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Chapter Seven
Business
Marketing
Planning:
Strategic
Perspectives
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Introduction
Most of us believe that strategy is the province
of senior managers.
New growth strategies comes from new ideas
and new ideas comes from new voices.
Harnessing collective organizational efforts to
formulate strategies.
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Centered on customers
Take an outside-in view of strategy
Demonstrate an ability to sense markettrends ahead of their competitors
How large organizations like J&J, Motorola,
3M manage their numerous businessportfolios?
Marketings strategic role
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Hierarchy of Strategies
Corporate Strategy
What businesses are we in?
What are our core competencies?
How should we allocate resources?
What businesses shouldwe be in?
Role of marketing manager: as advocates of thecustomer to put the customer first in the firms
decision making
Business-Level Strategy
How do we compete in a given industry?
How should we position ourselves againstcompetitors?
Role of marketing: to provide a detailed analysis of customer
and competitors and firms distinctive skills and resources for
competing in a particular market segment
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GECEO Jack Welch example
Describe the global competitive environment in
which you operate?
In last 2 years what have your competitors
done?
In the same period, what have you done to them
in the market place?
How might they attach you in the future? What are the plans to leapfrog them?
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Functional Strategy
How can we allocate resources to most
efficiently and effectively support business-
level strategies?
Marketing manages organization-customer
connections
Marketing role: to allocate and coordinatemarketing resources and activities to achieve
the firms objective.
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Marketing: Perhaps Best Understood as:
1. Customer-product connectionlinking the
customer to the focal offering.
2.C
ustom
er-service delivery connectiondesign anddelivery actions involved in providing firms goods and
services. (CRM)
3. Customer-financial accountability connection--
Activities and processes that link customers tofinancial outcomes.( customer satisfaction &
profitability)
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Marketings Role in Managing Three CustomerConnections
Customer
Product Service Delivery Financial Accountability
Top Management
Operations
Human Resources,
Accounting
Accounting, Management
Information Systems
M
arketing,
Operations
HumanResou
rces
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Major business concept components tied together
by three important bridge elements: customerbenefits, configuration, and company boundaries.
CUSTOMER INTERFACE
Fulfillment & SupportInformation & Insight
Relationship DynamicsPricing Structure
CORE STRATEGY
Business MissionProduct/Market Scope
Basis for Differentiation
STRATEGICRESOURCES
Core CompetenciesStrategic Assets
Core Processes
VALUE NETWORK
SuppliersPartners
Coalitions
EFFICIENT / UNIQUE / FIT / PROFIT BOOSTERS
Components of business models
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Customer Interface
Fulfillmentand support
Informationand insight
Relationship
dynamics
Pricing
structure
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Core StrategyThree Elements
The business mission describes overall objective of
strategy, sets course of direction, and defines
performance criteria to measure progress.
Product/market scope defines where firm
competes.
Basis for differentiation captures essence of howfirm competes differently than its rivals do.
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Ways to differentiate products and
services
Provide superior service or technical assistance
competence through speed, responsiveness to
complex orders or ability to solve customers
problems Provide superior quality that reduces customer
cost or improve their performance
Offer innovative product features that use newtechnologies.
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Strategic Resources
Core competencies are set of skills, systems, and
technologies that creates uniquely high value for
customers.
Strategic
assets are more tangible requirements foradvantage. Strategic assets include brands, customer
data, distribution coverage, patents.
Core processes are methodologies and routines that
companies use to transform competencies, assets, and
other inputs into value for customers.
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Aligning Internal Business Processes to the Customer Strategy
Customer Strategy The Focus of Internal Business Processes
Operations Management Customer Relationship Management Innovation Management
Low Total Cost Strategy Highly Efficient Operating Ease of Customer Access Seek Process Innovations
Processes Superb Post-Sales Service Gain Scale Economies
Efficient, Timely Distribution
Product Leadership Flexible Manufacturing Capture Customer Ideas for Disciplined, High-Performance
Strategy Processes New Offering Product Development
Rapid Introduction of Educate Customers about Complex First-to-MarketNew Products New Products/Services
Complete Customer Deliver Broad Product/ Create Customized Solutions Identify New Opportunities
Solutions Strategy Service Line for Customers to Serve Customers
Create Network of Suppliers Build Strong Customer Anticipate Future Customer
for Extended Product/ Relationships Needs
Service Capabilities Develop Customer Knowledge
Lock-in Provide Capacity for Create Awareness Develop and EnhanceStrategies Proprietary Product/ Influence Switching Costs of Proprietary Product
Service Existing and Potential Increase Breadth/
Reliable Access and Customers Applications of Standard
Ease of Use
Source: Adapted from Robert S. Kaplan and David P. Norton, Strategy Maps: Converting Intangible Assets into Tangible Outcomes (Boston: HarvardBusiness School Publishing Corporation, 2004), pp. 322-344.
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Key value propositions
Low total cost- offer attractive prices, ease of purchase,
responsive services
Product innovation and leadership- Customer receive products that expand existing
performance boundaries through new features and
functions ( Intel, Sony)
Complete customer solutions- IBM Lock-in: purchasing a widely used proprietary product
from the firm. Ex: Microsoft operating system, eBays
exchange network
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Selfassessment exercise
1. In the hierarchy of
strategies, ____ strategy
defines the businesses in
which a company will compete,
preferably in a manner thatutilizes resources to convert
distinctive competence into
competitive advantage.
a. functional
b. corporate c. business-level
d. product
e. divisional
In the hierarchy of strategies,
____ strategy centers on how
a firm will compete in a given
industry and will position itself
against its competitors. a. functional
b. corporate
c. business-level
d. product
e. divisional
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Selfassessment exercise
A business concept or
modelconsists of the
following major
components except:
a. core strategy.
b. strategic resources.
c. customer interface.
d. value network e. negotiated outcomes.
Which of the following is
an element of the
customer interface?
a.R
elationship dynamics. b. Core processes.
c. Pricing structure.
d. All of the above.
e. (a) and (c) only.
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Selfassessment exercise
All of the following are
components of a firm's
value networkexcept:
a. suppliers. b. coalitions.
c. strategic alliance
partners.
d. customers.
Cisco and General
Electric demonstrate
special skills in forging
relationships with
suppliers and alliance
partners. This is an
example of:
a. a value network.
b. relationship dynamics
c. a strategic asset.
d.a market scope.
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Selfassessment exercise
Techniques for
differentiating products
and services include
which of the following?
a. Superior service or
technical assistance.
b. Superior quality.
c. Lowest price among
competitors.
d. All of the above.
e. Only a and b.
____ are the set of skills,
systems, and
technologies a company
uses to create uniquely
high value for customers.
a. Strategic assets
b. Core competencies
c. Core processes
d. Core strategies
e. Customer interfaces
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Selfassessment exercise
The three principal
drivers of organizational
learning and growth
include:
a. human capital.
b. information capital.
c. organizational capital.
d. All of the above. e. Only b and c.
Which of the following are
used in the Customer
Perspective of the
Balanced Scorecard to
measure core customer
outcome measures?
a. Market share.
b. Customer acquisition.
c. Customer retention.
d. All of the above.
e. Only b and c.