CORPORATE STRATEGY

Define the Scope

& Mission of
the Business
Business
Objectives
Actions &
Resources
for Achieving
Objectives
“…in corporate planning and strategy…”

STRATEGY“ evaluation of the options …

interdependencies, investment and resources …
scenarios relevant to pursuing change or maintaining
position…”

CORPORATE PLANNING “systematic and collective

view… of the few most important things to get right …
on a portfolio / whole of business basis over a 3-5 year
horizon” The principal risk strategy for the organisation
should be embedded in the corporate plan.
 …in corporate planning…”
• interfacing risk management within corporate planning
• Preparation, objectives and targets
• forecasts and gap analysis
• SWOT and external environment
• alternative strategies (options) –selection and
evaluation
• action plans (including targets)
• metrics, monitoring and accountability
• which planning model to use? Argenti, DuPont,
Kaplan and Norton –choice of best fit for the style and
type of organisation
 “…in strategy…”

• risk information in selecting and considering strategies

• growth / aggressive strategies and defensive strategies
• product / service, market and “customer” strategies
• business model strategies (how best to organise to deliver
our services)
• social / environmental / community focused strategies
• portfolio options compared to one single strategy
• The risk implications of strategies need to be made explicit
–to characterise how risky the strategies are relative to gains
(services) being pursued.
 What is a strategic alliance?
• In this context, a strategic alliance is the "uniting of qualities
in a perceived relationship to gain an end-result."

• I define a strategic alliance as an agreement to utilize the

strengths of both companies (the strategy) to build a bridge for
customers to benefit (the end) through mutual partnership (the
perceived relationship).

• A winning strategic alliance creates a win for Company A, a

win for Company B, and a win for the customers of the
companies in alliance. An alliance may be a consortium, but
for the purposes of this discussion we will examine alliances
between two organizations.
•
 Successful strategic alliances are usually
comprised of the following features:
1. Clear benefit to both companies and customer.
2. Both companies increase the sale of (defined) products and
services.
3. Customers can clearly see who handles what (to eliminate
confusion).
4. Both partners increase their visibility and strengthen the
name of their company by forming the alliance.
5. The alliance represents a revenue flow to one or both
companies that would not otherwise occur.
6. The alliance represents an outsourced cost/revenue structure
in order to maximize a relationship, resource, or cost
through leveraging a partner's economies of scale and ability
to more successfully deliver the relationship, resource, or
cost structure.
The Triangle of Strategic Alliances
CORPORATE AND MARKETING
STRATEGIES
The Corporate &Marketing Strategy Process

Mission & Marketing

Objectives Positioning Strategy

Business Unit Analysis

Price Place Product Promo

Strategy for Each SBU

SBU 1 SBU 2 SBU 3
The Strategic Marketing Plan
Implementation

Marketing Situation Analysis

Control and Evaluation

Target Market Strategy of Performance
The Corporate Strategy Process

Mission &
Objectives

Business Unit
Analysis

Strategy for Each SBU

SBU 1 SBU 2 SBU 3
 Marketing’s Involvement

 Marketing Strategists are involved in the

Strategic Planning Process in 3 key ways ---

o PARTICIPATE IN STRATEGIC ANALYSIS

o SERVE WITH OTHER FUNCTIONAL MGRS.

AS SBU PLANNING TEAM MEMBERS

o DEVELOP & EXECUTE STRATEGIC MKTG PLANS

 The Marketing Strategy Process

Marketing Situation
Analysis
Target Market Strategy

Marketing Positioning Strategy

Price Product Promo Place +2

Strategic Marketing Plan Implementation

Control and Evaluation of Performance

Strategic Marketing Is:

o Strategically Analyzing Environmental,

Competitive and Internal Factors that
Impact Business Units,

o Including Forecasting Trends in Business

Areas of Importance.

o Participation in the Setting of Objectives

and Formulation of Corporate & Business
Unit Strategies
Strategic Marketing Is:

o Identifying Market Characteristics

(Analyzing & Understanding Them) and
Selecting Target Market and Positioning
Strategies for Each Product-Market.

o Develop Marketing Mix Strategies in Light

of Budget Constraints.
Strategic Marketing Pitfalls

o Too Myopic a View of The Business,

Competition, Need Being Satisfied, Buying
Unit, Use Applications.

o Try To Do: Too Much, Too Fast W/O Regard

To Competitor Actions/Reactions, Resources,
Timing, and Actual Risk..

