Seminar 2 Managing Marketing Processes ---- Aligning Strategy and the Marketing Planning Process Robin Teigland Master of General Management Stockholm School of Economics September 5, 2013
Managing Marketing Processes_Seminar 2
Jan 16, 2015
Second seminar for my Managing Marketing Processes course in the MGM program at the Stockholm School of Economics.
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Seminar 2
Managing Marketing Processes----Aligning Strategy and the Marketing Planning Process
Robin TeiglandMaster of General ManagementStockholm School of Economics
September 5, 2013
Seminar 2 Overview
Taking a look at strategy
Group Assignment presentations
Guest Speaker, Fredrik Jansson, Tata Consulting Services
2
Some core concepts in strategy
Mission Purpose: Why we exist
Values What we believe in and how we behave
Vision What we want to be
3Collis & Rukstad, 2008
Walt Disney
Purpose/Mission To make people happy
Values No cynicism Nurturing and promulgation of “wholesome
American values” Creativity, dreams, and imagination Fanatical attention to consistency and detail Preservation and control of the Disney magic
4Collis & Rukstad 2008
5
What matters for success?
Companies most successful in creating long-termshareholder value are typically those that:
a) Have a vision and mission—They give precedence to purpose and goals other than profitability and shareholder return
b) Have strong, consistent, ethical values
Examples: • “Visionary”, e.g., Disney, HP, IBM, Merck, P&G, Shell, Wal-Mart• Boeing
• Focus pre-1996: “to build great planes,” • Weak financial controls—yet high profitability
• Focus 1997-2003 : “creating shareholder value”• Outcome: loss of market leadership, declining profitability
Grant 2008
The Strategy Hierarchy
6
Where should we compete?
How should we compete?
Corporate Headquarters Planning Activities
Define the corporate mission Establish strategic business units (SBUs) Assign resources to each SBU Assess growth opportunities
Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall
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Characteristics of SBUs (Strategic Business Units)
It is a single business or collection of related businesses
It has its own set of competitors It has a leader responsible for strategic
planning and profitability
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2-8
What is business strategy? Strategy
An integrated and coordinated set of commitments and actions designed to gain a competitive advantage
Competitive advantage When two or more firms compete
within the same market, one firm possesses a competitive advantage over its rivals when it earns (or has the potential to earn) a persistently higher rate of profit
9Hitt, Ireland & Hoskisson 2006
1. Long-term goal (objective)
1. Scope of the firm (customer or offering, geographic location, vertical integration
1. Competitive advantage
Components of business strategy
Collis & Rukstad 200810
Strategy ≠ Business Model
Business model (Magretta, 2002) Describes, as a system, how the pieces of a
business fit together. Does not factor in one critical dimension of
performance: competition Reflection of a realized strategy
11
Every organization has a business model . [it] makes some choices, which have consequences. [But] not every organization has a strategy - a
plan of action for different contingencies that may arise. (Casadesus et al. 2010)
Example of Strategy Statement
Edward Jones *To grow to 17,000 financial advisers by 2012 by offering trusted and convenient face-to-face financial advice to conservative individual investors who delegate their financial decisions, through a national network of one-financial-adviser offices.
*Probably from 2007
12Collis & Rukstad 2008
13
Generic strategies
Scope(Customer/
variety)
Type of competitive advantage
Broad
Narrow
Differentiation Low cost
Differentiation Cost leadership
Differentiation-based focus
Cost-based focus
Porter 1998
14
Generic strategies in the auto industry
Scope(Customer/
variety)
Type of competitive advantage
Broad
Narrow
Differentiation Low cost
Mercedes(Differentiation)
Nissan(Cost leadership)
BMW(Differentiation-
based focus)
Lada(Cost-based
Focus)
15
Making choices
Strategy is about choosing what NOT to do: Which customers not to serve What products or services not to offer Which activities not to perform
Strategy is about NOT being all things to all people
Porter
Avoid being stuck in the middle
Market share
Return oninvestment
High
HighLow
Low
Differentiation Cost leadership
Porter 16
17
What is the basis for strategy?
Today external environment characterized by increasing pace of change New technologies Globalization Increasing information/knowledge flows Changing customer preferences
A firm’s resources and capabilities offer a more secure basis for strategy than market focus
Grant 2008
18
Exploiting differences, not doing the same!
Competitive advantage:Ability to outperform
others due to exploiting unique features of firm’s
resources and capabilities
Grant 2008
-Inputs into a firm’s production
process
-A firm’s tangible, intangible, and
human assets
What is their potential for creating
competitive advantage?
What are resources?
19Grant 1991
“A capability is the capacity for a set of resources to perform a task or an activity in an integrative manner.”
In other words … The deployment of resources to achieve a goal The ability to do something… Used interchangeably with competence
What are capabilities?
