Marketing Strategy
Rock1027
MEMORABLElesson2.pdf
MARKETING STRATEGY SESSION 6 with Dr. Brent Smith
CHAPTER OUTLINE ¢ Introduction
¢ Making SWOT analysis productive
¢ SWOT-driven strategic planning
¢ Developing and leveraging competitive advantages
¢ Establishing a strategic focus
¢ Developing marketing goals and objectives
2
Sessio n 6
SWOT ANALYSIS ¢ Strengths and weaknesses, opportunities and threats
� Widely used framework for organizing and utilizing data and information gained from situation analysis
� Includes both internal and external environments � Helps uncover competitive advantages that can be leveraged
3
Sessio n 6
SWOT ANALYSIS ¢ Criticisms
� Allows firms to create lists without serious consideration of issues � Becomes a sterile academic exercise of classifying data and information
4
Sessio n 6
SWOT ANALYSIS Guidelines for producing effective SWOT Analysis
¢ Stay focused
¢ Search extensively for competitors
¢ Collaborate with other functional areas
¢ Examine issues from the customers’ perspective
¢ Look for causes not characteristics
¢ Separate internal issues from external issues
5
Sessio n 6
SWOT-DRIVEN STRATEGIC PLANNING ¢ Marketing information collected via a situation analysis
� Identifies the key factors that should be tackled by the firm � Organizes them within a system that will monitor and distribute information
on these factors on an ongoing basis
¢ Role of SWOT analysis � Synthesize wide array of information and aid in transition of the firm's
strategic focus
6
Sessio n 6
SWOT ANALYSIS – POTENTIAL ISSUES
7
Potential internal strengths Potential external opportunities Abundant financial resources Rapid market growth
Well-known brand name Mishap of a rival firm
Economies of scale Government deregulation
Proprietary technology New technology
Better marketing skills Demographic shifts
Potential internal weaknesses Potential external threats Lack of strategic direction Entry of foreign competitors
Limited financial resources Product life cycle in decline
Weak spending on R&D Changing customer needs/tastes
Very narrow product line Economic boom/downturn
Internal political problems New technology
Sessio n 6
SWOT MATRIX ¢ Four-cell array used to visually evaluate elements of SWOT analysis
¢ Should be based on customer perceptions, not perceptions of the manager
¢ Elements with the highest total ratings should have the greatest influence in developing the strategy
¢ Focus on competitive advantages by matching strengths with opportunities
8
Sessio n 6
SWOT MATRIX
9
Source: Adapted from Nigel Piercy, Market-Led Strategic Change (Oxford, UK: Butterworth-Heineman, 2002).
Sessio n 6
¢ Questions: � Which is the most important: S, W, O, or T? Explain? � Might your response change if you were a CEO in a particular industry? � What if you were a customer of the firm?
Sessio n 6
10
SWOT
Core Competencies
Competitive Advantage
Sustainable Competitive Advantage
COMPETITIVE ADVANTAGE ¢ Competitive advantages:
� Can arise from many internal and external sources � Refer to real differences between competing firms � Based on perception or than reality � Possess a specific benefit for customers
to be of value to firms
11
Sessio n 6
COMPETITIVE ADVANTAGES - BASES
¢ Companies typically develop / achieve competitive advantage based on one or
more of the following strategies:
� Operational excellence � Product leadership � Customer intimacy
¢ When operating internationally, executives should assess if that advantage is:
� Location-bound � Non-location bound
Sessio n 6
12
COMPETITIVE ADVANTAGE - SOURCES Common sources of competitive advantage include:
¢ Relational advantages
¢ Legal advantages
¢ Organizational advantages
¢ Human resource advantages
¢ Product advantages
¢ Pricing advantages
¢ Promotion advantages
¢ Distribution advantages
13
Sessio n 6
CORE COMPETENCIES → COMPETITIVE ADVANTAGE Re: Walmart; DELL; Amazon
¢ Operational excellence often involves a combination of: � Core competencies
¢ Low cost operations and totally dependable product supply � Common attributes
