Market-Oriented
Business Strategies
Chapters 1 - 3
Exhibit 1.3
Components of Strategy
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•
•
•
Scope
Goals and objectives
Resource deployments
Identification of sustainable
competitive advantage
• Synergy
Marketing Strategy = TM + Marketing Mix
Product
Place
•
•
•
•
•
• Numbers and types of
middlemen
• Locations/availability
• Inventory levels
• Transportation
Quality
• Style
Features
• Options
Brand name • Packaging
Guarantees/warranties
Services/spare parts
The target market
Price
Promotion
•
•
•
•
•
•
•
•
•
•
Discounts
Allowances
Credit terms
Payment period
Rental/lease
List price
Advertising
Personal selling
Sales promotion
Point-of-purchase
materials
• Publicity
Exhibit 1.10
Contents of a Marketing Plan
• Executive summary
– last thing you write, but most important
•
•
•
•
•
•
•
•
Current situation and trends
Performance review (details follow)
Objectives & Key issues
Marketing strategy
Action plans
Projected profit-and-loss statement
Controls
Contingency plans
See the ‘Intro to Cases’
link on website for class
specific details.
Exhibit 2.4
Common Performance Criteria and Measures
(1 of 3)
Performance criteria
Possible measures or indexes
•Growth
$ sales
Unit sales
Percent change in sales
•Competitive strength
Market share
Brand awareness
Brand preference
•Innovativeness
$ sales from new products
% of sales from product-market entries within
past five years
% cost savings from new processes
Exhibit 2.4
Common Performance Criteria and Measures
(2 of 3)
Performance criteria
Possible measures or indexes
•Profitability
$ profits
Profit as % of sales
Contribution margin
Return on investment (ROI)
Return on net assets (RONA)
Return on equity (ROE)
•Utilization of resources
Percent capacity utilization
Fixed assets as % of sales
•Contribution to owners
Earnings per share
Price/earnings ratio
Exhibit 2.4
Common Performance Criteria and Measures
(3 of 3)
Performance criteria
Possible measures or indexes
•Contribution to customers
Price relative to competitors
Product quality
Customer satisfaction
Customer retention
Customer loyalty
Customer lifetime value
•Contribution to employees Wage, rates, benefits
Personnel development, promotions
Employment stability, turnover
•Contribution to society
$ contributions to charities or community
institutions
Growth in employment
Exhibit 2.6
Alternative Corporate Growth Strategies
New
markets
Current
markets
Current products
New products
Market penetration strategies Product development
• Increase market share
strategies
• Increase product usage
•Increase frequency of use
•Increase quantity used
•New applications
• Product improvements
• Product-line extensions
• New products for same
market
Market development
strategies
Diversification strategies
• Expand markets for existing
products
•Geographic expansion
•Target new segments
• Vertical integration
Forward/backward integration
• Diversification into related
businesses (concentric)
• Diversification into unrelated
businesses (conglomerate)
Exhibit 3.2
Business-Unit Competitive Strategies
Differentiation
Cost leadership
Competitive strategy
Emphasis on new product-market growth
Heavy emphasis
No emphasis
Prospector
Analyzer
Defender
Reactor
Strong core biz
Maintaining a
differentiated
Related product
position in
Growth through market expansion
No clearly
mature markets
aggressive
defined productDifferentiated
pursuit of new
market
product-market
development or
opportunities
competitive
Strong core biz
Maintaining a
strategy
low-cost
Related product
position in
market expansion mature markets
Low-cost
See Exhibits 3.1 & 3.5 for additional detail.