University of Washington EMBA Program Regional 20 Marketing Management “Identifying Opportunities in the Marketplace” Instructor: Elizabeth Stearns

Mission Definition: –A description of the business we are in, or should be in, codifying what a firm does well or wishes to do. –Used to guide strategy development Needs to be supported by resources to accomplish the mission Marketers should avoid statements that are too narrow or too broad.

Mission Examples: – Otis Elevator To provide any consumer a means of moving people and things up, down, and sideways over short distances with higher reliability than any similar enterprise in the world.

Mission –Courtyard by Marriott To provide economy, and quality- minded frequent business travelers with a premier, moderate-priced lodging facility which is consistently perceived as clean, comfortable, well maintained and attractive, staffed by friendly, attentive and efficient people.

Mission Statements Co. Key MarketContributionDistinction Otis To provide anya means of movingwith higher consumerpeople and thingsreliability up, down, andthan any sideways oversimilar short distancesenterprise in the world

Mission Statements Co. Key MarketContributionDistinction ??? To offer the fastfood prepared in thedelivered in food customersame high qualitya consistent manner world-wide,low-key tasty and reasonablydecor pricedand friendly atmosphere

Mission Alternative bases Natural Resource Market or Market Segment Product/Service Technology Needs to be Satisfied

Choosing Among Market Opportunities Financial Analysis –Payback –ROI (Return on Investment) –ROE (Return on Equity) –IRR (Internal Rate of Return) –NPV (Net Present Value) –Risk Analysis

Choosing Among Market Opportunities Strategic Analysis – Growth Path – Portfolio Approaches Growth Share Matrix (BCG) Multiple Criteria (GE/McKinsey Screen)

Strategic Analysis Considerations for analysis: multi-level –Business –Product/Market Segment Portfolio Analysis: key dimensions –Market Attractiveness –Business Strengths

Strategic Focus Growth Profits

Three Intensive Growth Strategies: Ansoff’s Product/Market Expansion Grid 4. Diversification 2. Market development New markets 1. Market penetration Existing markets Existing products 3. Product development New products ©2000 Prentice Hall

Growth Path Analysis Products/Technologies Existing Customers Related New ExistingRelatedNew Risk

Growth Path Analysis Products/Technologies Existing Customers Related New ExistingRelated New Risk Market Penetration Product Extension Conglomeration Diversification Product Expansion Market Extension Business Extension Business Expansion Market Expansion Business Expansion

The Boston Consulting Group’s Growth-Share Matrix20%-18%-16%-14%-12%-10%- 8%- 8%- 6%- 6%- 4%- 4%- 2%- 2%- 0 Long term Market Growth Rate 3 ? Question marks ? ? ? 2 1 Cash cow 6 Dogs x 4x 2x 1.5x 1x Relative Market Share.5x.4x.3x.2x.1x Stars 5 4 ©2000 Prentice Hall

$ Cash cow Dogs Problem Children Stars Barnyard!

Profitable High Risk (Customers, Competitors, Technology) High Investment Cash Outflows DC A B $ High Investment Frequent Losses Heavy Cash Outflows High Risk (Customers, Competitors, Technology) Low Cost Supplier Price Premium High Profits Relatively Low Investment High Potential Cash Generation Low Risk High Cost Supplier Focus of Top Management Attention High Managerial Turnover Lower Profits and Cash Generation High Low Relative Market Share Long High Run Market Growth Rate Low The Growth/Share Matrix (BCG)

Developing the Multiple Criteria Matrix 1000 High 700 Medium 400 Low HighMediumLow Business Strengths Market Attractiveness

Developing the Multiple Criteria Matrix Go ? ? Stop ? 1000 High 700 Medium 400 Low HighMediumLow Business Strengths Market Attractiveness

Given our history, objectives, culture, management style, successes and failures, we like to be in markets where: Examples: –Profit margins are high –Exchange rates are stable –There are few competitors –Barriers to exit are low –Government Regulations are Extensive –The workforce is non-unionized - Market size is small - Market growth is high - Payback period is short

Market Attractiveness Analysis Factor Weight (to firm) Rating (to opportunity) Total Group (must = 100)(1-10) (WxR=T) Total ======

Business Strengths To be successful in this market, any competitor must possess: Examples: –Low cost operations –Consumer marketing skills –Established distribution facilities –Deep pockets –Ability to innovate new products –Effective information systems –A strong sales force –Commitment to R&D

Business Strengths (required to be successful) Factor Weight (any competitor) Rating (of firm) Total Group (must = 100)(1-10) (WxR=T) Total ======

Developing the Multiple Criteria Matrix 1000 High 700 Medium 400 Low HighMediumLow Business Strengths Market Attractiveness

Thank You!