Strategic Positioning and Performance Measurement
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The document discusses strategic positioning, emphasizing the importance of defining target markets, value propositions, and organizational capabilities to meet customer needs effectively. It highlights the evolution of marketing approaches and the necessity of adapting to customer expectations through segmentation and competitive advantages. Additionally, it introduces performance measurement tools such as the balanced scorecard to ensure organizations accurately assess what matters for delivering their value proposition.
Strategic Positioning and Performance Measurement
- 1. John Devlin MBA FCCA https://au.linkedin.com/in/JohnDevlinSydney Strategic positioning and its implications for performance measurement John Devlin, MBA, FCCA https://au.linkedin.com/in/JohnDevlinSydney
- 2. John Devlin MBA FCCA https://au.linkedin.com/in/JohnDevlinSydney Content Why do we need a position? Topic 1 Strategic Positioning & Segmentation 2 Core competencies & value proposition 3 How we measure what matters? 4 Discussion5
- 3. John Devlin MBA FCCA https://au.linkedin.com/in/JohnDevlinSydney Why do we need a position? Pre WWII Production Orientation Focus on efficiency in producing standard product. We make the product according to our specification 1940’s -1970’s Selling Orientation Post 70’s Market Orientation Focus on selling our product. Selling the brand If people know about our product they will buy it If we find out what customers want & then make it, then market it to customers, they may buy it if it suits their needs at a particular time Source: P Kotler, Marketing Management, 7th Ed Can we produce the product? Can we produce enough of it? Can we sell the product? Can we charge enough for it? What do customers want? Can we develop it while they still want it? How can we keep our customers happy?
- 4. John Devlin MBA FCCA https://au.linkedin.com/in/JohnDevlinSydney Strategic positioning is about answering some key questions KeyQuestionstoAnswer Who are we serving? What do we want to be? What is our value proposition? Requires a basis of segmentation. We can’t be everything to everybody What do we have to invest in/ improve to satisfy our key markets How will we meet our chosen segments needs?
- 5. John Devlin MBA FCCA https://au.linkedin.com/in/JohnDevlinSydney Demographic Industry Size Needs based approach Attribute based approach Segmentation should give us insight as to how we can serve our clients Segmentation Reactive basis of segmenting market Proactive approach What is the driver of value that a customer requires to be met
- 6. John Devlin MBA FCCA https://au.linkedin.com/in/JohnDevlinSydney Each Strategic Position requires a different set of organisational capabilities Value Provided (Position) Market Deliverable 1 Market Deliverable 2 Market Deliverable 3 Specific Deliverable 1 Specific Deliverable 2 Specific Deliverable 3 Specific Deliverable 4 Specific Deliverable 6 Specific Deliverable 5 Resource or Capability 1 Resource or Capability 2 Resource or Capability 3 Resource or Capability 4 Resource or Capability 6 Resource or Capability 5
- 7. John Devlin MBA FCCA https://au.linkedin.com/in/JohnDevlinSydney Each Strategic Position requires a different set of organisational capabilities Value Provided (Position) Market Deliverable 1 Market Deliverable 2 Market Deliverable 3 Specific Deliverable 1 Specific Deliverable 2 Specific Deliverable 3 Specific Deliverable 4 Specific Deliverable 6 Specific Deliverable 5 Resource or Capability 1 Resource or Capability 2 Resource or Capability 3 Resource or Capability 4 Resource or Capability 6 Resource or Capability 5 Segment 1
- 8. John Devlin MBA FCCA https://au.linkedin.com/in/JohnDevlinSydney Each Segment requires a different value proposition which must resonate with their needs Segmentation, comined with an audit of core competencies, generates options for potential target markets to serve. A value proposition is generally built around excellence in one of three dimensions Operational Excellence •Price •Selection •Convenience •Zero Defects Product Leadership •High performance product •Entering new market spaces •Product Introductions •Service Introductions Customer Intimacy •Customer knowledge •Solutions offered •Share of wallet •Retention It also provides the basis around which a value proposition should be built
- 9. John Devlin MBA FCCA https://au.linkedin.com/in/JohnDevlinSydney Segment will determine “excellence” dimension on which we will compete Operational Excellence Customer Intimacy Product Leadership • What is it that clients want? • How do we deliver this in a way that is more efficient & effective than competitors • Different Types of Value • Price • Benefit • Quality • Value equates to clients perception of benefits received versus costs sacrificed. • Costs • Monetary • Search • Psychological
