Corporate Strategies

Organizations (Types) Business Firm Business Firm Privately owned organization that serves its customers in order to earn a profit. Must earn a profit. Privately owned organization that serves its customers in order to earn a profit. Must earn a profit. Profit is the reward to a business firm for the risk it undertakes in offering a product for sale. It’s the money left over after a firm’s total expenses are subtracted from it’s total revenues Profit is the reward to a business firm for the risk it undertakes in offering a product for sale. It’s the money left over after a firm’s total expenses are subtracted from it’s total revenues

Nonprofit Organization Nonprofit Organization Nongovernmental organization that serves its customers but does not have profit as an organizational goal Nongovernmental organization that serves its customers but does not have profit as an organizational goal Organizations (Types)

Organizations (Levels) Corporate Level Corporate Level Top management directs overall strategy for the entire organization Top management directs overall strategy for the entire organization

Organizations (Levels) Business Unit Business Unit Organization that makes a set of related products to a clearly defined group of customers Organization that makes a set of related products to a clearly defined group of customers Business unit level is the level at which business unit managers set direction for their products and markets to exploit value, creating opportunities Business unit level is the level at which business unit managers set direction for their products and markets to exploit value, creating opportunities Direction is more specific here Direction is more specific here Each unit has specialized activities Each unit has specialized activities

Organizations (Levels) Functional Level Functional Level Groups of specialists actually create value for the organization Groups of specialists actually create value for the organization Departments Departments Direction is more specific and focused Direction is more specific and focused Ex: Accounting, Marketing, Communications Ex: Accounting, Marketing, Communications Most of the work gets done at this level Most of the work gets done at this level

Organizations (Teams) Cross-Functional Teams Cross-Functional Teams Small number of people from different departments in an organization who are mutually accountable to a common set of performance goals Small number of people from different departments in an organization who are mutually accountable to a common set of performance goals

Organizations (The Mission) Mission Mission A statement of the organizations scope, often identifying its customers, markets, products, technology, and values A statement of the organizations scope, often identifying its customers, markets, products, technology, and values Mission Statement Mission Statement Usually inspirational Usually inspirational

Organizations (Mission Statement) The Mission of Southwest Airlines The Mission of Southwest Airlines The mission of Southwest Airlines is dedication to the highest quality of Customer Service delivered with a sense of warmth, friendliness, individual pride, and Company Spirit. The mission of Southwest Airlines is dedication to the highest quality of Customer Service delivered with a sense of warmth, friendliness, individual pride, and Company Spirit. To Our Employees To Our Employees We are committed to provide our Employees a stable work environment with equal opportunity for learning and personal growth. Creativity and innovation are encouraged for improving the effectiveness of Southwest Airlines. Above all, Employees will be provided the same concern, respect, and caring attitude within the organization that they are expected to share externally with every Southwest Customer. We are committed to provide our Employees a stable work environment with equal opportunity for learning and personal growth. Creativity and innovation are encouraged for improving the effectiveness of Southwest Airlines. Above all, Employees will be provided the same concern, respect, and caring attitude within the organization that they are expected to share externally with every Southwest Customer.

Organizations (Mission Statement) Above all else, we are committed to the care and improvement of human life. In recognition of this commitment, we strive to deliver high quality, cost effective healthcare in the communities we serve. Above all else, we are committed to the care and improvement of human life. In recognition of this commitment, we strive to deliver high quality, cost effective healthcare in the communities we serve. In pursuit of our mission, we believe the following value statements are essential and timeless. In pursuit of our mission, we believe the following value statements are essential and timeless. We recognize and affirm the unique and intrinsic worth of each individual. We recognize and affirm the unique and intrinsic worth of each individual. We treat all those we serve with compassion and kindness. We treat all those we serve with compassion and kindness. We act with absolute honesty, integrity and fairness in the way we conduct our business and the way we live our lives. We act with absolute honesty, integrity and fairness in the way we conduct our business and the way we live our lives. We trust our colleagues as valuable members of our healthcare team and pledge to treat one another with loyalty, respect and dignity. We trust our colleagues as valuable members of our healthcare team and pledge to treat one another with loyalty, respect and dignity.

Organizations (Mission Statement) The mission of the Tennessee Performing Arts Center is "to provide facilities, services and programs of the highest quality for the greatest benefit of the people, institutions and communities of the state, and to take a leadership role in fostering the performing arts, arts education, resident arts groups and other arts organizations." The mission of the Tennessee Performing Arts Center is "to provide facilities, services and programs of the highest quality for the greatest benefit of the people, institutions and communities of the state, and to take a leadership role in fostering the performing arts, arts education, resident arts groups and other arts organizations."

