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 Corporate Level Corporate Level TODAY’S ORGANIZATIONS STRUCTURE—CORPORATE LO1  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)  Strategic Business Unit (SBU) Level Strategic Business Unit (SBU) Level GE Commercial Finance (business loans, leases) GE Healthcare (imaging, diagnostics, life-support systems) GE Industrial (appliances, lighting, factory automation) GE Infrastructure (aircraft engines, energy, transportation) GE Money (consumer home loans, credit cards) 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 Functional Level  Department Cross-Functional Teams 2-6

FIGURE 2-1 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 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 Core Values  Nike- to experience the emotion of competition, winning and crushing competitors Nike- to experience the emotion of competition, winning and crushing competitors  Organizational Culture Organizational Culture  Mission or Vision Mission or Vision 2-9

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

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

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

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

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

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

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

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

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

FIGURE 2-4 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 > 10% 0 – 10% < 0% Change in Growth 2-22

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

THE STRATEGIC MARKETING PROCESS LO4 How Do We Allocate Our Resources to Get Where We Want to Go?  Strategic Marketing Process Strategic Marketing Process 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  Weaknesses  Strengths  Threats  Opportunities LO4 Situation Analysis SWOT Analysis  Step 1: Situation (SWOT) Analysis 2-25

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

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

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

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

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

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

FIGURE 2-7 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 Exploiting a Positive Deviation Correcting a Negative Deviation  Acting on Deviations Planning Gap  Comparing Results with Plans to Identify Deviations LO5 2-34

FIGURE 2-9 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