Misc. Information - Str.mgmt

8/12/2019 Misc. Information - Str.mgmt.

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Questions to Ask: Are you committed to implementing a plan to move your company forward?

What are the names of the key people who need to buy in to the plan?

How will you communicate the plan throughout the company?

Will you commit money, resources, and time to support the plan?

Lally, R. !""#$. Aligning %alues with &trategies' (etting results for the Hands on )anager *ffice +dition,

pp. -"$.

dentifying the specific definitions for an organi/ation0s formal values is often a fairly clean-cut task. )ost

companies include this information in their personnel handbook. Aligning the understanding of a

company0s informal values between e1ecutive management and many layers of subordinate employees

can prove to be a more challenging task. &o what are informal values? 23ou find them in 4uestions like,

2What does it take to get promoted,5 2What does it take to get fired56 2How late do have to stay to be

recogni/ed as a hard-worker?5 Lally, !""#$. )any of these 4uestions can usually be answered by one0s

common sense. Although, it is most helpful to a company0s employee body, to understand clearly all

values, formal or informal. t is the manager who is usually charged with the task of communicating formal

or informal values. How does this all relate to strategy? 2)anagers are good at creating strategies basedon market conditions, but they often stop there without considering whether elements underneath the

strategy7values, staff, and the rest7are aligned with it. f they aren0t, the strategy fails5 Lally, !""#$. 8he

core idea is that regardless of how market conditions change, when the manager realigns his or her

strategy, other organi/ational elements must also change. 2)anagers must facilitate changes in

organi/ational structures, compensation, and the informal values so that they all line up with the

strategy5 Lally, !""#$. 8he manager should also work diplomatically with senior management in order to

facilitate certain changes that re4uire approval. *ften, the manager has to entertain both the employees

and senior management when working to accomplish strategy changes.

9lampitt, :., ;erk, ;. and Williams, ).


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Williams,


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of a large company, and then asking that person to take the somewhat ethereal big picture strategies of

the larger organi/ation and apply them in some workable manner. 8he gist of the message was one of

2marketing a process5, not a 2marketing process5.

Resource Management

8his proved to be an interesting site in that it took a flash card, or sound bit type of approach to discussing

leadership characteristics, and the connections with proper employee resource management. 8he authorespecially liked the sections that contained 2myth v. reality5 comparisons. t could be argued that this site

does not address a wide variety of resources other than personnel, but in the authors0 opinion, the people

are the most important resource. 8his site also included information on issues such as reward systems

and employee empowerment. n retrospect, this site would probably be a more effective part of the tool kit

if it was split up and scattered throughout the tool kit.

How to achieve the targeted resultsAction plans! how to get there"28here are three kinds of companies' those that make things happen, those that watch things happen,

and the rest who wonder what happened.5 Anonymous

A successful business is about creating value for its customers, and the intent or plan should be to create

more value than the competitors. 8his process involves matching the firm0s resources and capabilities

with the opportunities and challenges of the marketplace. A successful business strategy matches the

firm0s strengths resources and capabilities$ with market opportunities to create a sustainable competitive

advantage by providing more value for its customers than competitors.

8hree ingredients are necessary for a business to successfully steer a strategic course through market

turbulence and become proactive in shaping events and competitive behavior to its advantage.

!. )ission 7 A strategic mission and vision that articulates the nature of the business and focuses

the energies of all parts of the organi/ation toward the task of outperforming the competition.


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sustainable competitive advantage, how to strengthen the company0s long-term position, how to grow the

business, how to satisfy customers, how to respond to changing market conditions, 8hompson, p.!=, D


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What is to be accomplished?

(oals are developed after being filtered through a &W*8 analysis.

What are our specific, measurable targets?

Segment2#arget Market What customers are we targeting?

How should the firm differentiate and position itself in the target market? What should the business be doing?

What are the feasible strategic alternatives given the customer analysis?

Which alternatives best relates the company0s situation to e1ternal opportunities and threats?

Strategy 3 How to Achieve the #argeted ResultsWith these steps completed, we are now able to formulate a strategy to provide direction to the company.

A company0s strategy should be market-driven and customer-driven using outside-in strategic thinking

aimed at boosting customer satisfaction and achieving sustainable competitive advantage. 8he company

must study market trends, listen to customers, enhance the company0s competitiveness, and steer the

company in whatever new directions are dictated by market conditions and customer

preferences. revised 8hompson, p.!=$

A corporate planning director of a Kortune == )9 observes that 2the process of strategic marketing is

coming to be defined as the management of competitive advantage 7 that is, as process of identifying,

developing, and taking advantage of opportunities that result in a tangible business advantage.5 )eeting

these challenges re4uires developing market-driven strategies. 8he process involves becoming market-

oriented, matching customer value opportunities with organi/ation0s distinctive capabilities, and

developing internal and e1ternal strategic relationships. 8he basic initiative for guiding market-driven

strategy begins by developing a market-oriented culture and processes in the organi/ation5 +1cerpt from'

