Market-Based Management
Chapter 11, 12, 13
Portfolio Analysis and
Strategic Market Planning
Figure 11-1 Product Life Cycles of
Two Product Portfolios
Which would you rather have?
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Figure 11-6 Product Life Cycle/Share
Development Portfolio
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Factors Impacting Mkt Attractiveness
•
Market Forces


•

Competitive Environment


•
Market size
Growth rate
Buyer power

Number of competitors
Price rivalry
Ease of entry
Market Access



Customer familiarity
Channel access
Sales requirements
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Competitive Position Influences
•
Differentiation position


•

Cost Position


•
Product quality
Service quality
Brand image

Unit cost
Transaction cost
Marketing expenses
Marketing Position



Market share
Brand awareness
Distribution
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Portfolio analysis
•
An evaluation of a business, product, or market
with respect to market attractiveness and
competitive position as an aid in identifying
strategic plans.
•
Offensive portfolio strategy


•

Invest to grow
Improve position
New market entry
Defensive portfolio strategy



Hold/protect share position
Optimize/monetize position
Harvest/divest share position
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Product Life Cycle and Offensive
and Defensive Strategies
Figure 12-2 Market Growth and Offensive and Defensive Strategies
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Portfolio Analysis and
Strategic Market Plans
Figure 12-3 Portfolio Analysis and Strategic Market Plans
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Core Offensive Strategies
Core Strategy 1
Core Strategy 2
Core Strategy 3
Invest to grow
sales
Invest to improve
competitive
position
Invest to enter
new markets
Grow in
Existing
Markets
Improve
Margins
Diversified
Growth
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Offensive Core Strategy 1:
Invest to Grow Sales
Sub Strategy A
Grow Market
Share
Sub Strategy C
Enter New Market
Segment
Sub Strategy B
Grow Revenue
Per Customer
Sub Strategy D
Expand Market
Demand
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Offensive Core Strategy 2:
Invest to Improve Competitive Position
Sub Strategy A
Improve
Customer Loyalty
Sub Strategy B
Improve
Differentiation
Advantage
Sub Strategy C
Sub Strategy D
Lower Costs/Improve
Marketing Productivity
Build Marketing
Advantage
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Offensive Core Strategy 3:
Invest to Enter New Markets
Sub Strategy A
Enter Related
New Markets
Sub Strategy B
Enter Unrelated New
Markets
Sub Strategy C
Sub Strategy D
Enter New Emerging
Markets
Develop New
Markets
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Selecting an Offensive Strategy
• Why enter new markets?
 New
source of growth
 Smoother performance
 Diversification and reduced vulnerability
• Why invest to grow sales?
• Why improve competitive position?
 Achieve
price premiums
 Customer retention
 Improve margins and NMC
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Defensive Strategies
Figure 13-3 Strategic Market Plans and Performance
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Defensive Strategic Market Plans
• What are the
•
main
objectives of
defensive
strategies?
When are
defensive
market plans
employed?
Figure 13-5 Portfolio Positions
and Defensive Strategic Market Plans
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Core Defensive Strategies
Core Strategy 1
Core Strategy 2
Core Strategy 3
Protect Position
Optimize Position
Monetize,
Harvest, or Divest
Maintain Sales
Maximize
Profits
Cash Flow
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Defensive Core Strategy 1:
Invest to Protect Position
Sub Strategy A
Protect Market
Share
Sub Strategy B
Build Customer
Retention
1. Protect position in growth
markets
2. Protect a high-share position
3. Protect a follower share position
4. Protect a niche share position
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Protecting Follower Share Position
Figure 13-8 Market Structure and Share Position
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Defensive Core Strategy 2:
Optimize Position
Sub Strategy A
Maximize Net
Marketing
Contribution
Sub Strategy B
Selective
Market Focus
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Defensive Core Strategy 2:
Optimize Position
Figure 13-14 Profit Life
Cycle and
Components of
Marketing Profitability
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Defensive Core Strategy 3:
Monetize, Harvest, or Divest
Sub Strategy A
Sub Strategy B
Manage for Cash
Flow
Harvest-Divest for
Cash Flow
1. Harvest Price Strategy
2. Harvest Marketing Resource
Strategy
3. Divest Market Strategy
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Defensive Core Strategy 3:
Monetize, Harvest, or Divest
Figure 13-17 Harvest Price Strategy
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Break Time
10 minutes
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