Corporate Strategies. Organizations (Types) Business Firm Business Firm Privately owned organization...

Corporate Corporate StrategiesStrategies

Organizations (Types)Organizations (Types)

Business FirmBusiness Firm Privately owned organization that Privately owned organization that

serves its customers in order to serves its customers in order to earn a profit. Must earn a profit.earn a profit. Must earn a profit.

Profit is the reward to a business Profit is the reward to a business firm for the risk it undertakes in firm for the risk it undertakes in offering a product for sale. It’s the offering a product for sale. It’s the money left over after a firm’s total money left over after a firm’s total expenses are subtracted from it’s expenses are subtracted from it’s total revenuestotal revenues

Nonprofit OrganizationNonprofit Organization Nongovernmental organization that Nongovernmental organization that

serves its customers but does not serves its customers but does not have profit as an organizational have profit as an organizational goalgoal

Organizations (Types)Organizations (Types)

Organizations (Levels)Organizations (Levels)

Corporate LevelCorporate Level Top management directs overall Top management directs overall

strategy for the entire organizationstrategy for the entire organization

Organizations (Levels)Organizations (Levels)

Business UnitBusiness Unit Organization that makes a set of related Organization that makes a set of related

products to a clearly defined group of products to a clearly defined group of customerscustomers

Business unit level is the level at which Business unit level is the level at which business unit managers set direction for business unit managers set direction for their products and markets to exploit their products and markets to exploit value, creating opportunitiesvalue, creating opportunities

Direction is more specific hereDirection is more specific here Each unit has specialized activitiesEach unit has specialized activities

Organizations (Levels)Organizations (Levels)

Functional LevelFunctional Level Groups of specialists actually create Groups of specialists actually create

value for the organizationvalue for the organization DepartmentsDepartments Direction is more specific and Direction is more specific and

focusedfocused Ex: Accounting, Marketing, Ex: Accounting, Marketing,

CommunicationsCommunications Most of the work gets done at this Most of the work gets done at this

levellevel

Organizations (Teams)Organizations (Teams)

Cross-Functional TeamsCross-Functional Teams Small number of people from Small number of people from

different departments in an different departments in an organization who are mutually organization who are mutually accountable to a common set of accountable to a common set of performance goalsperformance goals

Organizations (The Mission)Organizations (The Mission)

MissionMission A statement of the organizations A statement of the organizations

scope, often identifying its scope, often identifying its customers, markets, products, customers, markets, products, technology, and valuestechnology, and values

Mission StatementMission Statement Usually inspirationalUsually inspirational

Organizations Organizations (Mission Statement)(Mission Statement)

The Mission of Southwest AirlinesThe Mission of Southwest Airlines The mission of Southwest Airlines is dedication to the The mission of Southwest Airlines is dedication to the

highest quality of Customer Service delivered with a highest quality of Customer Service delivered with a sense of warmth, friendliness, individual pride, and sense of warmth, friendliness, individual pride, and Company Spirit. Company Spirit.

To Our EmployeesTo Our Employees We are committed to provide our Employees a stable We are committed to provide our Employees a stable

work environment with equal opportunity for learning work environment with equal opportunity for learning and personal growth. Creativity and innovation are and personal growth. Creativity and innovation are encouraged for improving the effectiveness of encouraged for improving the effectiveness of Southwest Airlines. Above all, Employees will be Southwest Airlines. Above all, Employees will be provided the same concern, respect, and caring provided the same concern, respect, and caring attitude within the organization that they are expected attitude within the organization that they are expected to share externally with every Southwest Customer.to share externally with every Southwest Customer.

Organizations Organizations (Mission Statement)(Mission Statement)

Above all else, we are committed to the care andAbove all else, we are committed to the care andimprovement of human life. In recognition of this improvement of human life. In recognition of this commitment, we strive to deliver high quality, cost commitment, we strive to deliver high quality, cost effective healthcare in the communities we serve.effective healthcare in the communities we serve.