29ompetitive Advantage in the (lobal )arketplace' a Kocus on )arketing &trategy,5 by 8homas Hult,

Javid 9ravens, and >agdish &hethM >ournal of ;usiness Research, v!,


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Representative StrategiesA company0s competitive strategy consists of its business approaches and initiatives to attract customers

and fulfill their e1pectations, to withstand competitive pressures, and to strengthen its market

position 8hompson, p.!$. Having identified and evaluated its maBor competitors, the company must

design broad competitive marketing strategies by which it can gain competitive advantage by offering

superior customer value. 9ompetitive strategies have been classified to define marketing strategy interms of a single-minded pursuit of delivering superior value to customers.

An competitive advantage typically is based on'

!. lower costs


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cost to the customer. 8he company works to achieve the lowest costs of production and distribution so

that it can price lower than its competitors and win a large market share Fotler, p.C$.

8his strategy is aimed at achieving low-cost leadership industrywide. t is based on achieving a

sustainable cost advantage in some important element of the product or service Aaker, p.#$. A low-cost

provider is a powerful competitive approach in markets where many buyers are price sensitive. A low-cost

leader0s basis for competitive advantage is lower overall costs than competitors. &uccessful low-costleaders are e1ceptionally good at finding ways to drive costs out of their business 8hompson, p. !,

!$. +1. Jollar 8ree &tore, Walmart, Jell 9omputer

A low-cost leader has two options for achieving superior profit performance'

!. 8o use the lower-cost edge to under price competitors and attract price-sensitive buyers.


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1e,enses Against *ive +ompetitive *orces::orter, p., #$8he low-cost position protects the firm against all five competitive forces because bargaining can only

continue to erode profits until those of the ne1t most efficient competitor are eliminated.

Risks::orter, p.D$9ost leadership imposes severe burdens on the firm to keep up its position, which means reinvesting in

modern e4uipment, ruthlessly scrapping obsolete assets, avoiding product line proliferation and being

alert for technological improvement. &ome of these risks are'

8echnological breakthroughs can open up cost reductions for rivals that nullify a low-cost leader0s

past investments, learning, and gains in efficiency.

Low-cost learning by industry newcomers or followers, through imitation or through their ability to

invest in state-of-the-art facilities.

nability to see re4uired product or marketing change because of the attention placed on cost.

nflation in costs that narrow the firm0s ability to maintain enough of a price differential to offset

competitors0 approaches to differentiation.

(etting carried away with overly aggressively price-cutting and ending up with lower, rather than

higher, profitability.

ot emphasi/ing avenues of cost advantage that can be kept propriety. &ustaining its cost inways difficult for rivals to copy or match.

;ecoming too fi1ated on cost reduction. t can be pursued so /ealously that a firm0s offering ends

up being too frills-free to generate buyer appeal.

1i,,erentiation Strategy8his strategy concentrates on creating a highly differentiated productIservice line and marketing program

so that it is perceived to a broad spectrum of customers as being uni4ue. 8he company focuses on

superior performance by targeting an important customer benefit valued by a segment of market. )ost

customers would prefer to this productIservice line if its price is not too high Fotler, p.C$. +1. %ictoria

&ecret, )arriott, ;)

A differentiation strategy is one in which the product offering is differentiated from the competition by

providing value to the customer by product 4uality, perhaps by enhancing the performance, 4uality,prestige, features, service backup, reliability, or convenience of the product Aaker, p.,#$. t seeks to

differentiate the company0s productIservice offering from rivals0 in ways that will appeal to

buyers. 8hompson, p. !$.

&ustainable differentiation usually has to be linked to uni4ue internal skills, core competencies, and

capabilities. As a rule, differentiation yields a long-lasting and more profitable competitive edge when it is

based on new product innovation, technical superiority, product 4uality and reliability, and comprehensive

customer service. &uch attributes are widely perceived by buyers as having value 8hompson, p. !DC$


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8he competitive advantage for a differentiation strategy is either a productIservice offering whose

attributes differ significantly from the offerings of rivals or a set of capabilities for delivering customer

value. &uccessful differentiation strategy begins with a deep understanding of what customers need and

ends with building organi/ational capabilities to satisfy these needs better than rivals 8hompson, p.!D"-

!!$

1i,,erentiation strategies work .est in markets where: 8hompson, p.!


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8he cost differential between low-cost competitors and the differentiated firm becomes too great

for differentiation to hold brand loyalty. ;uyers thus sacrifice some of the features, services, or image

possessed by the differentiated firm for large cost savings.