¢ Target a broad, heterogeneous market of price-sensitive buyers ¢ Maintain system to minimize waste and reward incremental efficiencies
14
Sessio n 6
CORE COMPETENCIES → COMPETITIVE ADVANTAGE Re: 3M; Pfizer
¢ Product leadership often requires that firms develop and maintain: � Core competencies
¢ Basic research or rapid research interpretation ¢ Excellent marketing skills
� Common attributes ¢ Target narrow, homogeneous market segments ¢ Maintain organizational cultures characterized by decentralization,
adaptability, entrepreneurship, creativity, and the expectation of learning from failure
15
Sessio n 6
CORE COMPETENCIES → COMPETITIVE ADVANTAGE Re: Nordstrom; Amazon; Sephora
¢ Customer intimacy - Nordstrom and Amazon � Core competencies
¢ Exceptional skills in discovering customer needs ¢ Problem solving proficiency
� Common attributes ¢ Decentralize most decision-making authority to customer-contact level ¢ Assess all relationships with customers or alliance partners
16
Sessio n 6
ESTABLISHING A STRATEGIC FOCUS
¢ Some possible directions for strategic efforts include: � Aggressive: many internal strengths; many external opportunities � Diversification: many internal strengths; many external threats � Turnaround: many internal weaknesses; many external opportunities � Defensive: many internal weaknesses; external threats
17
Sessio n 6
BLUE OCEAN STRATEGY - PRINCIPLES
Re: Five Creatures Lesson
¢ Firms achieve strategic focus by developing competitively differentiated strategy
¢ Managers can utilize various tools to help them: � Strategy canvas to visually identify strategic focus � Four Actions Framework to reorient strategic focus away from competition
¢ Question: Is it possible for an organization to be successful despite having a
value curve that is not distinct from the competition? In other words, can an
organization be successful by selling a me-too product? Explain.
18
Sessio n 6
STRATEGY CANVAS - SOUTHWEST AIRLINES
19
Sessio n 6
STRATEGY CANVAS
¢ Horizontal axis � Identifies factors that the industry currently competes with and what customers
receive from existing product offerings
¢ Vertical axis � Identifies offering level received by buyers for each factor
¢ Value curve � Identifies firm’s relative performance across industry’s factors of competition
20
Sessio n 6
THE FOUR ACTIONS FRAMEWORK
21
Sessio n 6
MARKETING GOALS ¢ Statements of broad, desired accomplishments
¢ Expressed in general terms and do not contain specifics
¢ Gives direction to a firm’s growth and priorities to be used for evaluating and making decisions
¢ Should be attainable, consistent, comprehensive, and intangible
22
Sessio n 6
MARKETING OBJECTIVES ¢ Specific, quantitative benchmarks
¢ Measures progress toward the achievement of marketing goals
¢ High degree of specificity and differentiates marketing goals from objectives
¢ Characteristics � Attainability, continuity, time frame, and assignment of responsibility
¢ Suggestion: Create and utilize a responsibility assignment matrix
23
Sessio n 6
ResponsibleR
AccountableA
ConsultedC
InformedI
BALDRIGE PERFORMANCE EXCELLENCE FRAMEWORK
24
Sessio n 6
CONTINUOUS OBJECTIVES ¢ Continuous objectives
� Current objectives are similar to objectives set in previous planning period Objectives that are only slightly modified over time do not need new strategies, increased effort, or better implementation to be achieved
Example: � In Year 1: Set performance objectives for Year 2.
In Year 2: Report performance for Year 1 relative to stated objectives. Set objectives for Year 3 that build on objectives for Year 2.
25
Sessio n 6
DISCONTINUOUS OBJECTIVES ¢ Discontinuous objectives
� Elevate the level of performance on a given outcome factor � Require new strategies to achieve higher performance � Often a part of applying for the Malcolm Baldrige National Quality Award
26
Sessio n 6
MOVING BEYOND GOALS AND OBJECTIVES ¢ Functional areas and overall organization should have consistent / compatible
goals and objectives � Recognize desired ends and determine means to achieve them
27
Sessio n 6
