2. Strategic Planning for Competitive Advantage
Transcript of 2. Strategic Planning for Competitive Advantage
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Concepts and Strategies
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Strategic Planning
The managerial process of
creating and maintaining a fit
between the organization’s
objectives and resources and
evolving market opportunities.
The goal is long-term
profitability and growth.
StrategicPlanning
StrategicPlanning
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Strategic Marketing Management
What is the organization’s main activity?
How will it reach its goals?
THE ANSWER IS A MARKETING PLAN.
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Strategic Planning
A written document that acts as a
guidebook of marketing activities
for the marketing manager.
Marketing PlanMarketing Plan
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Why Write a Marketing Plan?
Provides a basis for comparison of actual and expected performance
Provides clearly stated activities to work toward common goals
Serves as a reference for the success of future activities
Provides an examination of the marketing environment
Allows entry into the marketplace with awareness
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Marketing PlanElements
Marketing Strategy
Product Distribution
Price
Marketing Mix
Business Mission Statement
Objectives
Situation or SWOT Analysis
Target Market Strategy
ImplementationEvaluation
Control
Promotion
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The Importance of Strategic Marketing
WhatWhatWhatWhat
WhyWhyWhyWhy
HowHowHowHow
Strategic PlanningStrategic PlanningStrategic PlanningStrategic Planning
Long-term profitability and growthLong-term profitability and growthLong-term profitability and growthLong-term profitability and growth
Write a marketing planWrite a marketing planWrite a marketing planWrite a marketing plan
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Defining the Business Mission
Answers the question, “What business are we in?”
Focuses on the consumers & market(s) rather than the good or service
Strategic Business Units (SBUs) may also have a mission statement
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AMA’s Mission Statement
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Q: What business are we in?
A: Business mission statement
Too narrowToo broadJust right
marketing myopiano directionfocus on marketsserved and benefitscustomers seek
Business Mission Statement
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Marketing Objective
A statement of what is to
be accomplished through
marketing activities.
Marketing Objective
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Marketing Objectives Realistic
Measurable
Time specific
Consistent with and indicate the organization’s priorities“Our objective is to achieve 10 percent dollar market share in the cat food market within 12
months of product introduction.”
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Criteria for Good Marketing Objectives
Realistic, measurable, and time-specific objectives Realistic, measurable, and time-specific objectives consistent with the firm’s objectives:consistent with the firm’s objectives:
1. Communicate marketing management philosophy
2. Provide management direction
3. Motivate employees
4. Force executives to think clearly
5. Allow for better evaluation of results
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SWOT Analysis
Identifying
internal strengths (S)
and weaknesses (W)
and also examining
external opportunities (O)
and threats (T)
SWOT AnalysisSWOT Analysis
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BASIS OF MARKETING PLAN
SITUATION ANALYSIS
SWOT AnalysisEnvironmental Scanning
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SWOT Analysis
©South-Western College Publishing
SSWWOOTT
Things the company does well.Things the company does well.
Things the company does not do well.Things the company does not do well.
Conditions in the external environment that favor strengths.Conditions in the external environment that favor strengths.
Conditions in the external environment that do not relate to existing strengths or favor areas of current weakness.
Conditions in the external environment that do not relate to existing strengths or favor areas of current weakness.
InternalInternal
ExternalExternal
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Environmental Scanning
The collection and
interpretation of information
about forces, events, and
relationships in the external
environment that may affect the
future of the organization or the
implementation of the
marketing plan.
EnvironmentalScanning
EnvironmentalScanning
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Components of a Situation Analysis
production costs
marketing skills
financial resources
image
technology
Strengths
Weaknesses
INT
ER
NA
LIN
TE
RN
AL
EN
VIR
ON
ME
NT
EN
VIR
ON
ME
NT
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COMPETITIVE ADVANTAGE
What are the sources of competitive advantage?
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Competitive Advantage
CompetitiveAdvantage
CompetitiveAdvantage
The set of unique features of a
company and its products that
are perceived by the target
market as significant and
superior to the competition.
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Competitive Advantage
Niche StrategiesNiche Strategies
CostCost
Product/Service Differentiation
Product/Service Differentiation
Types of Types of Competitive Competitive AdvantageAdvantage
Types of Types of Competitive Competitive AdvantageAdvantage
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Cost Competitive Advantage
Cost Competitive Advantage
Cost Competitive Advantage
Being the low-cost
competitor in an industry
while maintaining
satisfactory profit
margins.
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Cost Competitive Advantage Obtain inexpensive raw
materials
Create efficient plant operations
Design products for ease of manufacture
Control overhead costs
Avoid marginal customers
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Sources of Cost Reduction
Experience CurvesExperience Curves
Efficient LaborEfficient Labor
No-frills ProductsNo-frills Products
Government SubsidiesGovernment Subsidies
Product DesignProduct Design
ReengineeringReengineering
Production InnovationsProduction Innovations
New Service Delivery Methods
New Service Delivery Methods
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Product/Service Differentiation
Product/ServiceDifferentiation Competitive Advantage
Product/ServiceDifferentiation Competitive Advantage
The provision of
something that is unique
and valuable to buyers
beyond simply offering a
lower price than the
competition’s.
