Strategy

Strategy

The alignment of your processes, resources, and organizational structure to maximize benefits to various stakeholders

StrategyStakeholders

stockholders customers employees suppliers

StrategyProcesses

Identifying and reengineering work flows

TQM and just-in-time inventory systems

Building bridges through the use of cross-functional teams

StrategyResources

CapitalLaborMaterialsMachinesInformationFacilities

StrategyOrganizational Structure

Functional structure Product/brand management

structureMatrix structureEtc.

Functional ApproachDepartments based on similar skills and resource use.

CEOCEO

VPVPFinanceFinance

VPVPProductionProduction

VPVPMarketingMarketing

PRODUCT MANAGER ORGANIZATION

M ark e tin g R esearch S a les A d vertis in g

P rod u c t M an ag erP rod u c t A

P rod u c t M an ag erP rod u c t B

P rod u c t M an ag erP rod u c t C

G rou p P rod u c tM an ag ers

M ark e t in g vice -p res id en t/d irec tor

EngineeringManager

ProductionManager

MarketingManager

QualityManager

757Project Mgr

767Project Mgr

737Project Mgr

747Project Mgr

Matrix Organization

StrategyCorporate strategy

Business-unit strategy

Functional strategy (product-market entry) Marketing plans and strategies primarily

focus on this level

Strategic business units Strategic business unit:

An entity that can be separated for planning purposes

Has its own set of customersHas its own set of competitorsHas a manager who is responsible

for the unit

Corporate StrategyMission

Product-oriented vs. market-oriented

Functions to be performed

Social responsibility issues

Corporate Strategy Corporate objectives

Profitability ROI Return on shareholder’s equity $ profit etc.

Discounted cash flowMarket share Etc.

Corporate Development Strategy

Current Markets

New Markets

Current Products

New Products

Market

Penetration

Market Development

Product Development

Diversification

Corporate StrategyCorporate development strategy

Market penetrationMarket developmentProduct developmentDiversification

forward integration backward integration related (concentric) diversification unrelated (conglomerate) diversification

Corporate StrategyResource allocation

Boston Consulting Group model (Boyd, Walker & Larreche, pp. 41, 42)

Industry attractiveness -- business position matrix (General Electric model) (Boyd, Walker & Larreche, p. 44)

BCG Matrix

Market Growth Rate

Relative Market Share

StarsQuestion Marks

Cash Cows

Dogs

Industry Attractiveness—Business Position Matrix

Com

p etit

ive

posi

ti on

High

Medium

Low

Industry AttractivenessHigh Medium Low

1 1

1

2

2

2

3

3 3

Strategic business units Strategy formulation

(Porter’s typology)Overall cost leadership

broad focus narrow focus

Differentiation broad focus narrow focus

Porter’s Typology

Cost Leadership

Differentiation

Narrow Focus

Broad Focus

Functional (product-market) strategy:The marketing mix (4Ps)Product Price Place Promotion

advertising personal selling sales promotion publicity

Value creation & delivery

Choose the value

Provide the value

Communicate the value

Value creation & deliveryChoose the value

Segmentation

Targeting

Positioning

Value creation & deliveryProvide the value

Product & service developmentPricingSourcingManufacturingDistributingServicing

Value creation & deliveryCommunicate the value

Sales forceSales promotionAdvertisingPublicity