Strategic Marketing- Lecture -Session 1

7/30/2019 Strategic Marketing- Lecture -Session 1

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Strategic MarketingStrategic Marketing


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Corporate StrategyCorporate Strategy

What is it?What is it?

Why is it important in organizations?Why is it important in organizations?

Where did it emanate?Where did it emanate?

How has it developed?How has it developed?

What are the approaches to Strategy?What are the approaches to Strategy?


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Corporate StrategyCorporate Strategy Sun-Tzus work is considered to be pre-eminent in terms of historical strategicSun-Tzus work is considered to be pre-eminent in terms of historical strategic

THOUGHT!THOUGHT!

In the 20/21st century business has considered many of Sun-Tzus strategiesIn the 20/21st century business has considered many of Sun-Tzus strategiesand tactics in terms of competition and how to strategize businessand tactics in terms of competition and how to strategize business

Strategy therefore is the choosing to perform activities differently than rivalsStrategy therefore is the choosing to perform activities differently than rivalsdo (do ( source: Michael Porter What is strategy HBR 1996source: Michael Porter What is strategy HBR 1996))

In the past 2 decades much has been discussed about Strategy and manyIn the past 2 decades much has been discussed about Strategy and manyschools of thought have been developedschools of thought have been developed

Starting the 70s Academics & Practitioners in their study of corporations try toStarting the 70s Academics & Practitioners in their study of corporations try toput through frameworks and analytical tools to understand how Strategy shouldput through frameworks and analytical tools to understand how Strategy shouldbe looked at, formulated and implementedbe looked at, formulated and implemented

Michael Porter took these discussions to a more macro level that a corporationMichael Porter took these discussions to a more macro level that a corporationplays in. His seminal work on 5 forces theory is considered still today as a goodplays in. His seminal work on 5 forces theory is considered still today as a good

basis for analysis the environment, understanding competition, the prospect ofbasis for analysis the environment, understanding competition, the prospect of

disruptive technological changes, as well as the role of suppliers and customersdisruptive technological changes, as well as the role of suppliers and customers

in developing a Corporate Strategyin developing a Corporate Strategy

Porters macro view of the Strategy process has been deemed simplistic and tooPorters macro view of the Strategy process has been deemed simplistic and toostatic in many quartersstatic in many quarters

CK Prahalad and Gary Hamel brought forth the idea of Strategic INTENT andCK Prahalad and Gary Hamel brought forth the idea of Strategic INTENT andStrategic Response using CORE COMPETENCES based on their study ofStrategic Response using CORE COMPETENCES based on their study of

Japanese multinationals who had applied a bit of SunTzu tenets to competeJapanese multinationals who had applied a bit of SunTzu tenets to compete

against AMERICAN Multinationalsagainst AMERICAN Multinationals


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Porters 5 Forces modelPorters 5 Forces model


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Other points of view

Many other points of view in terms of

Strategy came into play in the 80s as American

MNCs squared off against Japanese companies and in manyCases the Japanese outflanked the Americans

Profs CK Prahalad & Gary Hamel suggested that companies

need to articulate their STRATEGIC INTENT and work to achieve

this. Core Competences dictated competitive advantage and

leveraging this required strategic intent.

STRATEGIC INTENT is the obsession with winning at all levels of

the organization and then sustain that obsession over a 10-20 year

quest for global LEADERSHIP! ( eg. Canon sought to beat XEROX;

Komatsu encircle Caterpillar)

Prahalad and Hamel set out to maintain that Strategic Intent

covers both the short term necessities of competition while

focusing the company on the long term (Source: Strategic Intent

Prahalad & Hamel HBR Jul-Aug 2006)


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Other points of viewOther points of view Porter has responded to these views by restating that StrategyPorter has responded to these views by restating that Strategy

has been hijacked by Operational Effectiveness (OE) measureshas been hijacked by Operational Effectiveness (OE) measures

such as TQM, Kaizen, Lean Mfg, and other things to make partssuch as TQM, Kaizen, Lean Mfg, and other things to make partsof the organization effective and efficient.of the organization effective and efficient.