20Grant 2008
21
Identifying organizational capabilities: A functional classification
FUNCTION CAPABILITY EXAMPLESCorporate Financial management ExxonMobil, GEManagement Strategic control IBM, Samsung
Coordinating business units BP, P&G Managing acquisitions Citigroup, Cisco
MIS Speed and responsiveness through Wal-Mart, Dell, rapid information transfer Capital One
R&D Research capability Merck, IBM Development of innovative new products Apple, 3M
Manufacturing Efficient volume manufacturing Briggs & Stratton Continuous Improvement Nucor, Harley-D Flexibility Zara, Four Seasons
Design Design capability Apple, Nokia
Marketing Brand management P&G, LVMH, Coke
Quality reputation Johnson & Johnson Responsiveness to market trends MTV, L’Oreal
Sales, Distribution Sales responsiveness PepsiCo, Pfizer& Service Efficiency and speed of distribution LL Bean, Dell
Customer Service Singapore Airlines Caterpillar
Grant 2008
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RESOURCESTANGIBLE INTANGIBLE HUMAN
•Financial•Physical
Architecture of resources and capabilities
ManagementSystems
OrganizationStructure
ORGANIZATIONAL CAPABILITIES
•Skills/know-how•Capacity for communication & collaboration•Motivation
•Technology•Reputation•Culture •Brand•Customer loyalty
Grant 2008
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•Skills/know-how•Capacity for communication & collaboration•Motivation
Links between resources, capabilities and competitive advantage
STRATEGY
INDUSTRY ENVIRONMENT
COMPETITIVEADVANTAGE
ORGANIZATIONALCAPABILITIES
RESOURCESTANGIBLE INTANGIBLE HUMAN
•Financial•Physical
•Technology•Reputation•Culture •Brand•Customer loyalty
Grant 2008
Defining organizational capabilities
Organizational Capabilities = firm’s capacity for undertaking a particular activity (Grant)
Distinctive Competence = activity that an organization does particularly well relative to competitors (Selznick)
Core Competence = capabilities that are fundamental to a firm’s strategy and performance (Hamel and Prahalad)
24
Characteristics of Core Competencies
A source of competitive advantage Applications in a wide variety of markets Difficult to imitate
Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall
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Core Competencies -Tree Diagram
Core Product 1 Core Product 2
Business1
Business2
1 2 3 4 5 6
Business3
Business4
7 8 9 10 11 12
End Products
Competence1
Competence1
Competence2
Competence2
Competence3
Competence3
Competence4
Competence4
Core Product 3
End Products
Prahalad & Hamel 1990Prahalad & Hamel 1990http://www.youtube.com/watch?http://www.youtube.com/watch?v=Ar_r2kE9Ej4&NR=1v=Ar_r2kE9Ej4&NR=1 26
Disney
• Movies fortheatrical,television andhome videomarkets
• Cable channel
• Magic Kingdom
• Golfing
• Shopping Village
• ConferenceCenter
• Epcot Center
• Camping
• Hotels
• General real estatebrokerage & resort &property mgmt services
• Develops commercial &industrial properties
• Plans resort & primaryhome communities
• Character Merchandise
• Records
• Merchandise & publishinglicenses
• Educational computersoftware, films, cassettes& filmstrips
FilmedEntertainment
Brand Image Creativity(Characters) Imagineering
Real EstateDevelopment
ConsumerProducts
Visual Media
• Walt Disney Studios• Disney Channel
• Home video
Theme Parks & Resorts• Disneyland
• Walt Disney World
• Epcot Center
• Tokyo Disney
CommunityDevelopment
• Disney DevelopmentCo.
• Arvida CommunityDevelopment
Other Media
• Charactermerchandising &publications
• Records & musicpublishing
• Educational media
CoreCompetencies
CoreProducts
Business Units
EndProducts
Walt Disney Studios’ 1984 Strategic Architecture
Capabilities
• Distribution(Buena Vista)
Entertainment &Recreational Parks,
Shows & Resorts
27Grant 2008
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2-30
What is Holistic Marketing?
Holistic marketing sees itself as integrating the value exploration, value
creation, and value delivery activities with the purpose of building long-term,
mutually satisfying relationships and co-prosperity among key stakeholders.
Holistic Marketing
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Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall
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Questions to Address in Holistic Marketing
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Value Exploration: What value opportunities are available?
Value Creation: How can we create new value offerings
efficiently?
Value Delivery: How can we deliver the new offerings efficiently?
Phases of Value Creation and Delivery
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Choosing the value (STP)
Providing the value (price, place, product)
Communicating the value (promotion)
Group Assignment for Today1. What do you think that the mission statement says about the
customer focus, value creation, market scope, guiding values, and core competencies of this company?
2. For your company, how do specific marketing actions appear to relate to the stated mission? E.g., does the advertising reflect the customer focus in the mission statement? In preparation for later stages of your work, make notes about how the mission affects the markets and customers to be served, the product/service offering, the competition, and higher-level strategy.
3. What changes would you suggest to the mission statement in order to make it more effective as a guide for the marketing planning process or an inspiration for managers and employees?
34
Marketing Plan Teams
35
MGM MARKETING
FALL 2013
GROUPS PREFERENCES
DRAGON1. B2C (Fortune 500) Product
THE MOJITOS1. B2C (Fortune 500) Service
PEAK PERFORMANCE1. B2B SME Service
ORANGE1. B2C SME (<250) Product (ASSESSIO)
OPERATION BRAHMA1. B2B SME (<250) Product (VETROLIFE)
THE TRANSFORMERS1. B2C SME Services (LINAS MATKASSE)
Seminar 3 Overview
Market Analysis and Planning
Group Assignment presentations
Guest Speaker, Peter Gavelin, SSE
36
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