Lecture:

2/13/18
Project Management – planning and
coordination (management function) of
resources towards fulfilling a target
(objectives)
Project – series of activities/work that has a
beginning and an end

2/20/18
Work Breakdown Structure (WBS) – a
deliverable oriented hierarchical decomposition
of work. Why?
1. To divide a complex work into tasks that
clean and defined
2. To assign responsibilities, resource
allocation, monitoring and controlling
3. For double checking of deliverable
Reports:
PRODUCT LIFE CYCLE STRATEGIES
Product Life Cycle
 Products have a limited life.
 Products sales pass through distinct
stages, each posing different
challenges, opportunities and problems
to the seller.
 Profits rise and fall at different stages of
the product life cycle.
 Products require different marketing,
financial, manufacturing, purchasing,
and human resource strategies in each
life – cycle stages.
 product life cycle is the course of a
product’s sales and profits over time.
product life cycle(PLC) deals with the
life of a product in the market with
respect to business or commercial costs
and sales measures.
 The five stages of each product lifecycle
are product development,
introduction, growth, maturity and
decline.
Product modification
- Trying to stimulate sales by modifying the
product’s characteristics through
Quality improvement: Aims at increasing the
product’s functional performance. Eg:
Aashirvaad, Annapoorna, Pillsbury,
Naturefresh
Feature improvement: Aims at adding new
features, such as size, weight, materials,
additives, and accessories, that expand the
product’s performance, versatility, safety, or
convenience.
Style improvement: Aims at increasing the
product’s esthetics appeal. Eg; New car
models, New Coke
Boston Consulting Group (BCG) Matrix
Growth–share matrix (the product portfolio
matrix, Boston Box, BCG-matrix, Boston
matrix, Boston Consulting Group analysis,
portfolio diagram)
 to help corporations to analyze their
business units, that is, their product
lines. This helps the company allocate
resources and is used as an analytical
tool in brand marketing, product
management, strategic management,
and portfolio analysis
BCG matrix (or growth-share matrix) is a
corporate planning tool, which is used to
portray firm’s brand portfolio or SBUs on a
quadrant along relative market share axis
(horizontal axis) and speed of market growth
(vertical axis) axis.
Growth-share matrix is a business tool, which
uses relative market share and industry growth
rate factors to evaluate the potential of
business brand portfolio and suggest further
investment strategies. 2 Dimensions:
 1. Relative market share. One of the
dimensions used to evaluate business
portfolio is relative market share. Higher
corporate’s market share results in
higher cash returns.
2. Market growth rate. is used as a
measure of a market’s attractiveness.
High market growth rate means higher
earnings and sometimes profits but it
also consumes lots of cash, which is
used as investment to stimulate further
growth.
Bcg matrix (There are four quadrants into
which the firm’s brands are classified)
Using the tool
Step 1. Choose the unit.
Step 2. Define the market.
Step 3. Calculate relative market share.
Step 4. Find out market growth rate.
Step 5. Draw the circles on a matrix.
Benefits of the matrix:
 Easy to perform;
 Helps to understand the strategic
positions of business portfolio;
 It’s a good starting point for further more
thorough analysis
What Is International Marketing? It’s just
marketing a product or service to consumers in
different countries.
Domestic vs. international marketing
Domestic - the production, promotion,
distribution, and sale of goods and services in
a local market; less risky and easier to
conduct; requires lesser financial resources;
deals with only a single market
International - the production, promotion,
distribution, and sale of goods and services in
a global market. (opposite of domestic *haha
emoticon*)
The Steps to an Effective International
Marketing Plan
1. Research. Determine the size of the
market for the product in each country to
which the company will expand. Learn
the laws governing business and
marketing in those countries.
2. Build the infrastructure. Companies
should build a robust infrastructure early
on to streamline the process of
international marketing.
3. Adapt the current marketing strategy.
While creating an international
marketing strategy is a lot of work, a lot
of the work has already been done for
the company’s domestic strategy
4. Localize the product and marketing
materials. This includes translating and
tailoring messages to appeal to new
demographics.