Organizations (The Culture) Organizational Culture Organizational Culture A set of values, ideas, and attitudes that is learned and shared among the members of an organization A set of values, ideas, and attitudes that is learned and shared among the members of an organization Mergers with other companies Mergers with other companies

Organizations (The Culture) Stakeholders Stakeholders The people who are affected by what the company does and how well it performs The people who are affected by what the company does and how well it performs Employees, owners, board members, suppliers, distributors, unions, customers, local communities Employees, owners, board members, suppliers, distributors, unions, customers, local communities

Organizations (Goals) Goals (or objectives) Goals (or objectives) Statements that are usually in the marketing plan, tell what should be accomplished by a certain time Statements that are usually in the marketing plan, tell what should be accomplished by a certain time Can be at corporate level, business unit level, or functional level – work together Can be at corporate level, business unit level, or functional level – work together Needs to be measurable Needs to be measurable

Organizations (Goals) Types of Goals Types of Goals Profit Profit Sales Sales Market Share (ratio of sales revenue of the firm to the total sales revenue of all firms in the industry, including the firm itself) Market Share (ratio of sales revenue of the firm to the total sales revenue of all firms in the industry, including the firm itself) Quality Quality Customer Satisfaction Customer Satisfaction Employee Welfare Employee Welfare Social Responsibility Social Responsibility

Growth Strategies Competencies Competencies An organization’s special capabilities including skills, technologies, and resources that distinguish it from other organizations An organization’s special capabilities including skills, technologies, and resources that distinguish it from other organizations

Growth Strategies Competitive Advantage Competitive Advantage Something an organization does better than competitors. Usually in regards to quality, great customer service, lowest prices, etc. Something an organization does better than competitors. Usually in regards to quality, great customer service, lowest prices, etc.

Growth Strategies Benchmarking Benchmarking Discovering how others do something better than you so you can imitate or leapfrog competition Discovering how others do something better than you so you can imitate or leapfrog competition

Growth Strategies Business Portfolio Analysis Business Portfolio Analysis Market-Product Analysis Market-Product Analysis

Growth Strategies: Business Portfolio Analysis Analyses an organization’s business units as though they are separate investments Analyses an organization’s business units as though they are separate investments

Growth Strategies: Business Portfolio Analysis Vertical Axis Vertical Axis Represents the market growth rate (meaning how much per year that industry is growing) Represents the market growth rate (meaning how much per year that industry is growing) Horizontal Axis Horizontal Axis Represents the relative market share (divide SBU sales by sales of largest firm in the industry) Represents the relative market share (divide SBU sales by sales of largest firm in the industry)

Growth Strategies: Business Portfolio Analysis Cash Cows Cash Cows Question Marks Question Marks Dogs Dogs Stars Stars

Growth Strategies: Business Portfolio Analysis Cash Cows Cash Cows Lower left quadrant Lower left quadrant Generate a lot of cash, more than they need, gives money to help with company overhead and invest into other SBUs Generate a lot of cash, more than they need, gives money to help with company overhead and invest into other SBUs Have dominate market share Have dominate market share Slow-growth market Slow-growth market Ex: Kodak Film Ex: Kodak Film

Growth Strategies: Business Portfolio Analysis Stars Stars Upper left quadrant Upper left quadrant High market share High market share High growth market High growth market May not have enough money to continue growth May not have enough money to continue growth Likely to become Cash Cows Likely to become Cash Cows Ex: Kodak digital camera Ex: Kodak digital camera

Growth Strategies: Business Portfolio Analysis Question Marks (or Problem Children) Question Marks (or Problem Children) Upper right quadrant Upper right quadrant Low market share Low market share High growth market High growth market Have to have lots of cash to maintain market share Have to have lots of cash to maintain market share Ex: Kodak at-home printers Ex: Kodak at-home printers

Growth Strategies: Business Portfolio Analysis Dogs Dogs Lower right quadrant Lower right quadrant Low market share Low market share Low growth market Low growth market May have enough money to keep them afloat, but may not ever be “big” for firm May have enough money to keep them afloat, but may not ever be “big” for firm Ex: Kodak self-service kiosks Ex: Kodak self-service kiosks

Growth Strategies: Business Portfolio Analysis Normally SBUs begin as Question Marks, then become Stars, Cash Cows, then Dogs Normally SBUs begin as Question Marks, then become Stars, Cash Cows, then Dogs Can’t really control market growth rate Can’t really control market growth rate Want to increase market share Want to increase market share

Growth Strategies: Business Portfolio Analysis

Growth Strategies: Market-Product Analysis A way to look at growth using markets and products A way to look at growth using markets and products Products Products Current market Current market Potential new market Potential new market Markets Markets Current product Current product Potential new product Potential new product

Growth Strategies: Market-Product Analysis Market Penetration Market Penetration Try to increase sales of current products in current markets Try to increase sales of current products in current markets Basic products do not change, market served does not change Basic products do not change, market served does not change How can sales be increased? How can sales be increased?