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Examples of Product/Service Differentiation
Brand names
Strong dealer network
Product reliability
Image
Service
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Niche Competitive Advantage
Niche Competitive Advantage
Niche Competitive Advantage
The advantage achieved
when a firm seeks to
target and effectively
serve a small segment of
the market.
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Niche Competitive Advantage
Used by small companies with limited resources
May be used in a limited geographic market
Product line may be focused on a specific product category
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Sources of Sustainable Competitive Advantage
PatentsPatents
CopyrightsCopyrights
LocationsLocations
EquipmentEquipment
TechnologyTechnology
Customer ServiceCustomer Service
PromotionPromotion
Skills and AssetsSkills and Assetsof anof an
OrganizationOrganization
Skills and AssetsSkills and Assetsof anof an
OrganizationOrganization
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Sources of Competitive Advantage
Sources ofSources ofCompetitive AdvantageCompetitive Advantage
Sources ofSources ofCompetitive AdvantageCompetitive Advantage
Cost$
Cost$
Product/ServiceDifferentiationA vs. B vs. C
Product/ServiceDifferentiationA vs. B vs. C
NicheStrategies
NicheStrategies
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Strategic Directions
What are the alternative marketing strategies?
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Strategic AlternativesMarket
Penetration
MarketDevelopment
Product Development
Diversification
Increase market share among existing customers
Attract new customers to existing products
Introduce new products into new markets
Create new products for present markets
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Ansoff’s Strategic Opportunity Matrix
Present Product New Product
New Market
MarketPenetration
MarketDevelopment
ProductDevelopment
Diversification
Present Market
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Portfolio Matrix
Stars
Cash Cows
ProblemChildren
Dogs
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Portfolio Matrix Strategies
Build
Hold
Harvest
Divest
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Strategic Alternatives
Identify strategic alternativesIdentify strategic alternatives
Diversification =
Product development = products
Market development = customers
Market penetration = share
new products +new markets
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Marketing Strategy
The activities of selecting and
describing one or more target
markets and developing and
maintaining a market mix that
will produce mutually satisfying
exchanges with target markets.
MarketingStrategy
MarketingStrategy
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WHAT IS A TARGET MARKET?
Marketing StrategyTarget Market Strategy
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Target Market Strategy
Segment the market based on groups with similar characteristics
Analyze the market based on attractiveness of market segments
Select one or more target markets
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Target Market Strategy: How To
Appeal to the ENTIRE market with one marketing mix
Appeal to the ENTIRE market with one marketing mix
Concentrate on ONE marketing segment
Concentrate on ONE marketing segment
Appeal to MULTIPLE marketswith multiple marketing mixes
Appeal to MULTIPLE marketswith multiple marketing mixes
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Target Market Strategies
Entire Market Multiple Markets Single Market
Target Market Options
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MARKETING MIX
What are the elements of the Marketing Mix?
The 4 P’sProduct – Promotion
Price - Place
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The Marketing Mix
A unique blend of product,
distribution, promotion, and
pricing strategies designed to
produce mutually satisfying
exchanges with a target market.
Marketing MixMarketing Mix
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Marketing Mix: The “Four Ps”
Price
Promotion
Place
Product
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Marketing Mix: The “Four Ps”
The starting point of the “4 Ps”
Includes Physical unit Package Warranty Service Brand Image Value
Product
Products can be… Tangible goods Ideas Services
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Marketing Mix: The “Four Ps”
Product availability where and when customers want them
All activities from raw materials to finished products
Ensure products arrive in usable condition at designated places when needed
Place
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Marketing Mix: The “Four Ps”
Promotion
Online
Role is to bring about exchanges with target markets by: Informing Educating Persuading Reminding
Includes integration of: Personal selling Advertising Sales promotion Public relations
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Marketing Mix: The “Four Ps”
Price Price is what a buyer must
give up to obtain a product.
The most flexible of the “4 Ps”-- quickest to change
Competitive weapon
Price x Units Sold = Total Revenue
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Elements of the Marketing Mix
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Managing the Marketing Planning Process
IMPLEMENTATIONEVALUATION
CONTROL
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Following Up on the Marketing Plan
Implementation
Evaluation
Control
Marketing audit is… Comprehensive Systematic Independent Periodic
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The Marketing Audit
ComprehensiveSystematic
IndependentPeriodic
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Implementation, Evaluation, and Control
Product PlacePromotionPrice
Product PlacePromotionPrice
Met objectives?
Met objectives?
Implementation Evaluation
Audits• comprehensive• systematic• independent• periodic
Audits• comprehensive• systematic• independent• periodic