Ch01 Strategic Market Mgt

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20 0 5 J o hn Wile y & S o ns

usiness Strategy: The Concept and Trends in Its Management PPT 1-1

Strategic Market Management

ByDavid A. Aaker

Vice-Chairman, Prophet

Professor Emeritus, University of California at Berkeley


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Copyright 2005 John Wiley & Sons, Inc. All rights reserved. Reproduction or translation of this work beyond that permitted inSection 117 of the 1976 United States Copyright Act without the express written permission of the copyright owner is unlawful.Requests for further information should be addressed to the Permissions Department, John Wiley & Sons, Inc. The purchaser may make back-up copies for his/her own use only and not for distribution or resale. The Publisher assumes no responsibilityfor errors, omissions, or damages, caused by the use of these programs or from the use of the information contained herein.

Part One

Introduction and Overview


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Business Strategy:The Concept and Trends inIts Management

Chapter One


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Plans are nothing,planning is everything.- Dwight D. Eisenhower


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Even if you are on the right track, youll get

run over if you just sit there.- Will Rodgers


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Where absolute superiority is notattainable, you must produce a relative oneat the decisive point by making skillful use

of what you have.- Karl von Clausewitz,

On War, 1832


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What is a Business Strategy?

The Product-Market Investment Strategy where to compete

The Customer Value Proposition

Assets and Competencies

Functional Strategies and Programs


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A Business StrategyA Business Strategy

Where to CompeteThe product-market investment decision

How to CompeteValue Assets & Function area

proposition competencies strategies and programs

Figure 1.1

A Business Strategy


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The Product-Market InvestmentStrategy

Invest to grow (or enter a product market)

Invest only to maintain the existing position

Milk the business by minimizing investment

Recover as many of the assets as possible byliquidating or divesting the business


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The Customer Value Proposition

Perceived benefit to customer:

Functional

Emotional

Social

Self-Expressive


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Customer Value Proposition Examples

A good value

Excellence on an important product or service attribute

The best overall quality

Product line breadth

Innovative offerings

A shared passion for an activity or a product

Global connections and prestige


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Assets and Competencies

Strategic Competency:

What a business unit does exceptionally well

Has strategic importance to the business

Based on knowledge or a process

Strategic Asset:

A resource


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Functional Strategies andPrograms

Manufacturing strategy

Distribution strategy

Brand-building strategy

Communication strategy

Information technologystrategy

Global strategy

Segmentation strategy

Quality program

Customer relationship program


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Strategic Options

Quality

Innovation

Focus

Being global

Product attribute

Product design

Product quality

Product line breadth

Corporate social responsibility

Brand familiarity

Customer intimacy


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Strategic Market Management:A Historical Perspective

Budgeting

Long-Range Planning

Strategic Planning

Strategic Market Management


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Characteristics and Trends

External Market Orientation

Proactive Strategies

Importance of InformationSystems

Knowledge Management

On-Line Analysis and DecisionMaking

Entrepreneurial Thrust

Implementation

Global Realities

Longer Time Horizon

Empirical Research

Interdisciplinary Developments


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Why Strategic Market Management?

Precipitate the consideration of strategic choices.

Force a long-range view.

Make visible the resource allocation decision.

Aid strategic analysis and decision making.

Provide a strategic management and control system.

Provide both horizontal and vertical communication andcoordination systems.

Help a business cope with change.


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Key Learnings

A business strategy includes the determination of the product-market scope and its dynamics (as reflected in the intensity of thebusiness investment), the customer value proposition, assets andcompetencies, and functional strategies and programs.

Available strategy options include quality, value, focus, innovationglobal, product attribute, product design, product line breadth,corporal social responsibility, brand familiarity, and customer intimacy. A business strategy involves the selection and integrationof a set of strategic options.

Strategic market management has evolved from and encompasses

budgeting, long-range planning and strategy planning. Strategic market management is externally-oriented, proactive,

timely, entrepreneurial, and globally supported by informationsystems and knowledge management programs.


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Ancillary Slides


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It isnt that they cant see thesolution, its that they cant see the

problem.

- G. K. Chesterton


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Experience, to most men, is like thestern lights of a ship, which illuminate

only the track it has passed.

- Samuel Coleridge


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What is Strategy?


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Strategy is a framework whichguides those choices that determine

the nature and direction of anorganization.

-Benjamin B. Tregoe &John W. Zimmerman

Top Management Strategy


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Strategy is the creation of a uniqueand valuable position, involving a

different set of activities.

-Michael Porter What is Strategy?

Harvard Business Review


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In terms of the three key players(competitors, customers, company)

strategy is defined as the way in which acorporation endeavors to differentiateitself positively from its competitors,

using its relative corporate strengths tobetter satisfy customer needs.

-Kenichi Ohmae The Mind of the Strategist


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Exercise

Select a company

What business are they in?

Who are the direct and indirectcompetitors?

Is this company proactive or reactive?

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Ch01 Strategic Market Mgt