5. Re-evaluate and adapt. Just as
domestic markets are constantly
changing, so are international markets.
Different forms of marketing
1. Digital - Social Media
2. Traditional
International marketing environment
PEST Analysis - is a well-known and widely
applied tool when considering the external
nature of the domestic market.
POLITICAL - Is there any historical
relationship between countries that would
benefit or hinder international marketing?
- What is the influence of communities or
unions for trading?
- What kind of international and domestic
laws will your business encounter?
- What is the nature of politics in the
country that you are targeting, and what
is their view on encouraging foreign
competition from overseas?
Economic - What is the level of new industrial
growth?
- What is the impact of currency
fluctuations on exchange rates, and do
your home market and your new
international market – share a common
currency?
- There are of course the usual economic
indicators that one needs to be aware of
such as: Inflation, Gross Domestic
Product (GDP), levels of employment,
national income, the predisposition of
consumers to spend savings or to use
credit, as well as many others.
Socio-cultural - Culture, religion and society
are of huge importance.
Technology - Do copyright, intellectual
property laws or patents protect technology in
other countries?
- Does your technology conform to local
laws?
- Are technologies at different stages in
the Product Life Cycle (PLC) in various
countries?
Enterprise Resource Planning (ERP) - The
practice of consolidating an enterprise’s
planning, manufacturing, sales and marketing
efforts into one management system.1
Combines all databases across departments
into a single database that can be accessed by
all employees.2 ERP automates the tasks
involved in performing a business process.1
ERP Components
 Finance: modules for bookeeping and
making sure the bills are paid on time.
Examples: General ledger, Accounts
receivable, Accounts payable
 HR: software for handling personnel-
related tasks for corporate managers
and individual employees. Examples:
HR administration, Payroll, Self-service
HR
 Manufacturing and Logistics: A group
of applications for planning production,
taking orders and delivering products to
the customer. Examples: Production
planning, Materials management, Order
entry and processing, Warehouse
management
Who are the main ERP vendors?
(1) Baan (2) JD Edwards (3) Oracle (4)
PeopleSoft (5) SAP
Why ERP? 3 Major Reasons:
 To integrate financial data.
 To standardize manufacturing
processes.
 To standardize HR information.
ERP Project and Time
 Real transformational ERP efforts will
usually run between 1 to 3 years, on
average.
 Short implementations (3 to 6 months):
 The important thing is not to focus on
how long it will take but to understand
why you need ERP and how you will
use it to improve your business.
Total Cost of Ownership of ERP
Total cost of ownership (TCO) is a model
developed by Gartner Group to analyze the
direct and indirect costs of owning and using
hardware and software. TCO essentially helps
a company determine whether it wins or loses
from specific technology implementations.
It also found that: it took 8 months after the
system was in to see any benefits,
but that the median annual savings from the
system was $1.6 million per year.
Supply Chain Management - to share
information and management resources to
eliminate the waste of business processes as
much as possible, as one business process
beyond the walls of companies, organizations,
and divisions aiming for total optimization.
 it synchronizes demand with a business
unit as a whole by using materials/parts
and resource capacity such as
machines and workers and considering
constraints (bottlenecks) to increase the
flow from materials/parts supply to
product selling,
Customers and Suppliers may be internal
or external
Production Systems
 Push Systems - Produce in anticipation
of customer orders; Store raw material,
work in process, and finished goods
inventory
 Pull - Produce as needed; Minimal
storage; in short just in time system
Kaizen Costing - Continuous improvement;
reduce product costs; increase product quality;
improve production process; Stabilize profit
margin as price is reduced over the product life
cycle
Just-in-Time - Eliminate any process or
operation that does not add value
Lean Manufacturing
• Make only those items in demand by
customers
Theory of Constraints (TOC) - Flow of goods
through a production process cannot be at a
faster rate than the slowest bottleneck in the
process
 Constraint - anything that confines or
limits a person or machine’s ability to
perform a project or function
Economic Order Quantity (EOQ) - The least
costly number of units to order at a single time
Economic Production Run (EPR) - The least
costly number of units to produce during a
single production run
• Order Point
– triggers the placement of an
order for additional units
• Usage
– quantity of inventory used or sold
each day
• Lead Time
– days it takes from placement of
order to receipt or production of
goods
• Safety Stock
– inventory kept on hand to avoid
stockouts
Outsourcing - /contracting out
 - hiring a party outside a company to
perform services and create goods
that traditionally were performed in-
house by the company's own
employees and staff.
