Project for a class (Innovation in engineering )
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6._risk_mgmt_sales_strategy_mktg.pdf
Risk Mgmt, Sales
Strategy & Marketing
Strategic Position (SP) • What is strategic positioning?
• Strategic positioning is the positioning of an organization, while taking into account the changing environment, plus the systematic realization of that positioning.
• It includes the devising of the desired future position of the organization on the basis of present and foreseeable developments, and the making of plans to realize that positioning.
• Primary outcome is to ensure continuity of the organization
Questions to be asked for SP • What does the future look like?
• Market Trends • How could the organization be roughly
positioned in the future? • How can opportunities be seized and how can
threats be met? • How can this be put into practice in a systematic
way?
• Consider both products and services
Additional Points to keep in mind for Strategic Positioning • Strategic Position also defines what you DO
NOT DO – Why? • Look at the examples below and think about what
they DO NOT DO: • Costco • Boeing 787 • BMW • Toyota • Ritz Carlton • McDonald’s
Ways to differentiate your Strategic Positioning
• Customer Perception Factors • Might be hard to achieve – Why?
• Market Segment • Based on demographics (Location, age,
income) • Market Share – 800 lb gorilla in the market • Operational/Technological Advantages
• Example: Walmart • Sales Channels
• Example: Ally Bank
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Team Exercise
Take a few minutes and figure out the strategic positioning of Amazon and Zappos by considering the concepts discussed so far
OPPORTUNITES and RISKS
New Business Opportunities Consumers are always looking for new and better
choices to meet their wants and needs The American private enterprise economy promotes
innovation and new business development Innovation – an invention or creation that is brand
new Improvement – a designed change that increases the
usefulness of a product, service, or process
OPPORTUNITES and RISKS Recognizing Risks The National Federation of Independent
Business reports that of all new businesses, about Less than 1/3 are profitable, 1/3 do not make a profit, but continue to
operate, and 1/3 lose money
Primary reasons that businesses started by entrepreneurs shut down are: Lack of adequate capital Low sales Higher than expected expenses Competitive pressure An owner unprepared to manage a growing
business Operations requiring more time than the
owner is willing to commit
Risk Risk refers to potential problems or issues that may arise
and adversely impact the progress or outcome of a project Organizations have to take risk in order to be competitive Quote from Theodore Roosevelt “Risk is like fire: If controlled it will help you; if
uncontrolled it will rise up and destroy you For the purpose of this dissertation Risk = (Probability of Occurrence * Probability of Impact)
Risks could be generated by one or more of the following: Actions taken internally or which plan to be taken Actions others have taken or plan to take
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External events outside the organization’s control
Reasons for prevalence of risk in entrepreneurship projects
Increasing project complexity & number of stakeholders Not considered as part of the overall strategy Sourcing strategies are still immature, lacking altogether or are not aligned with enterprise objectives
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Lack vendor management skills
Reasons for prevalence of risk in entrepreneurship projects
One size fits all management approach – does not work with outsourcing projects Unique transaction costs such as searching,
contracting, controlling and recontracting Starting contract without agreeing to key
performance indicators Many organizations still practice traditional
outsourcing
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Risk categories Type of Risk Operational Definition of the Risk
Schedule The inability to deliver the end product within the originally specified period of time
Technical The inability of the technology to provide the expected performance
Financial The inability to complete the project within a given budget
Vendor The possibility of choosing an inappropriate vendor that could impact project performance
Culture Occurrence of shared values and assumptions that govern acceptable behavior and thought patterns which could result in
widely differing work ethics and quality standards Reputation Negative opinion of the stakeholders towards an organization
Intellectual Property The threat of the vendor using the outsourcer’s ideas to produce a competing product or service
Flexibility The inability of an organization to respond to potential internal or external changes in a timely and cost effective manner
Compliance The inability of an organization to comply with appropriate regulations (local and global)
Quality The inability of the end deliverable (product or service) to meet customer requirements
Risk Management, Definition
“Risk management is an orderly, progressive way of viewing a very complex situation.”
“. . . an assessment of the likelihood of an acceptable outcome to a given decision or judgment.”