In pursuit of our mission, we believe the following In pursuit of our mission, we believe the following value statements are essential and timeless.value statements are essential and timeless. We recognize and affirm the unique and intrinsic We recognize and affirm the unique and intrinsic

worth of each individual.worth of each individual. We treat all those we serve with compassionWe treat all those we serve with compassion

and kindness.and kindness. We act with absolute honesty, integrity and We act with absolute honesty, integrity and

fairness in the way we conduct our business and fairness in the way we conduct our business and the way we live our lives.the way we live our lives.

We trust our colleagues as valuable members of We trust our colleagues as valuable members of our healthcare team and pledge to treat one our healthcare team and pledge to treat one another with loyalty, respect and dignity.another with loyalty, respect and dignity.

Organizations Organizations (Mission Statement)(Mission Statement)

The mission of the Tennessee Performing The mission of the Tennessee Performing Arts Center is "to provide facilities, services Arts Center is "to provide facilities, services and programs of the highest quality for the and programs of the highest quality for the greatest benefit of the people, institutions greatest benefit of the people, institutions and communities of the state, and to take a and communities of the state, and to take a leadership role in fostering the performing leadership role in fostering the performing arts, arts education, resident arts groups arts, arts education, resident arts groups

and other arts organizations."and other arts organizations."

Organizations (The Culture)Organizations (The Culture)

Organizational CultureOrganizational Culture A set of values, ideas, and A set of values, ideas, and

attitudes that is learned and attitudes that is learned and shared among the members of an shared among the members of an organizationorganization

Mergers with other companiesMergers with other companies

Organizations (The Culture)Organizations (The Culture)

StakeholdersStakeholders The people who are affected by The people who are affected by

what the company does and how what the company does and how well it performswell it performs Employees, owners, board members, Employees, owners, board members,

suppliers, distributors, unions, suppliers, distributors, unions, customers, local communitiescustomers, local communities

Organizations (Goals)Organizations (Goals)

Goals (or objectives)Goals (or objectives) Statements that are usually in the Statements that are usually in the

marketing plan, tell what should marketing plan, tell what should be accomplished by a certain timebe accomplished by a certain time

Can be at corporate level, Can be at corporate level, business unit level, or functional business unit level, or functional level – work togetherlevel – work together

Needs to be measurableNeeds to be measurable

Organizations (Goals)Organizations (Goals)

Types of GoalsTypes of Goals ProfitProfit SalesSales Market Share (ratio of sales revenue of the Market Share (ratio of sales revenue of the

firm to the total sales revenue of all firms in firm to the total sales revenue of all firms in the industry, including the firm itself)the industry, including the firm itself)

QualityQuality Customer SatisfactionCustomer Satisfaction Employee WelfareEmployee Welfare Social ResponsibilitySocial Responsibility

Growth StrategiesGrowth Strategies

CompetenciesCompetencies An organization’s special An organization’s special

capabilities including skills, capabilities including skills, technologies, and resources that technologies, and resources that distinguish it from other distinguish it from other organizationsorganizations

Growth StrategiesGrowth Strategies

Competitive AdvantageCompetitive Advantage Something an organization does better than Something an organization does better than

competitors. Usually in regards to quality, competitors. Usually in regards to quality, great customer service, lowest prices, etc.great customer service, lowest prices, etc.

Growth StrategiesGrowth Strategies

BenchmarkingBenchmarking Discovering how others do Discovering how others do

something better than you so you something better than you so you can imitate or leapfrog competitioncan imitate or leapfrog competition

Growth StrategiesGrowth Strategies

Business Portfolio AnalysisBusiness Portfolio Analysis Market-Product AnalysisMarket-Product Analysis

Growth Strategies:Growth Strategies:Business Portfolio AnalysisBusiness Portfolio Analysis

Analyses an organization’s Analyses an organization’s business units as though they business units as though they are separate investmentsare separate investments

Growth Strategies:Growth Strategies:Business Portfolio AnalysisBusiness Portfolio Analysis

Vertical AxisVertical Axis Represents the market growth Represents the market growth

rate (meaning how much per year rate (meaning how much per year that industry is growing)that industry is growing)

Horizontal AxisHorizontal Axis Represents the relative market Represents the relative market

share (divide SBU sales by sales share (divide SBU sales by sales of largest firm in the industry)of largest firm in the industry)

Growth Strategies:Growth Strategies:Business Portfolio AnalysisBusiness Portfolio Analysis

