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Dr.SR

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Sun Tzu Six

Strategic Principles

Win All Without Fighting

Avoid Strength, Attack Weakness

Deception and Foreknowledge Speed and Preparation

Shape Your Opponent

Character-Based Leadership

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Porters Model

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Porters Model

Competitive Advantage

Competitive

Scope

BroadTarget

Lower Cost

Narrow

Target

Differentiation

1. Cost Leadership 2. Differentiation

3A. Cost Focus 3B. Differentiation

Focus

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Porters Model

Competitive Advantage

Competitive

Scope

BroadTarget

Lower Cost

Narrow

Target

Differentiation

1. Cost Leadership 2. Differentiation

3A. Cost Focus 3B. DifferentiationFocus

VIDEOCON BOSE

PEPSINIKE JOGGER

REVLON

RELIANCE ROLEX

POLAROID

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Kotler Model(1996)

Market Leader

Market Challenger

Market Follower

Market Nicher

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Howard-ShethModel of Consumer

Behaviour

Problem

Recognition

Information

Search

Evaluation of

Alternatives

Purchase

Post-PurchaseEvaluation

Internal

Search

Memory

External

Search

Exposure

Attention

Comprehension

Acceptance

Retention

Stimuli:

MarketerDominated

& Other

Dissatisfaction Satisfaction

Environmental

Influences

Culture Social Class Personal

Family Situation

Individual

Differences

Resources Motivation &

Involvement

Knowledge Attitudes Personality, Values

& Lifestyle

INPUT INFORMATION PROCESSING DECISION PROCESS INFLUENCES

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Diversificatio

n

Market

Penetration

Market Development

Product Development

Existing Markets New Markets

Exi sting

Prod

ucts

NewProdu

cts

Ansoffs Matrix (Product/Market Matrix)

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Diversification -

related or unrelated

E.g. Realignments

of the marketingmix

E.g. Geographical

expansion

Same outlets and

sales strategy- new product

Existing Markets New Markets

Exi stingProducts

NewProducts

Ansoffs Matrix (Product/Market Matrix)

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1. Mission Statement

Firms long-term vision based on careful analysis of

benefits sought by present and potential customers

and analysis of existing and anticipated environmental

conditions

What business are we in and where are we going?

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2. SWOT Analysis

Strength, Weaknesses (internal)

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- What is an SBU?

An SBU is a strategic business unit.

An SBU has 3 distinct characteristics:

1. It is a single business that can be plannedindependently of other businesses.

2. It has its own competitors.

3. It has one manager with profit responsibility.

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BCG Product Portfolio Analysis

A. The Growth-Share Matrix

The Boston Consulting Group (BCG)developed a portfolio analysis method using

the growth/share matrix. The growth share matrix has four quadrants

within which SBUs are plotted.

The vertical axis shows market growth rate,

the horizontal axis shows relative marketshare.

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B. Portfolio Classification

1. Problem Child / Question Mark

* Low share high growth SBUs.

* Poor profit margins.

* Large cash requirements just to maintain their currentmkt share.

2. Star

* High growth high share SBUs.

* Need heavy investments to finance rapid growth. * May not generate enough cash to support own growth

needs.

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3. Cash Cow

* Low growth high share SBUs.

* Profitable products that help finance stars and problemchildren.

* Generates high amounts of cash. 4. Dog

* Low growth low share SBUs.

* Operates at a cost disadvantage, with few opportunities

for growth. * Not likely to be large sources of cash.

* Most businesses in this category.

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GE Multifactor Portfolio Matrix

The GE approach uses a matrix with 2 dimensions: a) Business Strength relative market share, price competitiveness,

product quality,customer knowledge, saleseffectiveness, geographic advantages,

. b) Industry Attractiveness

market size, market growth, industry profit margin,amount of competition, seasonality and cyclicality

of demand, industry cost and structure

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The GE grid is divided into three zones:

The upper left cells show strong SBUs in whichcompanies should invest and grow.

The lower right cells indicate SBUs low in

attractiveness which they should harvest ordivest.

The diagonal cells contain SBUs that aremedium in overall attractiveness.

The GE approach is a more subjective approachthan the BCG one.

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Boston Consulting Group Matrix

Boston Consulting Group Matrix

Relative Market Share

Market

Growth

Rate

(Percent)

High 20%

Medium 10%

Low 0%

High

10

Stars (II)

Question Marks (I)

Cash Cows (III)

Dogs (IV)

BCG Matrix

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The GE Business Screen

Competitive position

Low

Winner

Medium

High

Good

Competitive position1.Market share2.Technological KH3.Product quality4.Service network5.Price competitiveness6.Operating costs

Industry attractiveness1.Market growth

2

.

Market size.3.Capital requirement

4.Competitive

intensity

PoorMedium

Winner

Profit

producer

Winner

Averagebusiness

Loser

Questionmark

Loser

Loser

Industryg

rowthrate