IIPM Marketing Strategy 3b

8/3/2019 IIPM Marketing Strategy 3b

1/16

Marketing Strategy

-Strategic Options and

Choices(1)

ByK. Sashi Rao

Training and Management Consultant


2/16

STRATEGIC OPTIONS

Basic purpose is to develop strategies to enlarge thescope of a firms operations and activities

This can be done by adopting either singly or incombination the broad options of growth, stability orretrenchment/withdrawal

A firms strategy is basically concerned with its

choice of businesses, products and markets that itwishes to be engaged in


3/16

DEVELOPING STRATEGICOPTIONS

SWOTANALYSIS

ORGANIZATIONAL

PURPOSE

ENVIRONMENTAL

BASED OPTIONS

-Generic strategies

-Market options

-Expansion methods

RESOURCE

BASED OPTIONS

-Resource driven

-Value chain

-Cost reductionRANGE OF

STRATEGIC

CHOICES

FINAL

STRATEGIC

OPTION SELECTION


4/16

STRATEGIC FORMULATION

- Framework

External

Environment

AnalysisObjectives

Goals

Targets

Internal

Environment

Analysis

Gap Analysis

Key Success

Factors

SWOT

Analysis

Product-Market

Portfolio

Analysis

Growth

StrategiesStrategy

Formulation

Strategic Plan

Business/

Cooperative

Strategies

Strategy

Implementation& Evaluation

Values, beliefs

Vision StatementMission

Statement


5/16

STRATEGIC GROWTH

OPTIONS Growththro increased market size, market share

and by acquiring similar businesses

Growththro other businesses by diversification

into unrelated areas Growth via economic results and profitability

yardsticks

Growth determined by its existing resources and

capabilities by higher productivity


6/16

STRATEGIC CHOICE

- the definition Strategic choice seeks answers to What shall we

do?; How do we go about it? And How do weget things done

Many available options exist- based onenvironmental and internal factors;growth/expansion/stability and others

Hence, strategic choice becomes complex,

unwieldy, time consuming and often confusing as itthrows up contradictory choices


7/16

PRODUCT/MARKET GRID(

Ansoff)

MARKET

PENETRATION

PRODUCT

DEVELOPMENT

MARKET

DEVLPMNT. DIVERSIFICATION

CURRENT

PRODUCTS

NEW

PRODUCTS

CURRENT

MARKETS

NEW

MARKETS


8/16

PRODUCT/MARKET GRID

(Ansoff)-advanced

MARKET

PENETRATION

PRODUCT

DEVELOPMENT

MARKET

DEVLPMNT. DIVERSIFICATION

CURRENT

PRODUCTS

NEW

PRODUCTS

CURRENT

MARKETS

NEW

MARKETS

Withdrawal

Focused attention

Privatization

Related markets

Unrelated marketsMore

Customers

More

Products


9/16

EXPANSION METHOD MATRIX

Internal

Development

( as already

covered)

Merger

Acquisition

Joint venture

Alliance

Franchise

Exporting

Overseas offices

Overseas manufactureMNC operation

Global operation

Merger

Acquisition

Joint venture

AllianceFranchise

Turnkey

Licensing

COMPANYInside Outside

GEOGRAPHICAL

LOCATION

Home

Country

Overseas

Location


10/16

GENERIC STRATEGIC

OPTIONS( Michael Porter)

COST

LEADERSHIP

DIFFERENTIATION

MARKET FOCUS

COMPETITIVE

SCOPE

COMPETITIVE ADVANTAGE

Narrow

Broad

Low cost Differentiation


11/16

GENERIC STRATEGIES COST LEADERSHIP-aim here is to lower costs than ones

competitors without reduced quality and achieve economiesof scale; avoids costs to differentiate products

PRODUCT DIFFERENTIATION- attempts to differentiate

products thro innovation, added value and superior qualityand service ; offer unique selling proposition MARKET FOCUS- focus on particular market segments or

geographies to attain dominance

THESE STRATEGIES ARE NOT MEANT TO BE MUTUALLY

EXCLUSIVE AND CAN BE USED SINGLY OR IN COMBINATIONDEPENDING ON THE BUSINESS OUTLOOK AND ALSO LINKEDTO PRODUCT LIFE CYCLES


12/16

GENERIC STRATEGIES

FRAMEWORK(1)COST

LEADERSHIPBROAD

DIFFERENTATION

COSTFOCUS

DIFFERENTIATIONFOCUS

Basis of competitive advantage

CompetitiveScope/TargetMarket

Narrow

Broad


13/16

GENERIC STRATEGIES

FRAMEWORK(2)LOW COST

LEADERSHIPBROAD

DIFFERENTATION

LOW COSTFOCUS

FOCUSEDDIFFERENTIATION

Basis of competitive advantage

CompetitiveScope/TargetMarket

Narrow

Broad

BEST COSTPROVIDER

(Hybrid)


14/16

GENERIC STRATEGIES (within

auto industry)- M.Porter Toyota- low cost producer based on cost leadership throhigh volumes, lean production, highly efficient supplychain/distribution and low servicing cost

GM-broad differentiation strategy by competing in most

segments and tries to differentiate thro better styling andinnovative features Hyundai- cost focus strategy by serving its narrow niche

markets at a lower cost and price than its rivals BMW/Mercedes- differentiation focus strategy catering to

its exclusive luxury clientele where superior quality andfeatures are offered and price is unimportant


15/16

GENERIC STRATEGIES

- Some other examples Cost Leadership- Nirma /Hindustan Lever detergents;Reliance/Nokia/Motorola mobiles; Toyota/Hyundai cars

Product/Service Differentiation- Rolex/Omega/ watches;Reid & Taylor/Raymond suits; Nike/Adidas/Reebok shoes;

BMW/Mercedes/Rolls Royce cars; Amway/Tupperware;Citibank/American Express; Yatra.com/Make My Trip. COM

Market/Niche Focus- Cross pens, Tanishq jewellery, Arrowshirts, specialty restaurants, Italian shoes, medical tourism,adventure sports travel agencies, Deziree non-sugar sweets

for diabetics


16/16

HYBRID STRATEGY- Best Cost Provider

Strategy/Toyota example Such a strategy was adopted for their Lexus cars range

By designing several high performance features to be comparable

in performance and luxury to BMW/Mercedes/Audi

Then transferring their low cost capabilities in making high qualityToyota models at lower cost than the luxury car makers

And then using its relatively lower manufacturing costs to offer

lower prices with comparable BMW/Mercedes models

Establishing a network of separate Lexus dealers dedicated toproviding personalized service to such niche market customers

Documents

IIPM Marketing Strategy 3b