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Summary - Strategic market management
1.1 What is a business strategy?
A business is generally an organizational unit that has a distinct business strategy and a manager with sales and profit responsibility.
Four dimensions define a business strategy:
1. The product market investment strategy; where to compete
The scope of a business is defined by the product it offers, the market it serves, the competitors it competes with and by its level of vertical integration.
The investment pattern will determine the future direction of the firm, conceptual choices:
- invest to grow
- invest only to maintain the existing position
- milk the business by minimizing investment
- recover as many assets as possible by liquidating or divesting the business
2. The customer value proposition; how to compete
CVP is the perceived functional, emotional, social, or self-expressive benefit that is provided by the organization’s offering. To support a successful strategy, the proposition should be sustainable over time and differentiate the offering from its competitors.
3. Assets an competencies; how to compete
The strategic assets or competencies that underlie the strategy provide the sustainable competitive advantage (SCA). A strategic competency is what a business unit does exceptionally well which has strategic importance to the business. A strategic asset is a resource which is strong relative to that of competitors.
Strategic formulation must consider the cost and feasibility of generating or maintaining assets or competencies that will provide the basis for a SCA.
4. Functional strategies and programmes; how to compete
Functional strategies or programmes that could drive the business strategy include: manufacturing strategy, distribution strategy, brand-building strategy, communication strategy and so on.
What is a business strategy?Long term business planning, typically a period of 3-5 years.
Consist of where to compete?
Geograpically Coca cola competes in the US, Mexico
How to compete?
Assets and competences,
Coca cola has a mass marketing strategy.
What is the product market investment strategy?Invest to grow,
Invest to maintain position
Milk the business by minimising investments
Recover as many as assets as posible by liquidating the business
What is a customer value proposition?The total of benefits which a vendor promises a customer in return for the customers payment
Name three examples of a customer value proposition?1. A goof value- aldi
2. Global presitge louis vuitton
3.Product line breadth Gilette
What is a manufacturing strategy?Manufacturers must deal with global challenges such as increasing customer expectation and lower cost competitors
What is a distribution strategy?Making a product or service available to the consumer either directly or indirectly.
Name one example of an distribution strategyMaking cocaine available tot the consumer from mexico(production)
What is a communication strategy?Designed to help you and your company communicate effectively and meet core organisational objectives.
What is a information technology strategy?Overall plan of objectives and principles relate to use of technology.
What is a global strategy?An organizations guide to globalization
Name one example of a global strategyMc Donalds for example, anywhere mc donalds goes it ensures it offers products that will appeal to the locals the most, F.E. In India they only eat Vegetarian or chicken products.
What is a segmentation strategy?The process of dividing the market into subgroups of similar customers.
Name one example of an segmentation strategyMarket--) Cars,
Market segmentation: Families, Singles.
Market segment Families-Flexible, safety, Singles- Young, style, more disposable income).
Target market:Families or Singles.
What is the criteria to select a business strategy?1. Is the return on investment (ROI) attractive?
2. Is the strategy feasible?
3. Will the strategy fit with the other strategies of the firm?
4.Is there a Sustainable compatible advantage?
What is the ROI?Return on investment
How do you calculate the ROI?ROI= Net profit/ Total investment*100%
If martha bought an Ipad voor 500 euro's and she sells it for 300 Euros what is then her ROI?ROI is Net profit/Total investment*100%
500-300=200 is the net profit
500= total investment
What is the SCA(sustainable competititve advantage?A company needs a competitive advantage to protect them from going bankrupt(recession), It prevents competitors to take the advantage of a company.
Name three examples of a SCA1. PAtent (to protect the brand
2. Monopoly- Free to set their own prices
3. Switching- Not handy, difficult (windows- apple)
What is an external analysis?1. Customer analysis
2. Competitor analysis
3.. Environmental analysis
4. market analysis
5. Environmental analysis
What is an Internal analyis?Performance analysis
Determants of strategic options
What consist in a strategic analysis?Internal/external analysis
Name the strategic optionsInnovation
What are the trends in strategies?External market orientation
Why strategic management?Precipate(neerslaan) the consideration of strategic choices
Force a long range view
Help a business cope with change
Provide both horizontal and vertical communication systems
What is a pro-active company?Forward thinking strategy planning
What is a reactive company?Deal with problems as they arise, approach opportunities as they arise
What are strategic uncertainties?What will be the sales profile of hybrids in the upcoming years?
How many will be sold?
What will be the direct competitors?
What will be the future deman?
Name two strategic decisions?Investment in product management
Investment in technology
What is a customer analysis?Who are the biggest customers?
How could the market be segmented in groups?
What are the customer motivations/objectives
What are the customers unmet needs?
What is the 5 W model?Who, What, When, Where, WHy
How should segments be defined?-Price sensitivity
What are customer characteristics?Geographic
What are product related approaches?Price sensitivity
What is a customer motivation analysis?Indentify motivations
2. Asses motivation
3. Assign strategic roles to motivations
What is the customer as an active partner?- Encourage active dialogue
-Current, potential competitors
What is a competitor analyis?Identifying current/potential competitors
What are the two ways of identifying current competitors:The customer based approach
In strategic groups
What is a strategic group?A group that has similar competitive strategies
Have similar characteristics
Have similar assets and competences
How do potential competitors emerge?Through
Backward and forward integration
What is the checklist for a SWOT?manufacturing
How can you obtain information on competitors?Company website
Search engines on the internet
What makes a competitor vulnerable?-Marketing factors-low market share
-Financial factors: High cost
- Product/market factors: slow/poor growth
-Managerial factors, inflexibility, loosing touch with customers
What are the dimensions of a market analysis?-Emerging submarkets
-Trends and development
-Key succes factors
What are the porters 5 forces?Threat of new entrants
Threat of substitute products
Bargaining power of suppliers
Bargaining power of customers
Rivalry of competitors
E-Business and high profitability ? What is the key?The key is product differentiation,
For example google to dominate the web search
What is it when we talk about the boiled frog?Dramatically changing environment
What are the three ways to react on a dramatically changing environment?To ignore what is happening
To respond quickly or slowly but reactively
To try to predict the nature of the changes and then manage them proactively.
What is the PESTLE/DESTEP?D-demographic-