Insourcing
• Delegating a job to someone within the
company.
• more prevalent with manufacturing
companies that hire labor and services
from an external organization in order to
cut costs and decrease their tax burden.
Vertical Integration
• Merging companies at different stages
of production and/or distribution in the
same industry.
• expands its business operations into
different steps on the same production
path, such as when a manufacturer
owns its supplier and/or distributor.
• Single-source purchasing refers to
purchases from one selected supplier,
even though other suppliers provide
similar products.
• Single- or sole-supplier relationships
can be high risk, but reap big rewards.
Joint Ventures
• A business entity created by two or
more parties, generally characterized by
shared ownership, shared returns and
risks, and shared governance.
Virtual Enterprise
• temporary alliance of businesses that
come together to share skills or core
competencies and resources in order to
better respond to business
opportunities, and whose cooperation is
supported by computer networks.
• No physical presence
• Rely on Internet communication
Product Development (Research and
Development)
Steps in Development Process
1. Idea Generation. Product ideas may
come from external sources or internal
sources.
2. Screening of Ideas. This steps
chooses the best ideas resources,
objectives, demand, cost and above all,
profitability. Feasible ideas may be
considered for further study
3. Formal Business or Economic
Analysis. Objectives of this step are
further qualification of demand, risk,
investment, cost, and profitability.
4. Product Development. Product
engineering design is prepared,
prototype production, product testing,
process design, procuring patents and
 trademark. (“actual developed” product
is now produced)
5. Test Marketing. This is a commercial
experiment conducted in limited
geographic areas to ascertain product
feasibility (6months period)
6. Commercialization. The new product is
born and enters the product life cycle.
Product Development. The creation of
products with new or different characteristics
that offer new or additional benefits to the
customer.
Product development is undertaken:
To achieve stability in sales and profits.
To avoid possible maturity of an existing
product.
By reviving the interest of consumers on new
features.
Outsourcing is a business practice used by
companies to reduce costs or improve
efficiency by shifting tasks, operations, jobs or
processes to an external contracted third party
for a significant period of time. The functions
that are contracted out can be performed by
the third party either onsite or offsite of the
business.
Reasons to outsource:
 -to lower costs
 -improve efficiencies
 -gain speed.
Strategic alliances are an agreement
between two or more independent companies
to cooperate in the manufacturing,
development, or sale of products and services
or other business objectives.
Types:
1) A joint venture is established when the
parent companies establish a new child
company. For example, Company A and
Company B (parent companies) can
form a joint venture by creating
Company C (child company).
2) An equity strategic alliance is created
when one company purchases a certain
equity percentage of the other company.
If Company A purchases 40% of the
equity in Company B, an equity strategic
alliance would be formed.
3) A non-equity strategic alliance is created
when two or more companies sign a
contractual relationship to pool their
resources and capabilities together.
three different product life cycles:
Slow cycle
In a slow cycle, the company’s competitive
advantages are shielded for relatively long
periods of time. The pharmaceutical industry
operates in a slow product life cycle as the
products are not developed yearly and patents
last a long time.
Strategic alliances are formed to gain access
to a restricted market, maintain market stability
(setting product standards), and establishing a
franchise in a new market.
Standard cycle
In a standard cycle, the company launches a
new product every few years and may or may
not be able to maintain their leading position in
an industry.
Strategic alliances are formed to gain market
share, try to push out other companies, pool
resources for large capital projects, establish
economies of scale, and gain access to
complementary resources.
Fast cycle
In a fast cycle, the company’s competitive
advantages are not protected and companies
operating in a fast product lifecycle need to
constantly develop new products/services to
survive.
Strategic alliances are formed to speed up the
development of new goods or services, share
R&D expenses, streamline market penetration,
and overcome uncertainty.