o Weak, Unclear or No Mission/ Objectives/

Identity.
 The Strategic Marketing Plan

Planning Levels in a Multi-Business Company

Corporate
Strategic Business Unit
Plan Strategic
Strategic
Plan
Marketing Short Term
Plan (Tactical )
Marketing Plan
MARKETING STRATEGY PROCESS

Situation
Analysis

Implementing Designing
and Managing Marketing
Marketing Strategy
Strategy
Marketing
Program
Development
 Situation Assessment

Analysis of
Environmental Factors

Product-Market
Analysis

Analysis of Firm’s
Analysis of Key Resources and
Competitors Limitations
Identify Threats &
Opportunities
 Defining and Analyzing Markets

Define Product-Market Boundaries & Structures

Describe and Analyze End-User

Analyze Industry and Value Added System

Evaluate Key Competitors

Forecast Market Size and Growth Trends

 Illustrative Product-Market Structure
Food & beverages
•Generic Product Class
for breakfast meal

Cereals
•Product Type

•Variant A
Ready to eat
Regular
Natural •Variant B
Nutritional Pre-sweetened

Life Product 19 Special K •Brands

 Understanding Consumer &
Market Segmentation

Identifying and
Describing Buyers

Building DESCRIBING & How

Customer ANALYZING Buyers
Profiles END-USERS Make
Choices

Environmental
Influences
 Defining Industry Structure & Characteristics

Industry Form SUPPLIERS

Industry PRODUCERS
Environment

Competitive WHOLESALERS/
DISTRIBs Value
Forces
Added
RETAILERS/ System
DEALERS

CONSUMER/
ORG. END USERS
 Analyzing Competition
1. Define Industry Structure & Characteristics

5. Identify New 2. Identify &

Competitors PRODUCT- MARKET Describe Key
Competitors
STRUCTURE &
MARKET SEGMENTS

4. Anticipate
Actions by 3. Evaluate Key
Competitors Competitors
TM 3-8
 Evaluating Key Competitors

Extent of
Market Coverage

Current Competitor Customer

Capabilities Satisfaction
Evaluation

Past
Performance
 Signals that the Market is Changing

 Industry Boundaries Blurring and Evolving

 Competitive Structure and Players Changing

 Value Migration Paths

 Product Versus Business Design Competition

 Firms are Collaborating to Influence Industry

Standards
 Basic Strategies

• Overall Cost Leadership

• Differentiation Strategy

• Focus Strategy

• Middle of the Road Strategy

 Differentiation Strategies

A. Objective
• Incorporate differentiating features into product/service
offering which will cause buyers to prefer the company’s
product/service over the brands of rivals

B. Keys to Success
• Finding ways to differentiate that CREATE VALUE for buyers
and that are not easily copied or matched by rivals
• Having a distinctive competence (being able to do something
BETTER than rivals)
• Not spending more to differentiate than the price premium that
differentiation will command
Differentiation Strategies

• Successful differentiation allows a firm to:

* Command a premium price for its product and
or service

* Sell more units and service

* Gain greater buyer loyalty to its brand

 Focus and Niche Strategies

Objective:
• Do a much better job of serving niche members than
rival competitors

Keys to Success:

• Choosing a market niche where buyers have distinctive

preferences or requirements
• Developing a unique ability (as compared to rivals) to
serve the needs of the target buyer segment
 The BCG Matrix

??
High
High

G
R
O
W
T
H

R
A
T
E
Low
Low

High
High Low
Low

MARKET SHARE
 GE Planning Grid
Business Position
Strong Medium Weak

High Protect Position Invest to Build Build Selectively

Selectivity/ Limited
Medium Build Selectively Manage for Expansion or
Earnings Harvest
Protect and Manage for
Low Refocus Earnings
Divest

Strategies

Market Attractiveness
 Development (Growth) Strategies

Existing New
Products Products
Existing
Markets
1. Market 3. Product
Penetration Development

New Markets
2. Market Diversification
(Related or Unrelated
Development to Core Business)
 Forces Driving Industry Competition

Potential
Threat of New Entrants Entrants

Level of
Suppliers Industry Buyers
Rivalry
Bargaining Power of Suppliers Bargaining Power of Buyers

Substitutes

Threat of Substitute
Products
 Exit and Entry Barriers
Exit Barriers
Low High

Low
Low Returns Worse Case

Entry Barriers
Best Case High Returns
High
But Risky