He maintains that OE means performing similar activities betterHe maintains that OE means performing similar activities betterthan rivals perform themthan rivals perform them

Imagine a productivity frontier that is the sum of all existingImagine a productivity frontier that is the sum of all existing

best practices at any given time. This could be the MAX VALUEbest practices at any given time. This could be the MAX VALUEA COMPANY delivering a product/service can create at a givenA COMPANY delivering a product/service can create at a given

cost. Getting here involves using all available technologies,cost. Getting here involves using all available technologies,

strategies, skills, management techniques and purchased inputsstrategies, skills, management techniques and purchased inputs

This frontier keeps shifting constantly outward as newThis frontier keeps shifting constantly outward as new

technologies and management approaches are developed andtechnologies and management approaches are developed andas new inputs are availableas new inputs are available

He believes the more companies achieve OE, more theHe believes the more companies achieve OE, more theINDUSTRY looks the same. So where is the SUSTAINABLEINDUSTRY looks the same. So where is the SUSTAINABLE

COMPETITIVE ADVANTAGE needed for L/T success? That isCOMPETITIVE ADVANTAGE needed for L/T success? That is

Porters argument on what he believes is the distortion ofPorters argument on what he believes is the distortion ofstrategy by OE practitionersstrategy by OE practitioners


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OE vs Strategic PositioningOE vs Strategic Positioning

Relative Cost Position

HIGHLOW

NONP

RICEB

UYER

VALUE

DELIV

ERED

HIGH

LOW

COMPETITIVE STRATEGY IS THE DELIBERATE CHOICE OFDIFFERENT SET OF ACTIVITIES TO DELIVER A UNIQUE MIX OF VALUE

Productivity Frontier(state of best practice)Productivity Frontier

(state of best practice)Productivity Frontier

(state of best practice)


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Other challengers to PortersOther challengers to Porters

hypothesishypothesis

Besides Prahalad & Hamel, others have challengedBesides Prahalad & Hamel, others have challengedPorters views in terms of competitive strategyPorters views in terms of competitive strategy

Henry Mintzberg and others have maintained thatHenry Mintzberg and others have maintained thatPorters assumption is that Strategy is static and thatPorters assumption is that Strategy is static and that

competitive advantage can be sustained over a longcompetitive advantage can be sustained over a longterm to ensure high profitability; Mintzbergterm to ensure high profitability; Mintzberg

suggested that changing environments andsuggested that changing environments and

competition force companies to re-evaluate or adjustcompetition force companies to re-evaluate or adjust

their strategies. He suggests that external forcestheir strategies. He suggests that external forces

would want you changes and move towards awould want you changes and move towards a

EMERGING strategies approch to managementEMERGING strategies approch to management

Porter continues to maintain that Strategy is aboutPorter continues to maintain that Strategy is aboutTRADEOFFS! without the tradeoffs sustainableTRADEOFFS! without the tradeoffs sustainable

competitive advantage is not achievable!!!!!competitive advantage is not achievable!!!!!


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Henry Mintzberg & James Waters( McGill Univ Canada) broughtHenry Mintzberg & James Waters( McGill Univ Canada) brought

out their hypothesis that while Deliberate strategies is whereout their hypothesis that while Deliberate strategies is where

the companies begin, due to real time conditions/environment,the companies begin, due to real time conditions/environment,emergent strategies is part of the Strategy continuum. Bothemergent strategies is part of the Strategy continuum. Both

deliberate and emerging strategies in their view constitute twodeliberate and emerging strategies in their view constitute two

ends of the continuum.ends of the continuum.

They define Strategy as a pattern in a stream of decisionsThey define Strategy as a pattern in a stream of decisions

Hence their view is that there are INTENDED Strategies andHence their view is that there are INTENDED Strategies andthere are REALIZED Strategiesthere are REALIZED Strategies

Their article talks aboutTheir article talks about

- Entrepreneurial strategy- Entrepreneurial strategy

- Ideological strategy- Ideological strategy - Umbrella strategy- Umbrella strategy

- Process strategy- Process strategy

- Unconnected strategies- Unconnected strategies

- Consensus strategy- Consensus strategy


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Prahalad/HamelPrahalad/Hamel They argued that Western companies focus on trimming theirThey argued that Western companies focus on trimming their

ambitions to match resources, as a result, search for ONLY forambitions to match resources, as a result, search for ONLY for

advantages they can sustainadvantages they can sustain

Japanese companies, in contrast, leverage resources byJapanese companies, in contrast, leverage resources byaccelerating the pace of organizational learning and try toaccelerating the pace of organizational learning and try to

attain seemingly impossible goalsattain seemingly impossible goals

They foster the desire to succeed among their employees andThey foster the desire to succeed among their employees andmaintain it by spreading the vision of GLOBAL Leadership!maintain it by spreading the vision of GLOBAL Leadership!

