Industrial Marketing Strategies

MBA-ProMa Industrial Marketing

Staffan Brege, Professor

A. Dynamic Effectiveness

Porter: Five Forces Framework

Competitive rivalry

Suppliers Customers

New entrants

Substitutes

New Industrial Structures and Dynamic Effectiveness

New industrial structures

Dynamic effectiveness

Increased operative effectiveness

New strategic positions

Operative plattforms- effecient sales org.- effecient marketing channel- CRM-systems- global logistics- purchasing portals

Strategic positions- markets/segments- market shares- product assortments- value chain position- competitive advantage

Mats Abrahamsson & Staffan Brege, 2000

Dynamic Effectiveness = Strategic Positions + Operative Plattforms

To Overcome Strategic and Operational Barriers

OperativeEffectiveness

StrategicEffectiveness

DynamicEffectiveness

Atlas CopcoExpansion from an efficient logistical plattform

ElectroluxTries to exploit operational synergies from acquisitions

EricssonAdapts logistical structures to new industry and new tehnology

DELLAffärsmodell som bygger på

- Direktförsäljning- Kundorderstyrd produktion

- Skalfördelar- Stark positionering

New companiesGoes directly into the dynamic position

Quick expansion based on efficient logistics - no old-fashioned infra-structure

Dynamic corner

1. Flexible production

2. New products in the same production system

3. Global logistics platform

4. Expansion to new markets

5. Administrative center

6. Internet strategy

Operational platformsStrategic opportunities

B. The Business Model Concept

The Business Model Concept

Market Positions

The Offering

Operational Platforms

What does the customer want?

What do we offer – value proposition?

What are our resources?

Market channel

Par

tner

s

Supply

How are we selling/ marketing?

Three cornerstones for success

Customer intimacy Innovation Operational excellence

C. Porter M: What is Strategy?

Definitions

Activities, then, are the basic units of competitive advantage. Overall advantage or disadvantage results from all a company´s acitivities, not only a few.

Operational effectiveness means performing similar activities better than rivals perform them. Operational effectiveness includes but is not limited to efficiency.

In contrast strategic positioning means performing different activities from rivals or performing similar activities in different ways.

Productivity Frontier

Relative cost position Nonprice byuer value delivered

Three Strategies

Strategic positions – can be based on customers´needs, customers´accessibility, or a variety of a company´s products or services

D. Prahalad and Hamel: Core Competence

Definition

Core competencies are the collective learning in the organization, especially how to coordinate diverse production skills and integrate multiple streams of technology

Unlike physical assets, competencies do not deteriorate as they are applied and shared. They grow.

Few companies are likely to build world leadership in more than five or six fundamental competencies.

The Tree Metaphor

Core competences are the root system Core products are the trunk and the major limbs SBUs are the smaler branches Products are the flowers and the leaves

Core Competence vs SBU Organisation

The tyranny of the SBU

Core competence

Unique Used in many markets Value to customers

Treshold capabilities and competences

Unique resources and core competences

Central vs Decentral

Corporate Country Local

Marketing X X

Sales X X

Service (X) X X

Development X

Production X

Logistics X (X)

IT-Systems X

Education X X

E. Stalk et al: Competing on Capabilities

Four principles of capability-based competition The building blocks of corporate strategy are not products

and markets but business processes Competitive success depends on transforming a company´s

key processes into strategic capabilities that consistently provide superior value to the customer

Companies crate these capabilities by making strategic investments in a support infrastructure that links together and transcends traditional SBU´s and functions.

Because capabilities necessarily cross functions, the champion of a capabilities-based strategy is the CEO.