Web Based_ Functional Strategies

7/28/2019 Web Based_ Functional Strategies

1/33

WEB BASED STRATEGIES

1Gagan Bhatia; Prof.Marketing


2/33

Web Site Strategies

Three Web site approaches Use to disseminate only product information Use as one of several important distribution

channels Use as exclusive channel to transact sales with

customers



3/33

Using the Internet toDisseminate Product Information

Approach Website used to provide productinformation of manufacturers or wholesalers

Informs end-users of location of retail stores

Avoids channel conflict with dealers Important where strong support of dealernetworks is essential



4/33

Approach Sell directly to consumers and Use traditional wholesale/retail channels

Strategic appeal Communicate with a company Shop for product information Make purchases Resolve customer service problems

Brick-and-Click Strategies:An Appealing Middle Ground Approach



5/33

Approach Use Internet as the exclusive channel for allbuyer-seller contact and transactions

Strategic issues for an online company Whether it will have a broad or narrow product offering

Whether to perform order fulfillment activities internally or tooutsource them

How it will draw traffic to its Web site and then convert pageviews into revenues

Strategies for Online Enterprises



6/33

FUNCTIONAL STRATEGIES



7/33

FUNCTIONAL STRATEGIES

EVERY BUSINESS UNIT DEVELOPS FUNCTIONAL STRATEGIES FOR EACH MAJOR

DEPARTMENT

MARKETING STRATEGY

FINANCIAL STRATEGY

RESEARCH & DEVELOPMENT STRATEGY

OPERATIONS STRATEGY

HUMAN RESOURCES STRATEGY



8/33

MARKETING STRATEGIES

Product Strategy New or existing product? for new or existing customers?

Promotion Strategy Push - spend Rs. on promotions and discounts to push products Pull - spend Rs. to build brand awareness so consumers will ask for it by

name Media selection

Channel or Place Strategy Distribute through dealer networks Sell directly to consumers through own stores or through internet

Price Strategy Skim pricing (high) when you are a pioneer Penetration pricing (low) builds market shares



9/33

FINANCIAL MANAGEMENT STRATEGIES

CAPITAL ACQUISITIONS

Debt Leverage, Stock Sales, & Gains from Operations Equity financing is preferred for related diversification Debt financing is preferred for unrelated diversification

RESOURCE ALLOCATIONS Dividends & Reinvestment

Reinvest earnings in fast-growing companies Keeping the stockholders contented with consistent dividends Use of stock splits ( or reverses) to maintain high stock prices



10/33

RESEARCH & DEVELOPMENT STRATEGIES

LEVEL OF INNOVATION Pioneer (Leader) v. Copy Cat (Follower)

Technological leadership fits well with differentiation A follower strategy makes sense with cost-leader strategies

Different types of R & D (basic, product, process) Where is the firms historic expertise / advantage? How competent are the R & D Personnel?



11/33

OPERATIONS STRATEGIES

MANUFACTURING LOCATION

Internal Production v. Outsourcing

Domestic Plants v. International Locations

SYSTEM LAYOUT Job Shops v. Mass Production Job shop/small batch production fits well with a differentiation

strategy Continuous production / dedicated transfer lines helps achieve

cost leadership Use of robots and CAD/CAM v. Labor intense manufacturing



12/33

LOGISTICS STRATEGIES

TYPE OF MATERIALS TRANSPORTED (Bulky or Compact?) Raw Materials, Supplies, & Components Finished Goods

BEST MODE OF TRANSPORTATION AIR RAIL TRUCK

OUTSOURCE TRANSPORTATION OR DO IT YOURSELF?



13/33

HUMAN RESOURCES STRATEGIES

TALENT ACQUISITION Recruit from Outside v. Internal Development Require experienced, highly- skilled workers v. we will train you Offer top wages & benefits v. mentoring and a career

WORK ARRNGEMENTS Timings Safety Pf, Gratuity, Bonuses

MOTIVATION & APPRAISAL Extrinsic v. Intrinsic Reward Systems Incentives for ideas & originality v. incentives for conformity?