- 10. John Devlin MBA FCCA https://au.linkedin.com/in/JohnDevlinSydney Competitive advantage comes from an organisation’s core competency Combines in ways competitors cannot easily or quickly imitate Able to be exploited across the business Ads value as perceived by customer Core competency Is a source of major competitive advantage Can be defended for required period. Can be applied across a wide range of applications
- 11. John Devlin MBA FCCA https://au.linkedin.com/in/JohnDevlinSydney Internal capabilities enable our core competency Economic Technological Human Management Organisational Assets, Financial Resources, Economies of Scale, Brands, Customer Loyalty Process, IT systems, Plant & Equipment Skills attitudes and behaviour of employees. Loyalty to organisation Ability to coordinate and allocate capabilities. Ability to make strategic choices and implementation The structures and systems people which together comprise the organisational culture
- 12. John Devlin MBA FCCA https://au.linkedin.com/in/JohnDevlinSydney The formulation of a strategic position enables us to fill in the gaps We are the To That Because of Our target market Our core value Our value proposition Our capabilities
- 13. John Devlin MBA FCCA https://au.linkedin.com/in/JohnDevlinSydney So…are we really measuring what will enable our value proposition to be delivered? Operational Excellence Product Leadership Customer Intimacy •Price competitiveness •Availability •Convenience/Speed of purchase •Quality & consistency of products/services/processes •Growth in customer base •Share of Market •First to market – Quality product development process •High Performance product – Features & Functionality •Marketing/Brand Awareness in Target Segments •Customer referrals •Share of Wallet of Target Segment •Completeness of the solution – Selling multiple branded products & services •Exceptional pre/post sales service •Relationship length/customer retention •Customer information •Share of wallet of customer/customer profitability
- 14. John Devlin MBA FCCA https://au.linkedin.com/in/JohnDevlinSydney Remembering that customers needs and operational performance change over time Cost Dependability FlexibilityQuality Speed Our perceived delivery Client Needs Cost Dependability FlexibilityQuality Speed Time
- 15. John Devlin MBA FCCA https://au.linkedin.com/in/JohnDevlinSydney Performance measures can involve different levels of aggregation Broad Strategic Measures Functional Strategic Measures Composite Performance Measures Generic Operations performance Measures Detailed Performance Measures High Strategic relevance & aggregation High diagnostic power and frequency of measurement Overall Strategic Objectives Market Strategic Objectives Operations Strategic Objectives Financial Strategic Objectives Customer Satisfaction Agility Resilience Quality Agility Speed CostDependability •Defections per Unit •Customer complaints •Time between failure •On time delivery •Product Range •Time to market •Order Lead time •Throughput time •Transaction Costs •Efficiency •Labour Costs Source: Slack, Chambers & Johnson; Operations Management; Prentice Hall Pg 584
- 16. John Devlin MBA FCCA https://au.linkedin.com/in/JohnDevlinSydney Customer Perspectives Financial Perspective Process Perspective Learning Perspective Vision & Strategy Process Perspective: To satisfy our shareholders & customers what business processes must we excel at?. Customer Perspective: To achieve our vision how should we appear to our customers? Financial Perspective: To succeed financially how must we look to our stakeholders? Learning Perspective: To achieve our vision how will we sustain our ability to change and improve? Translates the vision through 4 perspectives: Source: Kaplan & Norton; Using the Balanced Scorecard as a Strategic Management System, Harvard Business Review , January – February 1996 The Balanced Scorecard: We have a tool to ensure we are measuring what needs to be measured
- 17. John Devlin MBA FCCA https://au.linkedin.com/in/JohnDevlinSydney We have a tool to communicate & coordinate the company’s strategy Translating Vision Feedback & Learning Business Planning Communicating & Linking Vision & Strategy Feedback & Learning: Articulating the vision Supplying Strategic feedback Facilitating Strategic review & learning Business Planning: Setting Targets Aligning Strategic Initiatives Establishing Milestones Communicating & Linking: Communicating & educating Set goals Links rewards to performance measures Translating the vision: Clarifying the Vision Gaining Consensus Four Objectives: Source: Kaplan & Norton; Using the Balanced Scorecard as a Strategic Management System, Harvard Business Review , January – February 1996 The Balanced Scorecard:
- 18. John Devlin MBA FCCA https://au.linkedin.com/in/JohnDevlinSydney Strategic positioning and its implications for performance measurement John Devlin, MBA, FCCA https://au.linkedin.com/in/JohnDevlinSydney