These companies use :These companies use :

- building layers of advantage- building layers of advantage

- searching for loose bricks- searching for loose bricks

-changing terms of engagement-changing terms of engagement

-competing through collaboration-competing through collaboration

Strategic INTENT assures consistency of RESOURCE allocationStrategic INTENT assures consistency of RESOURCE allocationover the long term!over the long term!


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Corporate StrategyCorporate Strategy Despite various debates about CorporateDespite various debates about Corporate

strategy and what it is and how should onestrategy and what it is and how should onego about it, Porters 5 Forces has remained ago about it, Porters 5 Forces has remained a

fundamental approach to strategy constructsfundamental approach to strategy constructs

While various OE and emergent strategyWhile various OE and emergent strategy

concepts have been utilized, by and large theconcepts have been utilized, by and large thecorporate planners have embraced the 5corporate planners have embraced the 5

forces at least as a STARTING point!!!forces at least as a STARTING point!!!

But fundamentally Porters articulation seemBut fundamentally Porters articulation seem

to have withstood the test of time as to whatto have withstood the test of time as to what

is strategyis strategy


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Relevance from a MarketingRelevance from a Marketing

perspectiveperspective

Marketing is a strategic activityMarketing is a strategic activity It drives revenues, product extensions, marketIt drives revenues, product extensions, market

expansion, innovation, new product development &expansion, innovation, new product development &

Various other operational matter of the companyVarious other operational matter of the company Marketing has to tie into the Corporate Strategy in orderMarketing has to tie into the Corporate Strategy in order

to achieve the Corporate Strategic goalsto achieve the Corporate Strategic goals

Marketings influence is both internal and externalMarketings influence is both internal and external

It is also a listening board in terms of customer,It is also a listening board in terms of customer,consumers, markets ( current & new)consumers, markets ( current & new) It also helps in countering competition besidesIt also helps in countering competition besides

positioning the companypositioning the company


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Product/market matrixProduct/market matrix

Present

Markets

NewMarkets

CurrentProducts

NewProducts

MarketPenetration

MarketExpansion

ProductExpansion

Diversification


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Other important issues inOther important issues in

marketing strategymarketing strategy

Customer Value Proposition (USP, customerCustomer Value Proposition (USP, customerperceptions)perceptions)

Assets and Competencies (R&D, productAssets and Competencies (R&D, productdevelopment, Online presence, social mediadevelopment, Online presence, social mediaexposure, distribution)exposure, distribution)

Functional Strategies (eg. Brand Building, CRM)Functional Strategies (eg. Brand Building, CRM)

Business criteria (ROI, SCA, Budgets/Plans)Business criteria (ROI, SCA, Budgets/Plans)


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VideosVideos http://www.youtube.com/watch?v=ibrxIP0http://www.youtube.com/watch?v=ibrxIP0

http://www.youtube.com/watch?v=mwc07http://www.youtube.com/watch?v=mwc07

http://www.youtube.com/watch?v=4srFC0http://www.youtube.com/watch?v=4srFC0

http://www.youtube.com/watch?http://www.youtube.com/watch?v=uhOhlxlCRys&feature=relatedv=uhOhlxlCRys&feature=related
http://www.youtube.com/watch?v=ibrxIP0H84Mhttp://www.youtube.com/watch?v=ibrxIP0H84Mhttp://www.youtube.com/watch?v=mwc073nNl3Q&NR=1http://www.youtube.com/watch?v=mwc073nNl3Q&NR=1http://www.youtube.com/watch?v=4srFC0de4wwhttp://www.youtube.com/watch?v=4srFC0de4wwhttp://www.youtube.com/watch?v=4srFC0de4wwhttp://www.youtube.com/watch?v=mwc073nNl3Q&NR=1http://www.youtube.com/watch?v=ibrxIP0H84M

Strategic Marketing- Lecture -Session 1

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