MS3024 New Venture Creation Week 8 Understanding Success

Success stepping stones for you SIE New Ideas Competition SIE New Ventures Competition University of Aberdeen Blues Skies Competition

Entrepreneurial Character Business Culture LUCK Entrepreneurial Character Business Culture Business Decisions Company Strengths 9: Understanding Success Entrepreneurship and Small Business

The Strategic Planning Process VISION STRATGY IMPLEMENTATION STRATEGIC ANALYSIS STRATEGY FORMULATION Feedback loops

The Strategic Planning Process VISION STRATGY IMPLEMENTATION STRATEGIC ANALYSIS STRATEGY FORMULATION Feedback loops Enduring Continuous, multi-level activity, informed by real-time, realistic information Continuous, multi-level activity with selection made by management – Fraser Doherty Incremental & adaptive decision-making to maintain maximum flexibility

Marketing Planning Aims & Mission Business objectives Company Analysis Company Capability: Strengths & Weaknesses Internal Appraisal Market Research Business Environment: Opportunities & Threats External Appraisal Business objectives

Questions to be answered What are the dimensions of value customers care about – operational excellence, product leadership or customer intimacy? For each dimension, what proportion of customers focus on it as their primary decision criteria? Which competitors provide the best value in each dimension? How does the firm compare to these competitors? Why does the firm fall short of the value leaders? Treacy & Wiersema

Tools of SWOT Analysis External appraisal: Internal appraisal: Benchmarking Financial ratio analysis Value Chain Generic marketing strategies Life cycle analysis Portfolio analysis External appraisal: Market research Economies of scale Porter’s Five Forces PESTLE analysis

Marketing Planning Aims & Mission Business objectives Company Analysis Company Capability: Strengths & Weaknesses Internal Appraisal Market Research Business Environment: Opportunities & Threats External Appraisal Business objectives 9: Understanding Success Entrepreneurship and Small Business

Marketing Planning Aims & Mission Business objectives Customer analysis Marketing mix: product, price, promotion, place & people Marketing strategy Company Analysis Company Capability: Strengths & Weaknesses Internal Appraisal Market Research Business Environment: Opportunities & Threats External Appraisal Marketing plans Operating plans 9: Understanding Success Entrepreneurship and Small Business

Marketing Planning Aims & Mission Business objectives Feedback loops caused by resource limitations Company Analysis Company Capability: Strengths & Weaknesses Internal Appraisal Market Research Business Environment: Opportunities & Threats External Appraisal Business objectives Customer analysis Marketing strategy Marketing mix: product, price, promotion, place & people Marketing plans Operating plans

Tools of SWOT Analysis Internal appraisal: Benchmarking Financial ratio analysis (see Week 4) Value Chain Generic marketing strategies Life cycle analysis Portfolio analysis External appraisal: Market research Economies of scale Porter’s Five Forces PESTLE analysis

Return to shareholders = Profit after interest Shareholders’ Wealth Return to shareholders = Profit after interest Shareholders funds

Tools of SWOT Analysis External appraisal: Internal appraisal: Benchmarking Financial ratio analysis Value Chain Generic marketing strategies Life cycle analysis Portfolio analysis External appraisal: Market research Economies of scale Porter’s Five Forces PESTLE analysis

Human resource management Technology development The Value Chain PRIMARY ACTIVITIES Inbound logistics Service Outbound logistics Operations Marketing & sales SUPPORT ACTIVITIES Firm infrastructure Human resource management Technology development Procurement

Tools of SWOT Analysis External appraisal: Internal appraisal: Benchmarking Financial ratio analysis Value Chain Generic marketing strategies Life cycle analysis Portfolio analysis External appraisal: Market research Economies of scale Porter’s Five Forces PESTLE analysis

Generic Marketing Strategies COMMODITY SUPPLIER OUTSTANDING SUCCESS MARKET TRADER NICHE PLAYER Broad market Focused market Low price Low differentiation High differentiation High price

We learned to identify our core strengths… We learned to identify our core strengths….The idea of building a business solely on cost or price was NOT a sustainable advantage. There would always be someone with something that was lower in price or cheaper to produce. What was really important was sustaining loyalty among customers and employees, and that could only be derived from having the highest level of service and very high performing products. Michael Dell – (How does the recession affect him?)

Tools of SWOT Analysis External appraisal: Internal appraisal: Benchmarking Financial ratio analysis Value Chain Generic marketing strategies Life cycle analysis Portfolio analysis External appraisal: Market research Economies of scale Porter’s Five Forces PESTLE analysis

Political Environmental PESTLE Analysis Economic Socioeconomic Technological Legal Environmental

Successful Entrepreneurial Strategies Strategy should emphasise something that makes your firm as unique as possible and delivers as much value as possible to the customer The best chance of doing this comes from differentiation with the aim of dominating your market and to do this effectively and quickly Then to continue to innovate based upon your differential advantage

Futures Thinking Holistic perspective Avoids a rigid approach to strategic planning Develops a vision about a desired future state Plans backwards from that state Scenario planning is similar

Strategy Misfit – Three Key Questions What new types of customer benefits should we seek to provide in 5, 10 or 15 years? What new competencies will we need to build or acquire to offer these benefits? How will we need to reconfigure our customer interface over the next few years? Hamel & Prahalad

Any brand is an assurance to customers Any brand is an assurance to customers. It is an assurance of quality, an assurance of consistency. There is an immediate recognition….all those things are guaranteed. Sir Adrian Cadbury Notes on Cadbury: Kraft vs Cadbury

Finally…. Strategy should be clear and focused Supported by - a culture that aims high - a structure that is flexible & responsive A good strategy is important but effective strategy execution is vital (and often ignored)