1-1 McGraw-Hill/Irwin ©2008 The McGraw-Hill Companies, All Rights Reserved C H A P T E R THREE Business Business Strategies Strategies and Their and Their Marketing Marketing Implicatio Implicatio ns ns 3
Jan 13, 2016
1-1
McGraw-Hill/Irwin©2008 The McGraw-Hill
Companies, All Rights Reserved
CHAPTER
THREE
Business Business Strategies Strategies
and Theirand Their
Marketing Marketing ImplicationsImplications
3
1-2 3-2
3m
SBUs Industrial & Transportation (adhesives &
filters)
Health Care
Consumer & Office Sector
Electro & communications sector
Display & Graphics sector
New Product Devlopment 30% of annuals from new products
1-4 3-4
Scotch-Brite Never Rust
Invest in new plants
Big Ad budget
Maintain profitability in other lines Post-it notes
Magic Transparent Tape
1-5 3-5
Discussion Question
2. On what basis do businesses compete?
1-6 3-6
Porter’s Generic Strategies
Overall Low Cost Leadership
Differentiation
Focus
1-7 3-7
Robert Miles & Charles SnowProspector
1-8 3-8
Defender
1-9 3-9
Analyzer
1-103-10
Reactor
1-113-11
Exhibit 3.2
Combined Typology of Business-Unit Competitive Strategies
Co
mp
etit
ive
stra
teg
y
Dif
fere
nti
atio
nC
ost
lea
der
ship
Emphasis on new product-market growthHeavy emphasis No emphasis
Prospector Analyzer Defender Reactor
Units primarily concerned with attaining growth
through aggressive
pursuit of new product-market opportunities
Units with strong core bus.;
actively seeking to expand into rel. prod-mkts
with differentiated
offeringsUnits with strong
core bus.; actively seeking to expand into rel. prod-mkts with low-cost
offerings
Units primarily concerned with maintaining a differentiated
position in mature markets
Units primarily concerned with maintaining a
low-cost position in
mature markets
Units with no clearly defined product-market development or
competitive strategy
1-123-12
Single Business Firms
Belvedere Vodka
Startups
Start Life as Prospectors
Services
Emirates Airline
Differentiated analyzer
Global Competitors
One of the analyzer strategies
1-133-13
How Business Strategies Differ in Scope, Objectives, Resource Deployments, and Synergy Exhibit 3.4.
Dimensions•Scope
•Goals and obj. Adaptability (new product success) Effectiveness • (inc. mrkt share) Efficiency (ROI)•Resource deployment•Synergy
Low-cost defenderMature/stable/well-defined domain; mature tech.and cust. segments
Very little
Low
HighGenerate excess cash (cash cows)
Need to seekoperating synergies to achieve efficiencies
Differentiated defenderMature/stable/well-defined domain; mature tech.and cust. segment
Little
Low
HighGenerate excess cash (cash cows)
Need to seek operating synergies to achieve efficiencies
1-143-14
How Business Strategies Differ in Scope, Objectives, Resource Deployments, and Synergy Exhibit 3.4.
Dimensions•Scope
•Goals and obj. Adaptability (new product success) Effectiveness (inc. mrkt share) Efficiency (ROI)•Resource deployment•Synergy
ProspectorBroad/dynamic domains; tech. and cust. segments not well-established
Extensive
HighLowNeed cash for product dev. (? or *)
Danger in sharing operating fac. and programs - better to share tech./mktg skills
AnalyzerMixture of defender and prospector strategies
Mix. of defender & prospector strats.
Mix. of defender & prospector strats.
Mix. of def. & prosp. strats Need cash for prod. dev. but < prospectors
Danger in sharing operating fac. and programs - better to share tech./mktg. skills
1-153-15
Let’s combine the two perspectives and examine the book retailing industry
Co
mp
etit
ive
stra
teg
y
Dif
fere
nti
atio
nC
ost
lea
der
ship
Emphasis on new product-market growthHeavy emphasis No emphasis
Prospector Analyzer Defender Reactor
Units primarily concerned with attaining growth
through aggressive
pursuit of new product-market opportunities
Units with strong core bus.;
actively seeking to expand into rel. prod-mkts
with differentiated
offeringsUnits with strong
core bus.; actively seeking to expand into rel. prod-mkts with low-cost
offerings
Units primarily concerned with maintaining a differentiated
position in mature markets
Units primarily concerned with maintaining a
low-cost position in
mature markets
Units with no clearly defined product-market development or
competitive strategy
1-163-16
Discussion Questions
3. How might the Internet change how firms compete? Are these strategy typologies obsolete?
1-173-17
Discussion Questions
4. What sorts of market, technological, and competitive conditions call for which of these strategies? What strengths are required for success with each?
1-183-18
Prospector Industry & Market
1-193-19
Prospector Technology
1-203-20
Prospector Competition
1-213-21
Prospector Business’s relative Strengths
1-223-22
Analyzer I&M
1-233-23
Analyzer Technology
1-243-24
Analyzer Competition
1-253-25
Analyzer BR strengths
1-263-26
D Defender I&M
1-273-27
D Defender Technology
1-283-28
D Defender Competition
1-293-29
D Defender BR Strengths
1-303-30
LC Defender I & M
1-313-31
LC Defender Technology
1-323-32
LC Defender
1-333-33
LC Defender
1-343-34
Discussion Questions
5. What sort of marketing mix (4 P’s) is typically appropriate for each of these strategies? Can we generalize?
1-353-35
1-363-36
Fit versus Future
Microwave Popcorn
1970s Pillsbury rejected idea of microwavable food.
ActII