Cash CowsCash Cows Question MarksQuestion Marks DogsDogs StarsStars

Growth Strategies:Growth Strategies:Business Portfolio AnalysisBusiness Portfolio Analysis

Cash CowsCash Cows Lower left quadrantLower left quadrant Generate a lot of cash, more than Generate a lot of cash, more than

they need, gives money to help they need, gives money to help with company overhead and with company overhead and invest into other SBUsinvest into other SBUs

Have dominate market shareHave dominate market share Slow-growth marketSlow-growth market Ex: Kodak FilmEx: Kodak Film

Growth Strategies:Growth Strategies:Business Portfolio AnalysisBusiness Portfolio Analysis

StarsStars Upper left quadrantUpper left quadrant High market shareHigh market share High growth marketHigh growth market May not have enough money to May not have enough money to

continue growthcontinue growth Likely to become Cash CowsLikely to become Cash Cows Ex: Kodak digital cameraEx: Kodak digital camera

Growth Strategies:Growth Strategies:Business Portfolio AnalysisBusiness Portfolio Analysis

Question Marks (or Problem Question Marks (or Problem Children)Children) Upper right quadrantUpper right quadrant Low market shareLow market share High growth marketHigh growth market Have to have lots of cash to Have to have lots of cash to

maintain market sharemaintain market share Ex: Kodak at-home printersEx: Kodak at-home printers

Growth Strategies:Growth Strategies:Business Portfolio AnalysisBusiness Portfolio Analysis

DogsDogs Lower right quadrantLower right quadrant Low market shareLow market share Low growth marketLow growth market May have enough money to keep May have enough money to keep

them afloat, but may not ever be them afloat, but may not ever be “big” for firm“big” for firm

Ex: Kodak self-service kiosksEx: Kodak self-service kiosks

Growth Strategies:Growth Strategies:Business Portfolio AnalysisBusiness Portfolio Analysis

Normally SBUs begin as Normally SBUs begin as Question Marks, then become Question Marks, then become Stars, Cash Cows, then DogsStars, Cash Cows, then Dogs

Can’t really control market Can’t really control market growth rategrowth rate

Want to increase market shareWant to increase market share

Growth Strategies:Growth Strategies:Business Portfolio AnalysisBusiness Portfolio Analysis

Growth Strategies:Growth Strategies:Market-Product AnalysisMarket-Product Analysis

A way to look at growth using A way to look at growth using markets and productsmarkets and products

ProductsProducts Current marketCurrent market Potential new marketPotential new market

MarketsMarkets Current productCurrent product Potential new productPotential new product

Growth Strategies:Growth Strategies:Market-Product AnalysisMarket-Product Analysis

Market PenetrationMarket Penetration Try to increase sales of current Try to increase sales of current

products in current marketsproducts in current markets Basic products do not change, Basic products do not change,

market served does not changemarket served does not change How can sales be increased?How can sales be increased?

Growth Strategies:Growth Strategies:Market-Product AnalysisMarket-Product Analysis

Market DevelopmentMarket Development Try to sell current products to new Try to sell current products to new

marketsmarkets Basic products do not change, Basic products do not change,

market served do changemarket served do change

Growth Strategies:Growth Strategies:Market-Product AnalysisMarket-Product Analysis

Product DevelopmentProduct Development Try to sell new products to current Try to sell new products to current

marketsmarkets New products are introduced to New products are introduced to

current market servedcurrent market served

Growth Strategies:Growth Strategies:Market-Product AnalysisMarket-Product Analysis

DiversificationDiversification Try to sell new products to new Try to sell new products to new

marketsmarkets New products are introduced to New products are introduced to

new markets servednew markets served

Strategic Marketing ProcessStrategic Marketing ProcessPhase I: PlanningPhase I: Planning

The process an organization The process an organization uses when they allocate uses when they allocate marketing mix resources to marketing mix resources to reach their target marketreach their target market

Create a marketing planCreate a marketing plan A road map for the marketing A road map for the marketing

activities of an organization for a activities of an organization for a specified future period of timespecified future period of time

Strategic Marketing ProcessStrategic Marketing ProcessPhase I: PlanningPhase I: Planning