Assessing Risk
“The ability to make a correct decision in a safe and timely manner depends on
(1) getting appropriate information quickly, (2) accurately assessing the information, (3) judging the probability of events, and assessing risk based on the three
previous elements.”
Making a Decision
1. Identify the threat or hazard 2. Assess the threat and its
consequences 3. Make the decision 4. Implement controls over the
situation
But when considering risks do not forget about opportunities
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Team Exercise ‐‐ Do a SWOT Analysis of the Tesla car
Marketing Plans
5 Ps of Marketing:
Product Price
Promotion Place People
The 5Ps for Sephora
Product – Broad Range Based on quality skincare Price – Above Market Promotion – Public Relations, Catalogs, Customer Loyalty Program, Website, iPhone app, social media Place – 500 stores, (including inside JC Penny), online and at 1‐877‐Sephora People – Highly trained, knowledgeable and customer centric
The 8Ps for Service –Based Ventures
Product Price Promotion Place People Physical Evidence Process Productivity
8Ps for Southwest Airlines Product – No frills, Convenience, Point to Point
Price – Low Prices, Below Market
Promotion – Website, Online, sponsorships,
Place – Major markets but often in secondary airports adjacent to major airports to keep costs down
People – Focus on customer service
Physical Evidence – Planes clean and safe, branding, allowing employees to dress casually and be friendly
Process – Same plane type for more uniformity and lower costs
Productivity – Key emphasis on a 20 minute turn around time; cross functional crew
What your customers want
• The 5 F’s of Marketing • Functions • Finances • Freedom (Convenience) • Feelings • Future Service
Marketing Should include: • Making sure that you are reaching your actual target
customer • Using more than one marketing method to reach your
customer • Online/ TV
• What's the speculation about problems with TV marketing?
• Brochures/Flyers • Signs/Billboards • Sampling • Networking/Word of mouth • Trade Shows http://www.entrepreneur.com/article/228601 http://www.entrepreneur.com/article/226146
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http://www.entrepreneur.com/article/219643
Marketing Should include: • Repetition
• Several exposures before the customer starts to notice your product/service
• How often have you seen the same commercials being repeated?
• Affordability • ROI based on expected sales
• Authenticity • http://www.authenticmarketing4entrepren eurs.com/
• (Watch the video on the link above)
Marketing Tactics • Advertising • Strategic Partnerships
• Distribution Agreements • Bundling • Cooperative Advertising
• Introductory Offers – what should you be careful about?
• Premiums (Free Gifts) • What do the time share guys do? • Also called “Foot in the door” technique
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But how is Marketing for Entrepreneurs different?
1. New products and a new client base 2. Obtaining a new customer versus managing an existing client base
3. Building a new brand versus an existing brand 4. Establishment of effective marketing channels 5. Listening to your customer
Relate all these differences to risks.
Sales Process • Store Sales • Mail order sales • Online Sales • Telephone Sales • Third Party Location Sales • Cold Calling • Leads • Know if the pay for the sales is commission
based or not
Why is it important to be aware about this?
Scenario Planning in Entrepreneurship
• What is scenario planning? • Way of doing strategic planning considering the
uncertainty, complexity and paradigm shifts • Each scenario tells a story of how various elements
might interact under a variety of different assumptions
• How is scenario planning different than contingency planning? • Contingency – addresses one variable at a time • Scenario – addresses multiple variables at a time
Systems Thinking
Steps in constructing scenarios
• Define the issue you wish to understand better • Identify the major stakeholders • Identify and study the main forces that are shaping
the future within the scope of the issues established in step 1. • Social; Technological; Economic; Environmental;
Political; Globalization; Legal • Uncertainties associated with the scenarios
• Prioritize the uncertainties • Apply the uncertainties to the scenarios • How would the stakeholders react now?
Summary Slide
• Understand what strategic positioning is • Be clear about the relationship between
RISK and Strategic Positioning • Identify and Understand the different
categories of risk that could affect your business
• Brainstorm about the inter relationships of those risks
• Implement Scenario Analysis
