Chap006 market strategy
Download as PPT, PDF0 likes560 views
The document discusses elements of business strategy including determining the product market and level of commitment of resources. It provides models for the strategic planning process involving external and internal analysis to identify and select strategies. Additional topics covered include developing objectives and functional plans, defining mission and vision, conducting environmental scanning, and addressing competitive challenges. The key aspects of strategy development and implementation are analyzed.
Chap006 market strategy
- 1. McGraw-Hill/Irwin Copyright © 2009 by the McGraw-Hill Companies, Inc. All rights reserved.
- 3. ELEMENTS OF BUSINESS STRATEGY 1 Determining the (What markets do we product market serve with what to serve products) 2 Determine partner (How do agreements relationship impact choices) commitments 3 Determining the level (What level of of commitment to investment in the provide resources product market are we willing to make) 4 Determining the (What are the detailed objectives and plans aims and action plans) for each functional area 6-3
- 4. CRITICAL ELEMENTS IN A STRATEGIC PLAN Determining the (What markets do we 1 product market serve with what to serve products) Determining the level (What level of 2 of commitment to investment in the provide resources product market are we willing to make) Determining the (What are the detailed 3 objectives and plans aims and action plans) for each functional area 6-4
- 5. STRATEGY PROCESS MODEL 1 EXTERNAL SELF (INTERNAL ANALYSIS ANALYSIS Evaluate opportunities, Evaluate strengths, threats and strategic weaknesses, problems, questions constraints, questions STRATEGY IDENTIFICATION AND SELECTION Exhibit 6-2 6-5
- 6. STRATEGY PROCESS MODEL 2 Update historical data Collect current situation data Data analysis Develop objectives, strategies, programs Develop financial documents Negotiate final plan Measure progress toward objectives Exhibit 6-2 Audit 6-6
- 7. STRATEGY PROCESS MODEL 3 1. Define 2. Develop 3. Define 4. Define Strategic Track 1 mission statement of vision goals planning operating foundation principles and values Environmental scanning Strategy development 5. Define planning 6. Define total 7. Define 8. Select Business Track 2 assumptions & market & leadership segments strategy implications: most requirements, and define Develop consensus re: attractive assess long-term corporate & environment segments strengths & segment (customer/market, weaknesses in strategy competition, attractive segments suppliers, etc.) Gap analysis Strategy integration and capability development 9. Define capability 10. Formulate 11. Appraise, test 12. Modify Strategy Track 3 gaps by assessing strategies & reconcile goals if integration strengths/ that yield strategy with required, set capability weaknesses against competitive functional functional development current capabilities & advantage plans/ and specific competitors in needs business selected segments Exhibit 6-2 objectives 6-7
- 8. WANTS-GETS GRID HIGH PERFORMANCE Assistance Consistent product in cost control quality and appearance OVERACHIEVEMENT Reliable delivery Sales support UNDERACHIEVEMENT Fast order cycle Access to top Lead management generation HIGH IMPORTANCE Exhibit 6-5 6-8
- 9. CONCEPTUAL MAP Project manager’s competency Hi NOVUS MAVUUS T3 Reputation for Bad Good Excellence CLARKE Lo Exhibit 6-6 6-9
- 10. VALUE CHAIN ANALYSIS Share of user $ Manufacturers Specialty Dealers Users 2000 2005 1 Wholesalers 100 120 150 300 40% 50% Manufacturers Distributors Users 60% 50% 2 100% 100% 101 130 200 Total spending by users $10mm $15mm Exhibit 6-7 6-10
- 11. FIVE FORCES OF COMPETITION Threat of substitutes Bargaining Struggles Bargaining power of between power of suppliers industry rivals customers Threat of potential entrants Exhibit 6-8 6-11
- 12. BARRIERS TO ENTERING A MARKET • PRODUCT DIFFERENTIATION • ECONOMIES OF SCALE • CAPITAL REQUIREMENTS • ACCESS TO DISTRIBUTION CHANNELS • COST DISADVANTAGES UNRELATED TO SIZE • GOVERNMENT POLICY Exhibit 6-9 6-12
- 13. ACTIONS TO MEET COMPETITIVE CHALLENGES • CHOOSE ITS COMPETITIVE BATTLEGROUND JUDICIOUSLY • CHANGE THE COMPETITIVE STRUCTURE OF THE INDUSTRY • ANTICIPATE AND EMPLOY CHANGE 6-13
- 14. Vision for disruption Identifying and creating oppor- tunities for temporary advantage through understanding •Stakeholder satisfaction •Strategic soothsaying Directed at identifying new ways to serve existing customers better or new customers that no one else serves now Capability Tactics for disruption for disruption Market Seizing initiative to gain Sustaining the momentum by disruption advantage by developing flexible capacities for: •Shifting the rules • Speed •Signaling • Surprise •Simultaneous & sequential strategic thrusts that can be applied across with actions that shape, mold, many actions to build a or influence the direction on series of temporary nature of the competitors’ advantageous responses Exhibit 6-10 6-14
- 15. KOMATSUV CATERPILLAR Arena 1 Arena 2 Arena 3 Arena 4 Cost & Quality Timing & Know-how Strongholds Deep Pockets Disrupt Cat’s strategic strengths Outmaneuver Cat’s strengths (“Encircle” Cat) Boost Lower Timing Know-how Geographic Channels Komatsu quality cost Rolls out Aggressive Komatsu moves Komatsu builds one R&D and out of Japanese moves to resources, new product stronghold to new plants product direct sales, program and user at a time Asia, Europe, dealers, then South America, alliances to regional and lastly Gain centers strengths North America initially Erodes Cat’s Picks off Undermines Erodes Maneuvers Erodes premium price, Cat’s full Cat’s Cat’s World around Cat’s deep global volume, line one advantage dominance Cat’s strong pockets low costs by one on product one place dealer innovation at a time network From the Field: 6-1 6-15
- 16. MARKET ORIENTATION ELEMENTS BEING SYSTEMATIC IN: 1. Gathering of information on customers and competitors 2. Analyzing information to develop market knowledge 3. Using this knowledge to guide strategy 6-16
- 17. PAYOFFS FROM A MARKET ORIENTATION A MARKET ORIENTATION COMPANY IS: 1. BETTER AT FITTING NEEDS OF CUSTOMERS 2. MORE DIFFICULT FOR COMPETITORS TO ASSESS 3. APT TO BE UNIQUE 6-17
- 18. REQUISITES FOR THE LEARNING ORGANIZATION Creating Visionary Target & Information x x x & x Execution leadership trajectory systems striving Exhibit 6-13 6-18