1. Where are we?

2. You are finding answers re:
How the market is segmented & the relevant criteria that influence consumers use in their purchasing decisions
The nature & magnitude of the competition
Existing & emerging Economic & Technological trends that will impact demand, pricing, product design & positioning
Consumers
Competitors
Conditions

3. NEXT STEP Company Consumers Competitors Conditions
Situation/SWOT Analysis
Strategic Planning
Functional Integration
Performance Assessment
NEXT STEP
Company
Consumers
Competitors
Conditions
PEST
Growth & Competitive Strategies
Finance HR
Production
R&D
Marketing
Functional Integration
Profits
Mrkt Share
ROA
ROS
ROE
Asset T/O
Stock
Mrkt Cap

4. How good are your goods…
1st Big Q
How good are your goods…

5. Next Big Q
How good are you in making your goods…

7. Key Financial Q’s: Are You Making Enough Profit?
Liquidity? Enough Money on hand to run/grow your co.
Leverage? ideally proportioned betw. Debt & Equity?
How effectively are you utilizing your assets? A/T
R U providing your investors an Adequate Level of Return?
How close are you to Bankruptcy?
How’s those Bond Ratings?
Do you have Adequate Levels of Investment in your Company's Plant, People & Processes?

8. But 1st Company Consumers Competitors Conditions
Situation/SWOT Analysis
Strategic Planning
Functional Integration
Performance Assessment
But 1st
Company
Consumers
Competitors
Conditions
PEST
Growth & Competitive Strategies
Finance HR
Production
R&D
Marketing
Functional Integration
Profits
Mrkt Share
ROA
ROS
ROE
Asset T/O
Stock
Mrkt Cap

10. 3 Levels of Strategic MGT
Corporate-Level : In what business should we compete?
Corporation
Business-Level : How should we compete?
Sensors Unit
Cons.Elec. Unit
Nano-Tech Unit
Functional-Level : How do we coordinate?
Finance
HR / R&D
Production
Marketing

11. Level 1-Corporate Strategy
In which businesses do we compete?
Corporation
Consumer Security Services
Sensors Unit
Nano-Tech Unit ?

12. Decide what business(es) want to be in …
what Products to compete with…
What Markets to compete in…
Growth Strategy

13. Growth Strategies Present Products New Products Market Penetration-
Increase share among existing customers.
Product
Development
Create new
products for present markets
Present
Markets
Market Development
Attract new customers to existing products
New
Markets
Diversification
new products… new markets… new alliances

14. Next Level of Strategic MGT
Corporate-Level : In what business should we compete?
Corporation
Business-Level : How should we compete?
Sensors Unit
Cons.Elec. Unit
Nano-Tech Unit
Functional-Level : How do we coordinate?
Finance
HR / R&D
Production
Marketing

15. Business Unit Strategy: How do we Compete?
STRATEGIC
BUSINESS
UNIT
COMPETITOR A B C
MARKET
Focus?
Quality?
Price?

16. What Advantage can we create & sustain against our competitors?
& w/in which Market Segments should we compete?

17. Strategic Thinking- the ten big ideas 6. Resource allocation models –
Porter: strategic choices are set of basic generic strategies
(low cost, differentiation, market focus)

18. “If you don’t know where you are going
Porter “What is Strategy”
“If you don’t know where you are going
any road will get you there.” Lewis Carroll, -- Chapter 6, Alice in Wonderland

19. Design, produce, market more efficiently than competitors
You can Formulate Strategy based on what Competitive advantage you focus on:
Cost:
Design, produce, market more efficiently than competitors
Differentiation:
Deliver unique & superior value in terms of product quality, features, service

20. You can also Formulate Strategy by: Competitive Scope/ MARKET FOCUS Number & Nature of segments compete w/in-

21. & You can also Formulate Strategy by-Riding a Products Life Cycle
Adjust Marketing Mix according to natural Drift of products w/in segments-

22. Competitive Strategy Matrix
Number & nature of
segments compete w/in
Ride Product LifeCycle #2 #3
Compete on:
Broad Market
Niche Mrkt
Evolving Mrkt
Cost
Competitive Strategy Matrix #1
Product Quality

23. Competitive Strategy Matrix
Broad Mrkt
Niche Mrkt
Evolving Mrkt
Compete on:
Overall Cost Leader
Cost Leader- Lo -Tech Focus
Cost Leader - PLC
Lo+Trad+Hi
Differentiator-
Differentiator Hi- End Focus
Differentiator- PLC
Cost
Product Quality

24. Strategic Choice: Cost Leadership
Overriding goal = increased efficiency & lower costs relative to rivals
Minimize costs (Marketing, R&D & Production..)
Advantages
A cost leader able to charge lower prices
Even at same price- greater profitability

25. Strategic Choice: Differentiation
Create a product that customers perceive as distinct/unique & offer superior quality/service
Advantage
Customers expect & willing to pay premium prices

26. Strategic Choice: Differentiation
Will have significant expenditures in R&D & production…. want/need to make high quality/highly desirable product
Significant expenditures in marketing… develop greater brand equity —thru increased awareness of product quality
Greater Equity = Greater loyalty =
Less price sensitivity

27. 3rd Level of Strategy Functional Strategy Marketing Corporate Level
Business unit Level
Functional Strategy
Information
systems
Research &
development
Manufacturing
Finance
Marketing
Human resources

28. Situation/SWOT Analysis Performance Assessment
The Big Picture
Situation/SWOT Analysis
Strategic Planning
Functional Integration
Performance Assessment
Company
Consumers
Competitors
Conditions
PEST
Marketing
Growth
& Competitive Strategies
Profits
Mrkt Share
ROA
ROS
ROE
Asset T/O
Stock
Mrkt Cap
R&D
Production HR
Finance

29. INTERNAL STRATEGIC ALIGNMENT
FINANCE
Achieved when :
All Decisions made by & within all functional areas are in sync w/ one another,
As well as with the overall strategic direction of the firm
PRODUCTION
MARKETING

30. Examples of Strategic Alignment
NOTES:

32. Distinctive Competencies Distinctive Competencies
When all decisions made by & within all functional areas are in sync w/ one another,
As well as w/ your overall strategic direction -- you achieve…
Distinctive
Competencies
Distinctive
Competencies

33. Distinct competencies needed to achieve selected competitive strategy
Advantage*
Distinctive
Competencies
*Achieved when you sustain profits above Industry Average

34. Areas in which you can develop “Distinct Competencies”
MARKETING: Awareness & Accessibility
R&D: Product innovation & design
PRODUCTION: Plant Automation & utilization
Human Resources: Worker Expertise & Training

35. Achieving Competitive Advantage thru Cost-Focused Strategy
Allows for good profit margins on sales while keeping prices low especially in price-sensitive segments…
Functional Alignment
Production / HR
Automation - pursued early & aggressively/ relatively less expenditure on HR
Marketing
Spend moderately on promotion & sales
R&D
Spend minimally on R&D

36. Differentiator Seeks to create maximum awareness & brand equity.
Wants to be well known as a maker of high quality/highly desirable products
Functional Alignment
Production / HR
Less likely to invest in increased automation or production capacity / relatively higher expenditure on HR
Marketing
Spend heavy on advertising & sales to create maximum awareness & accessibility
Prices tend to be higher
R&D
High R&D spending - keep products fresh

37. Select one of the
Six
Basic Strategies