1. Marketing Management Strategy II Paul Dishman, Ph.D. Department of Business Management Marriott School of Management Brigham Young University Lecture 5

2. Paul Dishman, Ph.D. Marketing Management Strategy Lecture Terms Traditional Approach to Strategy Two Views of Competitive Analysis Dynamic Model of Competitive Strategies

3. Paul Dishman, Ph.D. Marketing Management Coming to Terms Goal (something you strive for- but can never measure) –Objective (attainable, S*M*A*R*T) Strategy (plan to achieve objective) –Tactic (operation, program required to execute strategy) »Action Plan (tasks, assignments, CPM) Resource Analysis (all resources required to achieve the objective) –Budget (monetary resources)

4. Paul Dishman, Ph.D. Marketing Management Situational Analysis (SWOT) Internal –Strengths –Weaknesses External –Opportunities –Threats Strategic Planning: The most profitable match of company strengths with opportunities presented by the marketplace which would provide long-term advantage.

5. Paul Dishman, Ph.D. Marketing Management Situational Analysis (SWOT) Market share gain Market entry Intellectual property Financial Management team Owners, founders Products/services Manufacturing Strategic fit

6. Paul Dishman, Ph.D. Marketing Management Criteria Strengths Weaknesses OpportunitiesThreats Gain- ext. current- no prod. history- Prod1 CAGR>250%- major competitors Mkt Shareprod. line- may have over- Prod2 CAGR>54% - entry into designed prods- Prod3 emerging Mkt 6 Intellectual- 4 patents- unclear if SW- some leveraging- 2 possible Property- 3 pending patents okay with our R&Dinfringement - 9 2B submt’d- need license forsuits - clear tech 1/2 of roadmap roadmap Product- prods extend- EDP is not our- can take Prod1- time to mkt Leverage our Mkts primary focus into our Gamma- no resources 1 & 2 - Prod2 requires with extra FAB’s to leverage cust support we don’t have Situational Analysis (SWOT)

7. Paul Dishman, Ph.D. Marketing Management Strategic Planning Approaches Mission Statement Orientation Business Portfolio Analysis Strategic Business-Planning Grid Product Market Expansion Strategies Customer Marketing Mix

8. Paul Dishman, Ph.D. Marketing Management Mission Statement Orientation “Invisible Hand” Market, not technology- or product- orientation Capture vision Provide direction in decision making

9. Paul Dishman, Ph.D. Marketing Management Production vs. Market Orientation lifestyle, status expression Company Production Market fantasy, entertainment exchange value document management cosmetics theme parks, film credit cards copiers, faxes

10. Paul Dishman, Ph.D. Marketing Management “become $100 billion company” Vision Components SONY IAYF: “information at your fingertips” “personal, portable entertainment” “within an arm’s reach of every person in the world”

11. Paul Dishman, Ph.D. Marketing Management Business Units as Portfolio Financial Approach (IRR, ROI) Market Relation Approach –Growth-Share Matrix Business Planning Approach Issues

12. Paul Dishman, Ph.D. Marketing Management Dog Growth-Share Matrix (Boston Consulting Group) Relative Market Share HighLow Market Growth Rate High Low ??? Question Mark Star Cash Cow

13. Paul Dishman, Ph.D. Marketing Management Dog Growth-Share Matrix (Boston Consulting Group) Relative Market Share HighLow Market Growth Rate High Low ??? Question Mark Star Cash Cow

14. Paul Dishman, Ph.D. Marketing Management Growth-Share Matrix Strategies Build Hold Harvest Divest

15. Paul Dishman, Ph.D. Marketing Management Business Planning Grid (GE) 1: Industry Attractiveness Index (vertical) –Market Size –Market Growth Rate –Industry Profit Margin –Amount of Competition –Seasonality, Cyclicality of Demand –Industry Cost Structure

16. Paul Dishman, Ph.D. Marketing Management Business Planning Grid (GE) 2: Business Strength (horizontal) –Company’s relative market share –Price competitiveness –Product quality –Customer and market knowledge –Sales effectiveness –Other advantages

17. Paul Dishman, Ph.D. Marketing Management Business Planning Grid (GE) Strong Ave. Weak Business Strength High Medium Low Industry Attractiveness

18. Paul Dishman, Ph.D. Marketing Management Issues with Portfolio Approaches 75% of Fortune 500 use portfolio approach Investment in implementation Good at current assessment Need additional tools for future planning Avoid “attractiveness trap” Provided leverage for custom approaches

19. Paul Dishman, Ph.D. Marketing Management Company Orientation Product Orientation Customer Orientation Competitor Orientation Market Orientation Customer-centered NOYES NO YES Competition- centered Market Research Competitive Intelligence