Topic 5 :Strategy Determination

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Presentation transcript:

Topic 5 :Strategy Determination Strategic vision defined Customer value Strategies for growth Options for market entry Driving forces of internationalisation Vicious or virtuous spirals Using retailing as an example

Defining the Business You are In ? e.g. retailing Horticulture - selling plants and related products Providing a comprehensive gardening serv Making gardening easier Filling people’s disposable time Entertainment/leisure Fulfilling people’s dreams!

MICHAEL PORTER’S Value Chain

Customer Driven Value System Consumers Needs Demographic Socio-economic Geographic Lifestyles Context Occasions Save money Be exclusive Save time Find solutions Save effort Have fun VALUE NEEDED Resources Solutions Buying Human resources Skills/creativity Technology Information Property Product range Prices Product quality Service levels Ambiance Locations VALUE PROVIDED Financial Customer Promotion Market share Profits Share price Satisfaction Loyalty Word of mouth Adverts/PR Internet Brand image VALUE COMMUNICATED

Product-Market Matrix Existing Related New Markets Consolidation Penetration Product improvements Market-led expansion Existing New market segments New ranges Assortment manipulation New services New outlet types Growth Related New Products Diversification New (unrelated) product categories Adapted from: Ansoff , Knee and Walters, McDowell Mudambi .

International expansion Existing proposition Exploring Strategic Space Maximum viable share New products/ services New segments Grow market share Different segments Adjacent segments Unrelated products/ services Related products/ services Existing market segment(s), assortments, trading areas, formats and channels National expansion Modification of format International expansion Different format New formats Linked channel Geographical development Separate channel New channels

Retail Value Chain (A process-oriented view of value) Firm infrastructure Human resources Margin Technology development Procurement Supply chain Store locations and design Marketing and promotion Store operations Service Margin (A process-oriented view of value) Adapted from: Porter ; McGee.

Motives for Acquisitions & Mergers Diversification e.g., Kingfisher Group Defensive e.g., Carrefour and Promodes Market Share/ Economies of Scale e.g., Morrisons - Safeway Co-op Group - Somerfield Synergy/ Skills Transfer e.g., Habitat and Mothercare Alternative Channel Development e.g., Next – Grattan Internationalization e.g., Wal-Mart – Asda Why do firms divest?

Driving Forces of Internationalisation

Options for International Market Entry