Strategy

Strategy

❚ The alignment of your processes,

resources, and organizational
structure to maximize benefits to
various stakeholders
Strategy

❚ Stakeholders
❙ stockholders
❙ customers
❙ employees
❙ suppliers
Strategy

❚ Processes
❚ Identifying and reengineering work
flows
❚ TQM and just-in-time inventory
systems
❚ Building bridges through the use of
cross-functional teams
Strategy

❚ Resources
❚ Capital
❚ Labor
❚ Materials
❚ Machines
❚ Information
❚ Facilities
Strategy

❚ Organizational Structure

❚ Functional structure
❚ Product/brand management
structure
❚ Matrix structure
❚ Etc.
Functional Approach

Departments based on similar skills and

resource use.

CEO

VP VP VP
Finance Production Marketing
 PRODUCT MANAGER
ORGANIZATION

M a r k e t in g v ic e - p r e s id e n t / d ir e c t o r

M a r k e t in g R e s e a r c h S a le s A d v e r t is in g G ro u p P ro d u c t
M a n a g e rs

P ro d u c t M a n a g e r P ro d u c t M a n a g e r P ro d u c t M a n a g e r
P ro d u c t A P ro d u c t B P ro d u c t C
 Matrix Organization
Engineering Production Marketing Quality
Manager Manager Manager Manager
737
Project Mgr
747
Project Mgr
757
Project Mgr
767
Project Mgr
Strategy

❚ Corporate strategy

❚ Business-unit strategy

❚ Functional strategy (product-market

entry)
❙ Marketing plans and strategies primarily
focus on this level
Strategic business units

❚ Strategic business unit:

❚ An entity that can be separated for
planning purposes
❚ Has its own set of customers
❚ Has its own set of competitors
❚ Has a manager who is responsible
for the unit
Corporate Strategy

❚ Mission

❚ Product-oriented vs. market-oriented

❚ Functions to be performed

❚ Social responsibility issues

Corporate Strategy

❚ Corporate objectives
❚ Profitability
❙ ROI
❙ Return on shareholder’s equity
❙ $ profit
❙ etc.
❚ Discounted cash flow
❚ Market share
❚ Etc.
Corporate Development
Strategy

Market Product
Current Markets Penetration Development

New Markets Market Diversification

Development

Current New
Products Products
Corporate Strategy
❚ Corporate development strategy
❚ Market penetration
❚ Market development
❚ Product development
❚ Diversification
❙ forward integration
❙ backward integration
❙ related (concentric) diversification
❙ unrelated (conglomerate) diversification
Corporate Strategy

❚ Resource allocation

❚ Boston Consulting Group model (Boyd,

Walker & Larreche, pp. 41, 42)

❚ Industry attractiveness -- business

position matrix (General Electric
model) (Boyd, Walker & Larreche, p. 44)
BCG Matrix

Market Question
Stars Marks
Growth
Rate
Cash Dogs
Cows

Relative Market Share

Industry Attractiveness—
Business Position Matrix
Competitive position

High 1 1 2

Medium 1 2 3

Low 2 3 3

High Medium Low

Industry Attractiveness
Strategic business units

❚ Strategy formulation
(Porter’s typology)
❚ Overall cost leadership
❙ broad focus
❙ narrow focus

❚ Differentiation
❙ broad focus
❙ narrow focus
Porter’s Typology

Cost Leadership

Differentiation

Narrow Broad Focus

Focus
Functional (product-market)
strategy:
The marketing mix (4Ps)

❚ Product
❚ Price
❚ Place
❚ Promotion
❙ advertising
❙ personal selling
❙ sales promotion
❙ publicity
Value creation & delivery

❚ Choose the value

❚ Provide the value

❚ Communicate the value

Value creation & delivery

❚ Choose the value

❚ Segmentation

❚ Targeting

❚ Positioning
Value creation & delivery

❚ Provide the value

❚ Product & service development
❚ Pricing
❚ Sourcing
❚ Manufacturing
❚ Distributing
❚ Servicing
Value creation & delivery

❚ Communicate the value

❚ Sales force
❚ Sales promotion
❚ Advertising
❚ Publicity