Want to figure out where you Want to figure out where you are, where you’d like to be, and are, where you’d like to be, and how you’re going to get therehow you’re going to get there

Strategic Marketing ProcessStrategic Marketing ProcessPhase I: PlanningPhase I: Planning

Begin with a Situation Analysis Begin with a Situation Analysis (SWOT Analysis)(SWOT Analysis) S – Strengths (Internal)S – Strengths (Internal) W – Weaknesses (Internal)W – Weaknesses (Internal) O – Opportunities (External)O – Opportunities (External) T – Threats (External)T – Threats (External)

Can focus on product, product Can focus on product, product line, business unit, or whole line, business unit, or whole organizationorganization

Strategic Marketing ProcessStrategic Marketing ProcessPhase I: PlanningPhase I: Planning

Obtain a clear understanding of Obtain a clear understanding of the following areas:the following areas: Trends in the firm’s industryTrends in the firm’s industry Know as much as possible of Know as much as possible of

competitioncompetition Assess your organizationAssess your organization Know as much as possible about Know as much as possible about

your customers and prospective your customers and prospective customerscustomers

Strategic Marketing ProcessStrategic Marketing ProcessPhase I: PlanningPhase I: Planning

Once the SWOT is created, take Once the SWOT is created, take the information you’ve learned the information you’ve learned and act on itand act on it Build strengthsBuild strengths Correct weaknessesCorrect weaknesses Exploit opportunitiesExploit opportunities Avoid threatsAvoid threats

Strategic Marketing ProcessStrategic Marketing ProcessPhase I: PlanningPhase I: Planning

Market-Product Focus and Goal Market-Product Focus and Goal SettingSetting After analyzing SWOT, the After analyzing SWOT, the

organization must decide which organization must decide which products they’ll offer to which products they’ll offer to which customerscustomers

Strategic Marketing ProcessStrategic Marketing ProcessPhase I: PlanningPhase I: Planning

Market SegmentationMarket Segmentation Aggregating prospective buyers Aggregating prospective buyers

into groups, or segments, that into groups, or segments, that have common needs and will have common needs and will respond similarly to a marketing respond similarly to a marketing actionaction

May have different marketing May have different marketing programs for different segmentsprograms for different segments

Strategic Marketing ProcessStrategic Marketing ProcessPhase I: PlanningPhase I: Planning

Market SegmentationMarket Segmentation Different market segments may Different market segments may

have different goalshave different goals Points of differencePoints of difference

Characteristics of a product that Characteristics of a product that make it superior to competitive make it superior to competitive substitutessubstitutes

Strategic Marketing ProcessStrategic Marketing ProcessPhase I: PlanningPhase I: Planning

The Marketing ProgramThe Marketing Program In this step of the planning phase, In this step of the planning phase,

the budget and marketing mix is the budget and marketing mix is createdcreated

Strategic Marketing ProcessStrategic Marketing ProcessPhase II: ImplementationPhase II: Implementation

Carries out market program that was Carries out market program that was developed in planning phasedeveloped in planning phase

Obtain resourcesObtain resources Find a way to get money to finance Find a way to get money to finance

marketing programmarketing program Design marketing organizationsDesign marketing organizations

Helps put marketing program into effect Helps put marketing program into effect (marketing department)(marketing department)

Develops schedulesDevelops schedules Basically a timelineBasically a timeline

Strategic Marketing ProcessStrategic Marketing ProcessPhase II: ImplementationPhase II: Implementation

Execute marketing programExecute marketing program Marketing strategy is the means Marketing strategy is the means

by which a marketing goal is to be by which a marketing goal is to be achieved, usually characterized by achieved, usually characterized by a specified target market and a specified target market and marketing program to reach itmarketing program to reach it

Marketing tactics are detailed day Marketing tactics are detailed day to day, operational decisions to day, operational decisions essential to the overall success of essential to the overall success of marketing strategiesmarketing strategies

Strategic Marketing ProcessStrategic Marketing ProcessPhase II: ControlPhase II: Control

Make sure the marketing Make sure the marketing program is doing what it’s program is doing what it’s supposed to be doingsupposed to be doing

Compare what’s happening to Compare what’s happening to what was plannedwhat was planned

Make changes if neededMake changes if needed