*ver-differentiating so that price is too high relative to competitors or that the array of

differentiating attributes e1ceeds buyers0 needs

8rying to charge too high a price premium. 8he bigger the price differential the harder it is to keepbuyers from switching to lower-priced competitors. . ;uyers are satisfied with a basic product and don0t

think 2e1tra5 attributes are worth a higher price.

;uyers0 need for the differentiating factor falls.

8rying to differentiate on the basis of something that does not lower a buyer0s cost or enhance a

buyer0s well-being, as perceived by the buyer.

mitation narrows perceived differentiation. Rapid imitation means that a firm never achieves real

differentiation.

ot understanding or identifying what buyers consider as value.

*ocused Strategy8his strategy concentrates on a narrow market segment by offering niche customers a customi/ed

product or service that meets their tastes and re4uirements better than rivals0 offerings. 8he company

focuses on targeting an important customer benefit valued by a narrow segment of the market could be a

particular buyer group, segment of the product line, or geographic market$. t concentrates its effort on

serving a few market segments well rather than going after the whole market Fotler, p.C$. 8he entire

focus strategy is built around serving a particular target very well. +1. microbreweries, local bakeries, bed-

and-breakfast inns, bouti4ues

A focuser0s basis for competitive advantage is either

!. lower costs than competitors in serving the market niche


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Kocus involves yet another set of risks'

8he cost differential between broad-range competitors and the focused firm widens to eliminate

the cost advantages of serving a narrow target or to offset the differentiation achieved by focus.

8he differences in desired products or services between the strategic target and the market as a

whole narrows.

9ompetitors find submarkets with the strategic target and out focus the focuser.Stuck in the Middle Strategy8his is a losing strategy. Kirms that do not pursue a clear strategy , called middle-of-the-roaders, do the

worst. Jo not be stuck in the 2middle5 trying to be successful at all three disciplines, because your firm will

generally end up not being good at any one. ;usiness that do not stand out as the lowest in cost, highest

in perceived value, or best in serving some market segment encounter difficulties. +1. &ears, Holiday nn

Fotler, p.C$

Market5'ased &eneric Strategies8hese are similar to :orter0s competitive two strategies, but market-based in their development. )arket

strategy has two fundamental obBectives'

!. 8o create superior customer value. 8his is similar to achieving competitive advantage, but with a

different emphasis. 8he superior customer value perspective, also known as market orientation, focuses

everyone in the organi/ation on customers0 needs that than on competitors0 products, thereby helping the

business act rather than merely react.


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precisely segmenting its markets and then tailoring its products or services to match e1actly the needs of

targeted customers. t speciali/es in satisfying uni4ue customer needs through a close relationship with

and intimate knowledge of the customers. t builds detailed customer databases for segmenting and

targeting, and empowers its marketing people to respond 4uickly to customer needs. t serves customers

who are willing to pay a premium for a service, or special attention they receive Fotler, p.C$. +1.

Ama/on, Land0s +nd9ustomer intimate business focuses on understanding the customer and his perception of the value of the

product or service offered. Accompanying this orientation is a focus on the lifetime value of a relationship.

t costs only about one-fifth as much to make an additional sale to an e1isting customer as it does to

attract and sell to a new one. 8hus the concepts of 2customer e4uity5 and 2customer share5 instead of

market share are central to the customer intimacy business &later, p.C$

:roduct Leadership 7 8his strategy concentrates on creating an innovative productIservice line and

marketing program so that it is perceived to a broad spectrum of customers as being leading-edge

products or services. 8hey provide superior value by offering its customers a continuous stream of state-

of-the-art products or services. 8he company seeks to identify emerging opportunities and continuously

strive to develop and deliver new products. 8hey look for first mover advantages. t is open to new ideas,

relentlessly pursues new solutions, and works to reduce cycle times so that it can get new products to

market 4uickly &later, p.C, Fotler, p.C$. +1. &ony, )icrosoft, and ike

8hey key task for product leaders if to maintain an environment in which focused creativity can flourish. t

re4uires a culture that encourages e1perimentation and risk-taking, one in which wee-developed plans

that fail are often celebrated rather than punished. :roduct leaders usually work in multifunctional teams

to shorten response times and development cycles. 8hey recogni/e the importance of developing

platform technologies and products that become the foundation for future products &later, p."$.

8he basic differences among competitive strategies are'

!. whether a company0s market target is broad or narrow


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1i,,erentiation Strategy7 *perational$

8his strategy concentrates on creating a highly differentiated product or service line and marketing

program so that it is perceived to a broad spectrum of customers as being uni4ue. 8he company focuses

on superior performance by targeting an important customer benefit valued by a segment of market. )ost

customers would prefer to this productIservice line if its price is not too high.

