McGraw-Hill/Irwin Copyright © 2009 by The McGraw-Hill Companies, Inc. All Rights Reserved.

TODAY’S ORGANIZATIONS STRUCTURE—CORPORATE LO1 Corporate Level Chief Marketing Officer (CMO) Cammie Dunaway Yahoo! Eduardo Conrado Motorola Networks Leslie Short FUBU 2-2

Strategic Business Unit (SBU) Level The strategic business unit (SBU) level is the level in an organization where managers set a more specific strategic direction for their businesses to exploit value creating opportunities. 2-3

TODAY’S ORGANIZATIONS STRUCTURE—SBU LO1 Strategic Business Unit (SBU) Strategic Business Unit (SBU) Level GE Commercial Finance (business loans, leases) GE Industrial (appliances, lighting, factory automation) GE Money (consumer home loans, credit cards) GE Healthcare (imaging, diagnostics, life-support systems) GE Infrastructure (aircraft engines, energy, transportation) GE NBC Universal (television, music, film) 2-4

Strategic Business Unit (SBU) A strategic business unit (SBU) is a subsidiary, division, or unit of an organization that markets a set of related offerings to a clearly-defined group of customers. 2-5

TODAY’S ORGANIZATIONS STRUCTURE—FUNCTIONAL LO1 Functional Level Department Cross-Functional Teams 2-6

FIGURE 2-1 The board of directors oversees the three levels of strategy in organizations: corporate, business unit, and functional 2-7

FIGURE 2-2 Visionary organizations: (1) establish a foundation, (2) set a direction, and (3) create strategies 2-8

STRATEGY IN VISIONARY ORGANIZATIONS FOUNDATION (WHY) LO2 Core Values Nike- to experience the emotion of competition, winning and crushing competitors Mission or Vision Organizational Culture 2-9

Star Trek Enterprise Why is a mission statement important? 2-10

STRATEGY IN VISIONARY ORGANIZATIONS DIRECTION (WHAT) LO2 Business What do we do? What business are we really in? 2-11

STRATEGY IN VISIONARY ORGANIZATIONS DIRECTION (WHAT) LO2 Goals or Objectives: S.M.A.R.T Specific Measurable Attainable Relevant Time-based 2-12

STRATEGY IN VISIONARY ORGANIZATIONS DIRECTION (WHAT) LO2 Goals or Objectives: Types Profit Customer Satisfaction Sales ($ or #) Employee Welfare Market Share Social Responsibility Quality Efficiency 2-13

SETTING STRATEGIC DIRECTIONS WHERE ARE WE NOW? LO3 Competencies (capabilities, skills, technologies and resources that distinguish us from other organization Competitive Advantage Fast Cycle Time Quality Benchmarking 2-14

SETTING STRATEGIC DIRECTIONS WHERE ARE WE NOW? LO3 Customers Competitors 2-15

SETTING STRATEGIC DIRECTIONS WHERE DO WE WANT TO GO? SBU Evaluation LO3 Business Portfolio Analysis (BCG) Market Growth Rate Stars Cash Cows Dogs Question Marks Relative Market Share High Low 2-16

FIGURE 2-3 BCG business portfolio analysis for Kodak’s consumer SBUs for 2003 (solid circle) and 2010 (hollow circle) ② ③ Kodak digital camera Kodak digital photo printer ① ④ Kodak film sales: US, Canada, & W. Europe Kodak self- service kiosk 2-17

SETTING STRATEGIC DIRECTIONS WHERE DO WE WANT TO GO? LO3 Hedgehog Analysis Illustration courtesy of Jon Keegan What Can We Be the Best At in the World? What Drives Our Economic Engine? What Are We Deeply Passionate About? 2-18

SETTING STRATEGIC DIRECTIONS WHERE DO WE WANT TO GO? LO3 Blue Ocean Analysis Copyright 2005 W. Chan Kim and Renée Mauborgne Red Oceans –where we are Blue Oceans-where we want to be 2-19 Copyright 2005 W. Chan Kim and Renée Mauborgne

SETTING STRATEGIC DIRECTIONS TRACKING WITH MARKETING DASHBOARDS LO3 Car Dashboards and Marketing Dashboards Marketing Metrics and Graphics in Designing Marketing Dashboards Marketing Plan 2-20

FIGURE 2-4 An effective marketing dashboard like Oracle’s helps managers assess a business situation at a glance 2-21

USING MARKETING DASHBOARDS Which States are Underperforming? Annual Percent Change in Unit Volume by State Change in Growth > 10% 0 – 10% < 0% 2-22

FIGURE 2-5 (Condensed) The strategic marketing process has three phases: planning, implementation, and evaluation 2-23

THE STRATEGIC MARKETING PROCESS LO4 Strategic Marketing Process How Do We Allocate Our Resources to Get Where We Want to Go? How Do We Convert Our Plans to Actions? How Do Our Results Compare With Our Plans, and Do Deviations Require New Plans? 2-24

THE STRATEGIC MARKETING PROCESS THE PLANNING PHASE LO4 Step 1: Situation (SWOT) Analysis Situation Analysis SWOT Analysis Strengths Weaknesses Opportunities Threats 2-25

THE STRATEGIC MARKETING PROCESS THE PLANNING PHASE LO4 Step 1: Situation (SWOT) Analysis SWOT Analysis Study Identify Industry Trends Analyze Competitors Assess the Organization Research Present and Prospective Customers 2-26

FIGURE 2-6 Ben & Jerry’s SWOT analysis that serves as the basis for management actions regarding growth 2-27

THE STRATEGIC MARKETING PROCESS THE PLANNING PHASE LO4 Step 1: Situation (SWOT) Analysis SWOT Analysis Study Build on a Strength Correct a Weakness Exploit an Opportunity Avoid a Disaster- Laden Threat 2-28

THE STRATEGIC MARKETING PROCESS THE PLANNING PHASE LO4 Step 2: Market-Product Focus and Goal Setting Market Segmentation Points of Difference 2-29

THE STRATEGIC MARKETING PROCESS THE PLANNING PHASE LO4 Example: Medtronic’s Pacemaker Set Marketing & Product Goals Select Target Markets Find Points of Difference Position the Product 2-30

THE STRATEGIC MARKETING PROCESS THE PLANNING PHASE LO5 Step 3: Marketing Program Product Strategy Price Strategy Promotion Strategy Place (Distribution) Strategy 2-31

FIGURE 2-7 The elements of the marketing mix must be blended to produce a cohesive marketing program 2-32

THE STRATEGIC MARKETING PROCESS THE IMPLEMENTATION PHASE LO5 Obtaining Resources Designing the Marketing Organization Developing Schedules Executing the Marketing Program Marketing Strategy Marketing Tactics 2-33

THE STRATEGIC MARKETING PROCESS THE EVALUATION PHASE LO5 Comparing Results with Plans to Identify Deviations Planning Gap Acting on Deviations Exploiting a Positive Deviation Correcting a Negative Deviation 2-34

FIGURE 2-9 The evaluation phase of the strategic marketing process that compares actual results with goals to identify and act on deviations to fill in the “planning gap” 2-35