophet Professor Emeritus, University of California at Berkeley PPT 1-1 Chapter One © 2005 John Wiley & Sons Strategic Market Management-Introduction and Overview Copyright © 2010John Wiley & Sons, Inc All rights reserved Reproduction or translation of this work beyond that permitted in Section 117 of the 1976 United States Copyright Act without the express written permission of the copyright owner is unlawful Requests for further information should be addressed to the Permissions Department, John Wiley & Sons, Inc The purchaser may make back-up copies for his/her own use only and not for distribution or resale The Publisher assumes no responsibility for errors, omissions, or damages, caused by the use of these programs or from the use of the information contained herein PPT 1-2 © 2005 John Wiley & Sons “Plans are nothing, planning is everything.” - Dwight D Eisenhower PPT 1-3 © 2005 John Wiley & Sons “Even if you are on the right track, you’ll get run over if you just sit there.” - Will Rodgers PPT 1-4 © 2005 John Wiley & Sons “If you don’t know where you are going, you might end up somewhere else.” - Casey Stengel PPT 1-5 © 2005 John Wiley & Sons Management Tasks • • • • • Strategic Analysis Innovation Multiple Business—Strategies and Issues Creating SCAs Developing Growth Platforms PPT 1-6 What is a Business Strategy? • The Product-Market Investment Strategy – where to compete © 2005 John Wiley & Sons • The Customer Value Proposition • Assets and Competencies • Functional Strategies and Programs PPT 1-7 A Business Strategy – Figure 1.1 Page Where to Compete The product-market investment decision © 2005 John Wiley & Sons A Business Business Strategy Strategy A How to Compete Value proposition Assets & competencies Function area strategies and programs Figure 1.1 PPT 1-8 The Product-Market Investment Strategy • Invest to grow (or enter a product market) © 2005 John Wiley & Sons • Invest only to maintain the existing position • Milk the business by minimizing investment • Recover as many of the assets as possible by liquidating or divesting the business PPT 1-9 Product-Market Growth Directions © 2005 John Wiley & Sons Present Present Products Products New New Products Products Present Present Markets Markets Market Market Penetration Penetration Product Product Expansion Expansion New New Markets Markets Market Market Expansion Expansion Diversification Diversification Figure 2.4 PPT 1-10 The Customer Value Proposition Perceived benefit to customer: • Functional © 2005 John Wiley & Sons • Emotional • Social • Self-Expressive PPT 1-11 Customer Value Proposition Examples: • A good value • Excellence on an important product or service attribute • The best overall quality © 2005 John Wiley & Sons • Product line breadth • Innovative offerings • A shared passion for an activity or a product • Global connections and prestige PPT 1-12 Assets and Competencies Strategic Competency: – What a business unit does exceptionally well © 2005 John Wiley & Sons – Has strategic importance to the business – Based on knowledge or a process Strategic Asset: – A resource PPT 1-13 © 2005 John Wiley & Sons Functional Strategies and Programs • Manufacturing strategy • Global strategy • Distribution strategy • Logistical strategy • Brand-building strategy • Quality program • Customer relationship program • Social technology strategy • Communication strategy • Information technology strategy • Sourcing Strategy PPT 1-14 Criteria to Select Business Strategies • Is the ROI attractive? • Is there a SCA? © 2005 John Wiley & Sons • Will the strategy have success in the future? • Is the strategy feasible? • Does the strategy fit with the other strategies of the firm? PPT 1-15 Overview of Strategic Market Management External Analysis © 2005 John Wiley & Sons • • • • Customer Analysis Competitor Analysis Market/submarket Analysis Environmental Analysis Internal Analysis • Performance Analysis • Determinants of strategic options Strategic Strategic Analysis Analysis Outputs Outputs Creating, Creating, Adapting, Adapting, and and Implementing Implementing Strategy Strategy Figure 2.1 PPT 1-16 Why Strategic Market Management? • Precipitate the consideration of strategic choices • Help a business cope with change • Force a long-range view © 2005 John Wiley & Sons • Make visible the resource allocation decision • Aid strategic analysis and decision making • Provide a strategic management and control system • Provide both horizontal and vertical communication and coordination systems PPT 1-17 © 2005 John Wiley & Sons Marketing and Strategy PPT 1-18 © 2005 John Wiley & Sons Key Learnings • Strategy needs to succeed in a dynamic market • A business strategy includes the determination of the product-market scope and its dynamics (as reflected in the intensity of the business investment), the customer value proposition, assets and competencies, and functional strategies and programs • External analysis includes analyses of customers, competitors, markets, and the environment Internal analysis includes a performance appraisal and an examination of organizational strengths, weaknesses, problems, constraints, and strategic options • The role of these analyses is to identify existing or emerging opportunities, threats, trends, strategic uncertainties, and strategic options • The marketing team needs to be a partner in strategy and by involved in overcoming silo barriers PPT 1-19 © 2005 John Wiley & Sons Ancillary Slides PPT 1-20 © 2005 John Wiley & Sons “It isn’t that they can’t see the solution, it’s that they can’t see the problem.” - G K Chesterton PPT 1-21 © 2005 John Wiley & Sons “Experience, to most men, is like the stern lights of a ship, which illuminate only the track it has passed.” - Samuel Coleridge PPT 1-22 © 2005 John Wiley & Sons “Strategy is a framework which guides those choices that determine the nature and direction of an organization.” -Benjamin B Tregoe & John W Zimmerman “Top Management Strategy” PPT 1-23 © 2005 John Wiley & Sons “In terms of the three key players (competitors, customers, company) strategy is defined as the way in which a corporation endeavors to differentiate itself positively from its competitors, using its relative corporate strengths to better satisfy customer needs.” -Kenichi Ohmae “The Mind of the Strategist” PPT 1-24 © 2005 John Wiley & Sons “Business has only two basic functions - marketing and innovation.” - Peter Drucker PPT 1-25 ... strategies of the firm? PPT 1- 15 Overview of Strategic Market Management External Analysis © 2005 John Wiley & Sons • • • • Customer Analysis Competitor Analysis Market/ submarket Analysis Environmental... of strategic options Strategic Strategic Analysis Analysis Outputs Outputs Creating, Creating, Adapting, Adapting, and and Implementing Implementing Strategy Strategy Figure 2 .1 PPT 1- 16 Why Strategic. .. the business PPT 1- 9 Product -Market Growth Directions © 2005 John Wiley & Sons Present Present Products Products New New Products Products Present Present Markets Markets Market Market Penetration