%ictoria &ecret, )arriott, ;)7roduct 4eadership7 )arket Kocused$

8his strategy concentrates on creating an innovative productIservice line and marketing program so that it

is perceived to a broad spectrum of customers as being leading-edge products or services. 8hey provide

superior value by offering its customers a continuous stream of state-of-the-art products or services. 8he

company seeks to identify emerging opportunities and continuously strive to develop and deliver new

products.

&ony, )icrosoft, ike, >ohnson @ >ohnson

+ustomer:*ocused Strategy7 *perational$

8his strategy concentrates on a narrow market segment by offering niche customers a customi/ed

product or service that meets their tastes and re4uirements better than rivals0 offerings. 8he company

focuses on targeting an important customer benefit valued by a narrow segment of the market buyer

group, segment of the product line, or geographic market$. 8he entire focus strategy is built around

serving a particular target very well.

)icrobreweries, local bakeries, bed-and-breakfast inns, bouti4ues.

+ustomer Intimacy7 )arket Kocused$

8his strategy concentrates on a narrow market segment by a deep understanding of its customer and his

perception of the value of the product or service offered. 8he company provides superior value by

tailoring its products or services to match e1actly the needs of targeted customers. t speciali/es in

satisfying uni4ue customer needs through an intimate knowledge of the customers. t builds detailed

customer databases for segmenting and targeting, and empowers its marketing people to respond 4uickly

to customer needs.

Ama/on, Land0s +nd, 9able @ Wireless, Home Jepot

+RI#(RIA:

ow that you have a strategy for each customer group, make sure it is a winning strategy for your

company. A winning strategy must build a competitive advantage that can become sustainable, fits the

enterprise0s situation, and improves company performance. 8he following criteria are to be used as

thought proving 4uestions. t is not necessary for your strategy to meet all these criteria. However, they

are presented for your consideration.


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#ests o, a 0inning StrategyA winning strategy must build sustainable competitive advantage, fit the enterprise0s situation, and

improve company performance. 8ests can be used to evaluate the merits of one strategy over another

and to gauge how good a strategy is. 8he soundness of a competitive strategy depends on how well it

can satisfy the following tests' 8hompson, p.< and Jay, p.-#, D!$

Sustaina.le +ompetitive Advantage #estA good strategy leads to sustainable competitive advantage. 8he bigger the competitive edge that a

strategy helps build, the more powerful and effective it is.

Will the strategy create and maintain a competitive advantage through some combination of

lowest delivered costs, or superior customer value?

s there an effective match of core competencies with opportunities and threats?

s there a basis for a competitive advantage that is sustainable in light of probable competitivemoves?

Will the strategy put the business in a position to ward off known threats, e1ploit opportunities,

enhance current advantages, or provide new sources of advantages?

9an the strategy adapt to a broad range of foreseeable environments?

How difficult will it be for competitors to match, offset, or leapfrog the e1pected advantages?

Joes the strategy enhance the company0s competitive position for the long term?

Joes the build a company reputation and recogni/able industry position?


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#he &oodness o, *it #estA good strategy is tailored to fit the company0s internal and e1ternal situation. Without tight situational fit,

there0s real 4uestion whether a strategy appropriately matches the re4uirement for market success.

s the strategy vulnerable to unacceptable environmental and internal uncertainties?

9an these risks be managed or avoided?

Joes the strategy play aggressive offense to build competitive advantage and aggressivedefense to protect it?

7er,ormance #estA good strategy boosts company performance.

What are the gains in profitability?

What are the gains in the company0s competitive strength and long-term market position?

What are the prospects for successful implementation, feasibility, supportability, consistency?

+ompetitive Advantages 1o 1iminish&ource Jay, page


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n the following product-market matri1, four growth options are shown.

8o penetrate the e1isting product market. A firm may attempt to attract customers from

competitors or increase usage by e1isting customers.

8o :roduct e1pansion while remaining in the current market.

Apply the same products in new markets.

8o diversity into new product markets. %ertical integration adds another dimension to the product-matri1

Investment strategies

Kor each product market four investment options are possible'

(row 7 invest to grow or enter the product market.

)aintain 7 invest only to maintain the e1isting position.

)ilk 7 )ilk the business by minimi/ing investment.

Withdraw 7 recover as many of the assets as possible buy li4uidating or divesting the business.

*unctional Area Strategies

8he development of a business strategy involves coordination of various function area'

:roduct line strategy

:ricing strategy

Jistribution strategy

9ommunication messaging strategy

)anufacturing strategy

nformation technology strategy

&egmentation strategy

(lobal strategy

nternet strategy


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8he strategic assets or competencies that underlie the strategy and provide the sustainable competitive

advantage.

&trategy formulation must consider the cost and feasibility of generating or maintaining asset or

competencies that will provide the basis for a sustainable competitive advantage.

Strategic 7ositioning

&trategic positioning specifies how the business is to be perceived relative to its competitors and marketby its customers and employeesIpartners. t represents the essence of a business strategy Aakers$.

