Strategy

zThe alignment of your processes, resources, and organizational structure to maximize benefits to various stakeholders

Strategy zStakeholders ystockholders ycustomers yemployees ysuppliers

Strategy zProcesses zIdentifying and reengineering work flows zTQM and just-in-time inventory systems zBuilding bridges through the use of cross- functional teams

Strategy zResources zCapital zLabor zMaterials zMachines zInformation zFacilities

Strategy zOrganizational Structure zFunctional structure zProduct/brand management structure zMatrix structure zEtc.

Functional Approach Departments based on similar skills and resource use. Vice President Marketing Production Control Vice President Manufacturing Vice President Fiancnce President CEO VPFinanceVPProductionVPMarketing

PRODUCT MANAGER ORGANIZATION

Engineering Manager Production Manager Marketing Manager Quality Manager 757 Project Mgr 767 Project Mgr 737 Project Mgr 747 Project Mgr Matrix Organization

Strategy zCorporate strategy zBusiness-unit strategy zFunctional strategy (product-market entry) yMarketing plans and strategies primarily focus on this level

Strategic business units zStrategic business unit: zAn entity that can be separated for planning purposes zHas its own set of customers zHas its own set of competitors zHas a manager who is responsible for the unit

Corporate Strategy zMission zProduct-oriented vs. market-oriented zFunctions to be performed zSocial responsibility issues

Corporate Strategy zCorporate objectives zProfitability yROI yReturn on shareholder’s equity y$ profit yetc. zDiscounted cash flow zMarket share zEtc.

Corporate Development Strategy Current Markets New Markets Current Products New Products Market Penetration Market Development Product Development Diversification

Corporate Strategy zCorporate development strategy zMarket penetration zMarket development zProduct development zDiversification yforward integration ybackward integration yrelated (concentric) diversification yunrelated (conglomerate) diversification

Corporate Strategy zResource allocation zBoston Consulting Group model (Boyd, Walker & Larreche, pp. 41, 42) zIndustry attractiveness -- business position matrix (General Electric model) (Boyd, Walker & Larreche, p. 44)

BCG Matrix Market Growth Rate Relative Market Share Stars Question Marks Cash Cows Dogs

Industry Attractiveness— Business Position Matrix Competitive position High Medium Low Industry Attractiveness HighMediumLow

Strategic business units zStrategy formulation (Porter’s typology) zOverall cost leadership ybroad focus ynarrow focus zDifferentiation ybroad focus ynarrow focus

Porter’s Typology Cost Leadership Differentiation Narrow Focus Broad Focus

Functional (product-market) strategy: The marketing mix (4Ps) zProduct zPrice zPlace zPromotion yadvertising ypersonal selling ysales promotion ypublicity

Value creation & delivery zChoose the value zProvide the value zCommunicate the value

Value creation & delivery zChoose the value zSegmentation zTargeting zPositioning

Value creation & delivery zProvide the value zProduct & service development zPricing zSourcing zManufacturing zDistributing zServicing

Value creation & delivery zCommunicate the value zSales force zSales promotion zAdvertising zPublicity