Growth Strategies: Market-Product Analysis Market Development Market Development Try to sell current products to new markets Try to sell current products to new markets Basic products do not change, market served do change Basic products do not change, market served do change

Growth Strategies: Market-Product Analysis Product Development Product Development Try to sell new products to current markets Try to sell new products to current markets New products are introduced to current market served New products are introduced to current market served

Growth Strategies: Market-Product Analysis Diversification Diversification Try to sell new products to new markets Try to sell new products to new markets New products are introduced to new markets served New products are introduced to new markets served

Strategic Marketing Process Phase I: Planning The process an organization uses when they allocate marketing mix resources to reach their target market The process an organization uses when they allocate marketing mix resources to reach their target market Create a marketing plan Create a marketing plan A road map for the marketing activities of an organization for a specified future period of time A road map for the marketing activities of an organization for a specified future period of time

Strategic Marketing Process Phase I: Planning Want to figure out where you are, where you’d like to be, and how you’re going to get there Want to figure out where you are, where you’d like to be, and how you’re going to get there

Strategic Marketing Process Phase I: Planning Begin with a Situation Analysis (SWOT Analysis) Begin with a Situation Analysis (SWOT Analysis) S – Strengths (Internal) S – Strengths (Internal) W – Weaknesses (Internal) W – Weaknesses (Internal) O – Opportunities (External) O – Opportunities (External) T – Threats (External) T – Threats (External) Can focus on product, product line, business unit, or whole organization Can focus on product, product line, business unit, or whole organization

Strategic Marketing Process Phase I: Planning Obtain a clear understanding of the following areas: Obtain a clear understanding of the following areas: Trends in the firm’s industry Trends in the firm’s industry Know as much as possible of competition Know as much as possible of competition Assess your organization Assess your organization Know as much as possible about your customers and prospective customers Know as much as possible about your customers and prospective customers

Strategic Marketing Process Phase I: Planning Once the SWOT is created, take the information you’ve learned and act on it Once the SWOT is created, take the information you’ve learned and act on it Build strengths Build strengths Correct weaknesses Correct weaknesses Exploit opportunities Exploit opportunities Avoid threats Avoid threats

Strategic Marketing Process Phase I: Planning Market-Product Focus and Goal Setting Market-Product Focus and Goal Setting After analyzing SWOT, the organization must decide which products they’ll offer to which customers After analyzing SWOT, the organization must decide which products they’ll offer to which customers

Strategic Marketing Process Phase I: Planning Market Segmentation Market Segmentation Aggregating prospective buyers into groups, or segments, that have common needs and will respond similarly to a marketing action Aggregating prospective buyers into groups, or segments, that have common needs and will respond similarly to a marketing action May have different marketing programs for different segments May have different marketing programs for different segments

Strategic Marketing Process Phase I: Planning Market Segmentation Market Segmentation Different market segments may have different goals Different market segments may have different goals Points of difference Points of difference Characteristics of a product that make it superior to competitive substitutes Characteristics of a product that make it superior to competitive substitutes

Strategic Marketing Process Phase I: Planning The Marketing Program The Marketing Program In this step of the planning phase, the budget and marketing mix is created In this step of the planning phase, the budget and marketing mix is created

Strategic Marketing Process Phase II: Implementation Carries out market program that was developed in planning phase Carries out market program that was developed in planning phase Obtain resources Obtain resources Find a way to get money to finance marketing program Find a way to get money to finance marketing program Design marketing organizations Design marketing organizations Helps put marketing program into effect (marketing department) Helps put marketing program into effect (marketing department) Develops schedules Develops schedules Basically a timeline Basically a timeline

Strategic Marketing Process Phase II: Implementation Execute marketing program Execute marketing program Marketing strategy is the means by which a marketing goal is to be achieved, usually characterized by a specified target market and marketing program to reach it Marketing strategy is the means by which a marketing goal is to be achieved, usually characterized by a specified target market and marketing program to reach it Marketing tactics are detailed day to day, operational decisions essential to the overall success of marketing strategies Marketing tactics are detailed day to day, operational decisions essential to the overall success of marketing strategies

Strategic Marketing Process Phase II: Control Make sure the marketing program is doing what it’s supposed to be doing Make sure the marketing program is doing what it’s supposed to be doing Compare what’s happening to what was planned Compare what’s happening to what was planned Make changes if needed Make changes if needed