:ositioning is the way the productIservice is defined by consumers on important attributes. 8he place the

productIservice occupies in the consumer0s mind in relation to its competitors. F@A, p.


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A firm in an industry that serves small segments that other firms overlook or ignore. 8he firm knows the

target customer group so well that it meets their needs better than other firms that casually sell to this

niche. 8he nicher can charge a substantial markup over costs because of the added value. An ideal

market niche is big enough to be profitable and has growth potential.

;y customer, market, 4uality-price, service

)ultiple nichingAdditional +ompetitive StrategiesKirst-)over &trategiesI :reemptive &trategy 7 8hompson, p.!#=$ 7 A preemptive strategic move is the

pioneering implementation of a strategy into a business area that, because it is first, generates an asset

or competency that forms the basis of an sustainable competitive advantage. Kor a preemptive move to

create 2first-mover advantages,5 competitors must be inhibited pr prevented from duplicating or countering

it Aaker, p.#$.

Synergy Strategy - Aaker, p.C$ &ynergy strategy occurs when a business has an advantagebecause it is linked to another business within the same firm or division. 8he two businesses, may be able

to share a sales force, office, or warehouse and thus reduce costs or investment. 8hey may be able to

Bointly offer a customer a combination of coordinating products.

#actical Issues and 7rogram *ormulation&tudies have shown that a N increase in customer loyalty can produce profit increases up to

CN. :eppers @ Rogers (roup ewsletter 7 *ct.


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8actics are the specific actions that lead to implementing your strategies. 8he tactics are broken down in

to four areas product, price, promotion, distribution$ and will provide the framework for creating action

items to accomplish your strategic market obBectives of reaching your target market. 8ogether, they are a

set of tools that the firm blends to produce a response it wants in the target market. 8here are different

tactical positions for each functional area based on the selected strategy. 8he tactical positions reinforce

your strategy.*rom a product5,ocused approach! the ,our areas are de,ined as:

:roduct' 8he product or service you are offering to your target market

:rice' 8he amount of money customers have to pay to obtain your product.

:romotion' 8he activities that communicate the merits of the product and persuade target

customers.

Jistribution' 8he company0s activities that make the product available to target consumers.

*rom a customer5,ocused approach! the ,our areas are de,ined as:

9ustomer eed

9ustomer 9ost

9ommunication

9onvenience

+ach tactical area contains numerous considerations and issues firms need to be aware of, and

sometimes address, when implementing strategies. 8his section addresses the considerations at a high

level and is meant to provoke further research if an issue pertains to your company. We will provide you

with a list of resources for each area.

7roductWhat is a product? A product is anything that can be brought to the market, which will provide satisfaction.

A product is more than Bust a physical obBect, which is why we refer to a product as an offering. t includes

physical obBects, services, events, persons, places, organi/ations, ideas, and any combination of these.

Are you offering a product or a service?

What is your customer 2really buying5 when heIshe ac4uires your product?


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+onsiderations ,or product2service identi,icationWhy do consumers buy productsIservices?

Attributes- products are a 2bundle5 of attributes, which include 4uality, features, and style @

design.

;randing- some type of designation that identifies the market or seller. ;rand e4uity management

is critical for

:ackaging- it is used not Bust to contain the product, but has promotional value as well.

Labeling- at least product identification, but can e1tend to in-depth descriptions and promotion.

:roduct support services 7 activities that augment the actual product.

7roduct li,e5cycle strategies:roduct life-cycle 7 estimation of a product0s revenues and profits over the course of its life. 8his is

another 2tool5 to assist a marketer in productIservice strategies. :rovides a perspective to understand the

aspects of the product. 8he five stages are'

:roduct development begins when the company finds a new product. &ales are O= and heavyinvestment.

ntroduction provides a period of slow growth with none1istent profits due to e1tensive

promotional costs.

(rowth is a period of rapid market acceptance and developing profits.

)aturity is a period of slow growth, level profits, and increasing marketing e1penditures to defend

the product0s position against competitors.

Jecline is a period of falling sales and profits.

7ricingWhy is price important?

:rice is one of the maBor factors affecting buyer choice and needs to be cohesive with the strategy you

picked. :rice is the only element of the four tactics that produces revenues as the other areas represent

cost areas. 9ommon pricing mistakes include'

8oo cost-oriented rather than customer value-oriented.

ot revised often enough to reflect market changes.

ot taking the other tactics into consideration.

ot varying enough for different products in the mi1$, market segments, or purchase occasions.


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+onsiderations ,or 7ricing 1ecisions8here are both internal and e1ternal factors to consider when setting prices.

Internal ,actors include

Looking at your strategic market obBectives and associated goals

Looking at the benefits you are providing your customer. 9ustomers typically seek out products

and services that provide the best value in terms of benefits received. 9onsider your costs for 2production.5 9osts generally set the floor for pricing considerations.

