1. Business Strategy & the Marketing Program

2. Business strategies z(Porter’s typology) zOverall cost leadership ybroad focus ynarrow focus zDifferentiation ybroad focus ynarrow focus

3. Porter’s Typology Cost Leadership Differentiation Narrow Focus Broad Focus

4. Business strategy zMiles & Snow’s typology zProspectors zDefenders zAnalyzers zReactors

5. Miles & Snow Typology zProspectors zAggressive in new product development z“First mover” zHigh expenditures in new product R&D zOften found in technology-oriented industries

6. Miles & Snow Typology zProspectors zOften found in “new” industries zOften in introduction or early growth stage of PLC

7. Miles & Snow Typology zProspectors zCustomer segments often not well defined zRelatively inefficient in terms of cost-per- unit zOften “cash hungry” zSharing resources with other SBUs diminishes flexibility

8. Miles & Snow Typology zDefenders zFocus on maintaining position ymay entail aggressive marketing efforts zTypically found in mature markets (grocery, soft drinks, etc.) z“Cash cows”

9. Miles & Snow Typology zDefenders zTargets “mass market” zRepeat/replacement buyers zUnderpinned by stable technology zStable, established competitors

10. Miles & Snow Typology zDefenders zCompete through ycost-reduction through xprocess engineering xoperating synergies with other SBUs yquality improvement R&D yprice competition ypromotion

11. Miles & Snow Typology zDefenders zLow-cost defenders (Porter+Miles & Snow) ysignificant economies of scale and manufacturing efficiency (process engineering) ylow-cost sources of supply

12. Miles & Snow Typology zDefenders zLow-cost defenders (Porter+Miles & Snow) (cont’d) ytry to maintain the “low cost” position in their markets ymay focus on low price offerings at the expense of marketing, sales, or service yoften focus on “commodity-type” products

13. Miles & Snow Typology zDefenders zDifferentiated defenders (Porter+Miles & Snow) ydifferentiated offerings ycost of differentiation increases cost structure yoften found in fragmented markets

14. Miles & Snow Typology zAnalyzers zElements of both prospectors and defenders zFocus on maintaining position in core markets zSelective pursuit of new product opportunities

15. Miles & Snow Typology zAnalyzers zLow cost analyzers (Porter+Miles & Snow) ymaintain “low cost” position when selectively expanding into new markets zDifferentiated analyzers (Porter+Miles & Snow) yexpand into new markets with “differentiated” offerings

16. Miles & Snow Typology zReactors zNo well-defined strategy zReactive decision-making

17. Porter & Miles & Snow Combined (BW&L, p. 216) ProspectorAnalyzerDefenderReactor Differentiation Cost Leadership Competitive Strategy (Porter) Emphasis on new product-market growth (Miles & Snow) Differentiated Defender Low-cost Defender Differentiated Analyzer Low-cost Analyzer

18. Miles and Snow s Miles and Snow Typology Examples Defender: McDonald’s Prospector: Reebok International, Mrs. Fields Analyzer: Procter & Gamble (Crest), Starbucks Reactor: W.T. Grant