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Copyright 2007 by South-Western, a division of Thomson Learning, Inc. All rights reserved.Developed by Cool Pictures and MultiMedia Presentations 1

Chapter Seven

Business

Marketing

Planning:

Strategic

Perspectives

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Introduction

Most of us believe that strategy is the province

of senior managers.

New growth strategies comes from new ideas

and new ideas comes from new voices.

Harnessing collective organizational efforts to

formulate strategies.

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Centered on customers

Take an outside-in view of strategy

Demonstrate an ability to sense markettrends ahead of their competitors

How large organizations like J&J, Motorola,

3M manage their numerous businessportfolios?

Marketings strategic role

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Hierarchy of Strategies

Corporate Strategy

What businesses are we in?

What are our core competencies?

How should we allocate resources?

What businesses shouldwe be in?

Role of marketing manager: as advocates of thecustomer to put the customer first in the firms

decision making

Business-Level Strategy

How do we compete in a given industry?

How should we position ourselves againstcompetitors?

Role of marketing: to provide a detailed analysis of customer

and competitors and firms distinctive skills and resources for

competing in a particular market segment

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GECEO Jack Welch example

Describe the global competitive environment in

which you operate?

In last 2 years what have your competitors

done?

In the same period, what have you done to them

in the market place?

How might they attach you in the future? What are the plans to leapfrog them?

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Functional Strategy

How can we allocate resources to most

efficiently and effectively support business-

level strategies?

Marketing manages organization-customer

connections

Marketing role: to allocate and coordinatemarketing resources and activities to achieve

the firms objective.

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Marketing: Perhaps Best Understood as:

1. Customer-product connectionlinking the

customer to the focal offering.

2.C

ustom

er-service delivery connectiondesign anddelivery actions involved in providing firms goods and

services. (CRM)

3. Customer-financial accountability connection--

Activities and processes that link customers tofinancial outcomes.( customer satisfaction &

profitability)

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Marketings Role in Managing Three CustomerConnections

Customer

Product Service Delivery Financial Accountability

Top Management

Operations

Human Resources,

Accounting

Accounting, Management

Information Systems

M

arketing,

Operations

HumanResou

rces

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Major business concept components tied together

by three important bridge elements: customerbenefits, configuration, and company boundaries.

CUSTOMER INTERFACE

Fulfillment & SupportInformation & Insight

Relationship DynamicsPricing Structure

CORE STRATEGY

Business MissionProduct/Market Scope

Basis for Differentiation

STRATEGICRESOURCES

Core CompetenciesStrategic Assets

Core Processes

VALUE NETWORK

SuppliersPartners

Coalitions

EFFICIENT / UNIQUE / FIT / PROFIT BOOSTERS

Components of business models

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Customer Interface

Fulfillmentand support

Informationand insight

Relationship

dynamics

Pricing

structure

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Core StrategyThree Elements

The business mission describes overall objective of

strategy, sets course of direction, and defines

performance criteria to measure progress.

Product/market scope defines where firm

competes.

Basis for differentiation captures essence of howfirm competes differently than its rivals do.

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Ways to differentiate products and

services

Provide superior service or technical assistance

competence through speed, responsiveness to

complex orders or ability to solve customers

problems Provide superior quality that reduces customer

cost or improve their performance

Offer innovative product features that use newtechnologies.

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Strategic Resources

Core competencies are set of skills, systems, and

technologies that creates uniquely high value for

customers.

Strategic

assets are more tangible requirements foradvantage. Strategic assets include brands, customer

data, distribution coverage, patents.

Core processes are methodologies and routines that

companies use to transform competencies, assets, and

other inputs into value for customers.

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Aligning Internal Business Processes to the Customer Strategy

Customer Strategy The Focus of Internal Business Processes

Operations Management Customer Relationship Management Innovation Management

Low Total Cost Strategy Highly Efficient Operating Ease of Customer Access Seek Process Innovations

Processes Superb Post-Sales Service Gain Scale Economies

Efficient, Timely Distribution

Product Leadership Flexible Manufacturing Capture Customer Ideas for Disciplined, High-Performance

Strategy Processes New Offering Product Development

Rapid Introduction of Educate Customers about Complex First-to-MarketNew Products New Products/Services

Complete Customer Deliver Broad Product/ Create Customized Solutions Identify New Opportunities

Solutions Strategy Service Line for Customers to Serve Customers

Create Network of Suppliers Build Strong Customer Anticipate Future Customer

for Extended Product/ Relationships Needs

Service Capabilities Develop Customer Knowledge

Lock-in Provide Capacity for Create Awareness Develop and EnhanceStrategies Proprietary Product/ Influence Switching Costs of Proprietary Product

Service Existing and Potential Increase Breadth/

Reliable Access and Customers Applications of Standard

Ease of Use

Source: Adapted from Robert S. Kaplan and David P. Norton, Strategy Maps: Converting Intangible Assets into Tangible Outcomes (Boston: HarvardBusiness School Publishing Corporation, 2004), pp. 322-344.

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Key value propositions

Low total cost- offer attractive prices, ease of purchase,

responsive services

Product innovation and leadership- Customer receive products that expand existing

performance boundaries through new features and

functions ( Intel, Sony)

Complete customer solutions- IBM Lock-in: purchasing a widely used proprietary product

from the firm. Ex: Microsoft operating system, eBays

exchange network

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Selfassessment exercise

1. In the hierarchy of

strategies, ____ strategy

defines the businesses in

which a company will compete,

preferably in a manner thatutilizes resources to convert

distinctive competence into

competitive advantage.

a. functional

b. corporate c. business-level

d. product

e. divisional

In the hierarchy of strategies,

____ strategy centers on how

a firm will compete in a given

industry and will position itself

against its competitors. a. functional

b. corporate

c. business-level

d. product

e. divisional

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A business concept or

modelconsists of the

following major

components except:

a. core strategy.

b. strategic resources.

c. customer interface.

d. value network e. negotiated outcomes.

Which of the following is

an element of the

customer interface?

a.R

elationship dynamics. b. Core processes.

c. Pricing structure.

d. All of the above.

e. (a) and (c) only.

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All of the following are

components of a firm's

value networkexcept:

a. suppliers. b. coalitions.

c. strategic alliance

partners.

d. customers.

Cisco and General

Electric demonstrate

special skills in forging

relationships with

suppliers and alliance

partners. This is an

example of:

a. a value network.

b. relationship dynamics

c. a strategic asset.

d.a market scope.

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Techniques for

differentiating products

and services include

which of the following?

a. Superior service or

technical assistance.

b. Superior quality.

c. Lowest price among

competitors.


e. Only a and b.

____ are the set of skills,

systems, and

technologies a company

uses to create uniquely

high value for customers.

a. Strategic assets

b. Core competencies

c. Core processes

d. Core strategies

e. Customer interfaces

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The three principal

drivers of organizational

learning and growth

include:

a. human capital.

b. information capital.

c. organizational capital.

d. All of the above. e. Only b and c.

Which of the following are

used in the Customer

Perspective of the

Balanced Scorecard to

measure core customer

outcome measures?

a. Market share.

b. Customer acquisition.

c. Customer retention.


e. Only b and c.

Documents

IM 9e pp CH07