Assess your company and decide who should set the price.

(6ternal ,actors include

Reviewing your &W*8 analysis. 8he nature of market demand will generally set the upper limit

for pricing considerations.

9onsidering how price sensitive your customers are.

o 9ustomer are not price sensitive when product is high in 4uality, prestige or e1clusiveness. &ubstitutes

are hard to find. :roduct price is low compared to customer0s income.

o 9ustomer are price sensitive when products are commodities, similar across companies, and the

market is flooded with substitutes.

:rices need to be set somewhere between product costs and market demand.

7ricing Strategies27lans

8here are three ways to look at pricing decisions !$ costs,


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Sales 7romotion7 &hort-term incentives to encourage trial or purchase of a product or service through

contests, games, premiums, samplings, trade shows, e1hibits, demonstrations, coupons, rebates, low-

interest financing, trade-in allowances, stamps

7u.lic Relations7 A variety of programs designed to promote andIor protect a company0s image or its

individual products through the use of press kits, speeches, seminars, annual reports, charitable donation,

sponsorships, publications, community relations, lobbying events.7ersonal Selling7 Kace-to-face interaction with one or more prospective purchasers for the purpose of

making sales by using sales presentations, sales meetings, incentive programs, samples, fairs and trade

shows.

Here are the si1 steps using the above tools to creating an effective communication plan.

&tep *ne 7 dentify the target audience. n this plan you determined the customer segments, which are

your target audience.

&tep 8wo 7 Jetermine the communication goals. 3our strategic market goals have been identified, but

you may consider adding a goal here that directly relates to this communications plan and segment.

&tep 8hree 7 Jesign the message. A good message gets a customer0s attention, holds interest, arouses

desire, and obtains action. A message must have content, structure, and a format.

&tep Kour 7 &elect the communication tools, as listed above.&tep Kive 7 dentify the message source. How is the message being communicated and is the source

credible for the message being delivered?

&tep &i1 7 +valuate the results. Jid the message have the intended impact on the target audience?

)easure the behavior of the target audience.

7romotion Strategies27lans8here are two basic promotion strategiesIplans'

1istri.ution27laceJistribution channels are ways and the process of making a product or service available to the customer.

Kor many years, distribution was not given much priority within company strategies. However, in the past

decade distribution decisions have risen in importance because channel activities impact all other

marketing and promotional activities. 9ompanies or people in your distribution channels in many

instances provide greater efficiency in making goods and services available to your target markets

because of contacts, e1perience, speciali/ation, and scale of operation.


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+onsiderations ,or 1istri.ution 1ecisions

9ompanies and people in your marketing channel perform many key functions. &ome help to complete

transactions through'

nformation 7 (athering and distributing market research and intelligence information about forces in the

marketing environment needed for planning and aiding e1change.

:romotion 7 Jeveloping and spreading persuasive communications about an offer or your company.9ontact 7 Kinding and communicating with your customers.

egotiation 7 Reaching an agreement on price andIor other terms of the offer so that ownership or

possession can be transferred.

:hysical distribution 7 8ransporting and storing goods

Kinancing 7 Ac4uiring and using funds to cover the costs of the distribution

&tructure follows strategy.

Alfred 9handler, >r.

8hose that implement the plans must make the plans.

:atrick Hagerty, 8e1as nstruments

A strategic plan will provide a business with the roadmap it needs to pursue a specific strategic direction

and set of performance obBectives. However, this is Bust a planM it does not guarantee that the desired

performance obBectives will be reached any more than having a roadmap guarantees the traveler will

arrive at the desired destination ;est, p.


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spent so much time, effort, and money for planning. According to a cover story in Kortune maga/ine, nine

out of ten organi/ations fail to do so due to the fact that' Faplan @ orton promotional brochures$

*nly N of the workforce understand their company0s strategy

*nly !N of e1ecutive teams spend more than one hour per month discussing strategy

*nly


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+hampion and $wnership #eam+ven though assigning individual responsibilities in the detailed action plan is a way to get people

involved in implementation, every successful strategic plan has a champion andIor ownership team. A

champion is a person who is devoted to the successful implementation of the strategy and plan. ;etter yet

is the creation of an ownership team, who can leverage the uni4ue talents of multiple people and e1ert

more organi/ational leverage than a single champion ;est, p.


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Joes the structure fit the culture?

7eopleRe4uired 9ompetencies and &kills of :eople

A strategy is generally based on an organi/ational competency that, in turn, is based on people. :eopleprofiles and their motivation provide the bases of competencies needed to support sustainable

competitive advantage. &trategies re4uire certain types of people Aakers, p.