14/33

STRATEGIES TO AVOID

DUMB STRATEGIES

FOLLOW THE LEADER We can do that toobut maybe its not worth copying

ARMS RACE Battles which increase costs and decrease revenues

DO EVERYTHINGOffering something for everyonetrying to please everyone

LOSING HAND

Pouring Rs. down the knotholeinvestment because of prior commitments

NONE OF THESE STRATEGIES WILL CREATE A SUSTAINABLE COMPETITIVE ADVANTAGE FOR THE FIRM



15/33

ORGANIZATIONAL STRUCTURE



16/33

Gagan Bhatia; Prof.Marketing 16

Organization Structure

Strategy is implemented through organizational structure.

The primary role of organizational structure and control is two fold :

a) to coordinate employees activities so that they work together

b) to motivate employees and provide them with the incentives

to achieve superior efficiency, quality, innovation or customerresponsiveness.


17/33


Types of Organizational Structure

Product Focused Structure

Market Focused Structure

Function Focused Structure

Virtual Structure


18/33

Product-Focused Organization

Head of Co./Div

Head MfgHead FinHead HRHead

Marketing

MarketingResearch

ProductManagement

ProductManager C

ProductManager B

ProductManager A

Support



19/33

Product- Focused Organization

Characteristics Classic brand management structure developed by P&G in 1930s Commonly used where different products use the same channels

of distribution Product Manager acts as a Mini -CEO

Product Manager has the ultimate responsibility for the brand

Assistant Product Manager is responsible for market and share forecasting,budgeting, coordinating with production, executing promotions, andpackaging



20/33

Product- Focused Organization

Examples of product focused organizations HUL P&G Dabur Maruti-Suzuki



21/33

Market-Focused Organization

Head of Co./Div

Head Mfg Head Fin Head HRHead

Marketing

MarketManager A

MarketManager 2

Marketmanager 3



22/33

Market- Focused Organization

Characteristics Useful when there are significant differences in buyer

behavior in the market segments Does not give managers full responsibility for the

services or products delivered



23/33

Market- Focused Organization

Examples of Market Focused Organization Cipla Thomas Cook Himalaya Ayurvedic



24/33

Function-Focused Organization

Head of

Co./Div

Head Mfg Head Fin Head HRHead

Marketing

Adv. Mgr ProductMarketingMarketService

MarketResearch

SalesPromotion

t



25/33

Function- Focused Organization

Characteristics Aligned by marketing functions A single manager is not responsible for day-to-day marketing

activities of the product Useful if company has few products



26/33

Function- Focused Organization

Examples of function focused MarketingOrganization

Google IOC (Oil Marketing) SMEs



27/33


Virtual Structure

The firm has farmed out its finance function to an outside

organization. While the finance function exists it is not a part

of the firm and hence it makes that part of the firm virtual.

CEO

MARKETING FINANCE OPERATIONS

VIRTUAL ORGANISATION


28/33


Virtual Structure

Both firms must be compatible in vision, business practices,language, employees background and profit perceptions.

Both firms must not be too dissimilar in size, as relative

importance is then sacrificed to browbeating by the big player. Business environment of the both must be transparent to the

extent possible.


29/33

Organizational Communication



30/33


Effective Communication

Use Direct Simple Words Avoid Words which can have Ambiguous Meaning

Use Face to Face Communication

Use Feedback

Listen with Understanding

Create Constructive Environment for the Expression of Ideas

Be Careful about your Non-verbal Communication


31/33


CommunicationFlow in an organization

UpwardDownward

Horizontal

Diagonal


32/33


Barriers to Effective Communication Assumptions

Poorly expressedmessage Loss by transmission andpoor retention Poor listening andpremature evaluation

Information overload

Selective perception Influence of attitude

Difference in status and power

between the sender and thereceiver.

Several levels in organization

hierarchy


33/33

THANK YOU

33Gagan Bhatia; Prof Marketing

Documents

Web Based_ Functional Strategies