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+nergi/ing personnel,

:romoting innovation,

+ncouraging responsiveness,

:romoting opportunism,

;uilding consensus.

Resource Allocation&uccessful implementation re4uires that the resources needed are fully committed to support

implementation of the strategic plan. &ufficient resources should be allocated with respect to personnel

and funding. f the resources needed are not systematically determined in the planning process, most

likely the plan will be underresourced. 8hus, you need to focus personnel and money toward effective

tactic implementation ;est, p.


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Jecentrali/ation places the business strategists close to the market and allows innovation with a

minimum of bureaucracy. However, the economies of scale and synergies across the organi/ation are

often difficult to achieve and inefficiencies and duplications are created.

Kunctional organi/ation 7 consists of units organi/ed by product or market.

)atri1 organi/ation 7 is one in which a manager reports to two or three other managers

responsible for the product line.'orderless $rganiation;orderless organi/ations find ways to bread down boundaries within the firm. 9ross-functional

management organi/es around missions that involve a variety of functions to communicate across

organi/ational units such as divisions or country operating units. %arious approaches include task forces,

best practices conference, and to set up coordination committees Aaker, p.


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In,ormation System8he information system and the technology, databases, and models on which it is based can affect

strategy. Kor e1ample, manufacturers and retailers are affected by information technology. ew systems

control inventory, ordering, pricing, and promotions. 8he ability to control information generated by retail

scanners can be key to their strategies.

8he following 4uestions will help you structure your thoughts and actions' Jo your personnel have all the information they need to effectively implement the strategy?

s customer information readily accessible to service personnel?

Jo salespeople have the proper promotional material to present the strategy effectively?

$perating System:olicies, procedures, information, and controls should support implementation. 8he following 4uestions

will help you focus on these support issues' 9ook, p.!=#$

:olicies and :rocedures 7 8o effectively implement the tactic, are there any policy changes

needed within the company?

&hould you drive down the organi/ation decision authority?

Jo you need to alter credit approval procedures to speed up order processing time?

&hould you strengthen 4uality control policies to drive towards /ero defects?

9ontrols 7 Jo your controls keep implementation on course and not slow it down? Jo your

control procedures facilitate customer satisfaction or hinder it? 9ook, p.!=#$

7lanning System:lans are nothing, planning is everything. +isenhower

A scheduled strategic planned time for is key. Workshops and retreats are often crucial elements in

dedicating 4uality time to planning. 9reative, out-of-the bo1 think, aided by formal creative-thinking

e1ercises is a vital part of any planning system.

:lanning should not be separated from the values, culture, and energy of the organi/ation.

According to Henry )int/berg 2)anagers with a committing style engage people in a Bourney. 8hey lead

in such a way that everyone on the Bourney helps shape its course.5 2&trategies only take on value ascommitted people infuse them with energy. 5 As a result enthusiasm builds. Aakers, p.


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t is important to create and nurture a strategy supportive work environment and corporate culture. 8he

reality is that people make a difference. )anagement has to create an environment that connects

employees to the organi/ation0s mission, and motivates their creativity, commitment and passion. Jobni,

p.D=!$. 8he most successful companies have almost cultlike cultures built around strong, market-oriented

missions. At companies such as Walmart, )icrosoft, Walt Jisney, employees share a strong

vision Fotler, p. #


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Adapting the 7lan8he strategic plan needs to be adaptive to survive changing or unanticipated conditions. Kactors that

contribute to the adaptive nature of the plan are adaptive roll-out, persistence, feedback metrics, and

continuous improvement ;est, p. =$.

Adaptive Roll5$ut

t is best to roll-out the marketing plan in a controlled manner to work out the kinks, both internally ande1ternally to ensure success. 8here are many benefits to a regional roll-out as opposed to a nationwide

launch' ;est, p.!$.

Kewer resources are re4uired in a small-scale regional launch than in a nationwide launch.

:roblems with distributors, marketing communications, and product positioning can more readily

be addressed and corrected on a small scale.

f the plan is more effective than planned, additions can be made to production capacity without

the potential of stockout and the loss of opportunities to capture customers.

Additional marketing insights will results that can be opportunistically integrated into the

marketing plan as full marketing plan implementation is pursued.

8he financial metrics generated from a successful roll-out signal long-run profit potential and can

be used to help fund the full introduction.

7ersistence&uccessful implementation re4uires a high degree of ownerImanagement persistence, particularly when

aspects of the strategic plan need to be modified. t is interesting to note that adaptive persistence has

been attributed to the success of many >apanese strategies. *ne of >apanese management0s greatest

assets is their inherent ability to adapt and persist throughout the implementation of the plan. 8hey remain

committed to the strategic obBectives and persist by adapting their plans. t is their determination to make

them work that underlies the secret of their market success ;est, p.=$.

*eed.ack MetricsAn essential element of any adaptive system is feedback. Fey process metrics that provide leading

signals as to the success of the strategic market and implementation include' 9ustomer awareness, interest, intentions to buy, trial, and repeat purchase.

ntermediary market coverage, interest, support, and motivation.

;usiness responsiveness to customer in4uiries and problems.

+ach of these market metrics has to reach an effective level of performance before financial metrics, such

as sales, market share, total contribution, and net profit can begin to perform ;est, p.=$.

8he importance of market metrics is twofold'

!. 8hey provide an early signal as to the progress of the marketing plan.


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Assessing 7lan ImplementationA good strategic plan, market strategy, and improved level of implantation effort will enable your business

to achieve a market success well beyond planned performance, and in a much shorter time than

e1pected. o one factor presented will make or break the successful implementation of the strategic plan.

However, when the sum of these factors is ade4uately addressed, the chances for successful

implementation are greatly improved ;est, p.!$.

Sustaining Implementationt is important to understand why some organi/ations have failed in attempts to develop sustainable

implementation conte1ts. 8hree primary reasons are'!. &trategies supporting a product or service focus product, price, promotion, place$ are no longer

the differentiators they used to be. 8hey have become generic and are easily copied.


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Implementation #echni;ues8he following are some helpful implementation techni4ues'

:ost-it :lanning :rocess

8he :ost-it :lanning process is a simple way to organi/e a complicated proBect into a comprehensive

strategy which anyone can follow. All you need are some small post-it notes and news print or a whiteboard.

!. dentify a goal or obBective to be accomplished.


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What resources do you have or will you need to carry out your plan?

What limitations or barriers do you face in carrying out your plan? Which of these barriers can be

weakened or eliminated?

What steps need to be taken according to what schedule to put your plan in action?

*ield #est and (valuate

*ne of the reasons for failure to reach goals is starting too big. ;egin by developing a trial run to test thevalidity of goals and action plans without e1hausting resources. Reasons to run a pilot proBect'

t allows the leader to test hisIher own ability in handling the proBect.

&mall wins will build confidence in ability to accomplish greater things.

&mall wins can be used to generate support for larger vision.

A pilot proBect can reveal where a plan needs adBusting in order to prevent failure.

A pilot proBect allows an idea to fail without total devastation to all involved.

+stablish standards to measure effectiveness' what to measure, how to measure, when to

measure.

(valuation a,ter ImplementingAfter every structured event, discuss what people learned. &imply ask three 4uestions and e1pect to get

different responses.

What Bust happened?

Why do you think it happened?

What can we learn from this?

#eam (valuationsmplementing a successful plan is a process which includes developing and maintaining good

relationships and individual growth toward personal goals. :rovide coaching and support for leaders.

9ontinue decision making and problem solving as you implement. +valuate periodically and make

adBustments &ome helpful keys to effective evaluations are the following'

&chedule evaluation times into your strategic planM otherwise, people may not slow down enough

to reflect upon their effectiveness. +veryone involved in the proBect needs to be included in the evaluation in some way. A thorough

evaluation will include evaluating the people involved as well as evaluating the process of the proBect.

othing replaces face to face communication whether that is in a group or one-on-one. 8imes of

evaluation can be very intense.

Kind ways to give people a break in the intensity as needed.

Re,lection ;uestions ,or evaluation are the ,ollowing:

What measurable progress has been made toward achieving your goals?

Have resources been ade4uately assessed? s the proBect within budget?

How are members of the team being cared for and being motivated? s an ade4uate effort being

made in each area?

How has each team member contributed toward the effort? s each person in their most effectiveposition?

How do the achievements reflect the vision and mission of the organi/ation?

What obstacles have been encountered? Are adBustments needed in the process?

How are people0s lives being changed for the better?

Are there others who need to 2buy in5 to the plan?

$.taining In,ormation A.out $rganiational +ompontentsAakers, p.


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What are the skills, knowledge, and e1perience of the firm0s employees?

What is their depth and 4uality?

What are the employees0 e1pectations?

What are their attitudes toward the firm and their Bobs?

Structure

What is the organi/ation0s structure? How decentrali/ed is it? What are the lines of authority and communication?

What are the roles of task forces, committees, or similar mechanisms?

Systems

How are budgets set?

What is the nature of the planning system?

What are the key measures used to evaluate performance?

How does the accounting system work?

How do product and information flow?

+ulture

Are their shared values that are visible and accepted?

What are these shared values and how are they communicated? What are the norms of behavior?

What are the significant symbols and symbolic activities?

What is the dominant management style?

Strategy

Where would the new strategy f it into the organi/ation?

Would the new strategy fit into the strategic plan and be ade4uately funded?

Would the systems and culture support the new strategy?

What organi/ational changes would be re4uired for the new strategy to succeed?

What impact would these changes have? Are they feasible?

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