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Technical Inputs Workshop on Choosing Market Growth Strategies 2) Workshop on Choosing Priority Strategies and Initiatives. Technical Input for the Workshop on Choosing Market Growth Strategies. 2. Characteristics: - PowerPoint PPT Presentation
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1
Technical InputsTechnical Inputs
1)1)Workshop on Choosing Market Workshop on Choosing Market Growth StrategiesGrowth Strategies
2) Workshop on Choosing Priority 2) Workshop on Choosing Priority Strategies and InitiativesStrategies and Initiatives
2
Technical Input for theTechnical Input for the
Workshop onWorkshop on
Choosing Market Growth StrategiesChoosing Market Growth Strategies
Initial Market Phase I
T I M E
Characteristics:1st MFI/MFIs begin lending;Use similar methodology; similar products; Few overall borrowers in the marketBorrowers are very timid
Market Dev.Phase II
Market Expansion
Phase III
Market SaturationPhase IV
Characteristics:No. of MFIs grows; No. of borrowers grows; Additional products begin to emerge; Clients mostly loyal or feel they have few other options
Characteristics:Borrowers have more choices & exercise choice; multiple loans; delinquency becomes a problem;New & innovative products begin to emerge; Some MFIs introduce with new lending technologies
Characteristics:Market offers a range of products tailored for specific MF market segments; A range of lending methodologies; More competition; clients have more choices; multiple borrowings;PAR problems may become more serious; Price competition; More wholesalers offer funds to retailers
Workshop on Market Phase1. Participants group by branch or area of operations. 2. Based on the market phase characteristics, each
group will identify the market phase the branch finds itself in.
3. With inputs from the account officers, identify all the competitors in the market. Then, narrow the competitors to the major ones that the branch competes with head-on.
4. Write group outputs in a piece of Manila paper for presentation.
Strategic Choices & Risks Factor
A.Penetration
65%
B. New Product Development
30%
C. Market Extension
45%
D.Diversification
15%
Existing
MARKETS
New
Existing PRODUCTS New
Source: Peter Cheverton, Key Marketing Skills, 2nd Edition, Kogan Page, 2004
Note: % in red refers to rate of success.
9 Ways to Build Demand –Strategic Choices
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P R O D U C T S
Existing Modified New
M
A
R
K
E
T
Existing Sell more of existing products to our existing types of customers(Market Penetration)
Modify current products and sell more of them to our existing customers (Product Modification)
Design new products that will appeal to existing customers (New Product Dev.)
Geographical Enter and sell our products in other geographic areas (Geographic expansion)
Offer and sell modified products to new geographical markets
Design new products for prospects in new geographic areas
New Sell our existing products to new types of customers (Segment Invasion)
Offer and sell modified products to new types of customers
Design new products to sell to new customers (Diversification)
Source: Philip Kotler, International Marketing Guru & Professor, Kellog School of Mgmt, Northwestern University, Illinois
Matrix of Strategies, Conditions &Market Research Tools
Strategies Requirements Market Research Tools
Market Penetration There is still an un-served market Product offering is superior to attract served
market Ability to modify and enhance product to respond
to market needs
Usage, Awareness and Image (UAI)
Study Focus Group Discussion Competitors analysisCustomer Tracking System Customer Satisfaction Survey
Market Extension There is still an un-served market Product offering is superior to attract served
market Capacity of the existing distribution channel/ or
putting up additional distribution channel Ability to modify product to respond to the market
needs in the expansion area
Secondary Market Data Analysis and
Market Survey Focus Group Discussion Competitors analysis
New Product Development Existing clients have a need for new financial services or solutions Bank has the ability to design and pilot-test
Market SurveyFocus Group Discussion
Diversification A new market or customer segment that is untapped but shows growth potential when pursued by the bank
Rapid Market AppraisalMarket Survey Focus Group Discussion
Workshop on Strategies Bank Will Pursue
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ProductExisting Modified New
M
A
R
K
E
T
Existing (Market Penetration) (Product Modification)
(New Product Development)
Geographic-ally Modified
(Geographic expansion)
New (Segment Invasion) (Diversification)
Group Outputs on Strategies to Pursue
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Product
Existing Modified New
M
A
R
K
E
T
Existing (Market Penetration)
Example: Branch A, Branch C, Branch F
(Product Modification)
Branch A, B, C, D, F, G
(New Product Development)
Micro Agri loan – Branch A, D, E
Educational loan – Branch B, E
Geographic-ally Modified
(Geographic expansion)
Branch A, C, G, F
New (Segment Invasion)
Branch C, E,
(Diversification)
Pawn lending – Branch B, C, D
The Question Is:Which of the strategies should be prioritized? To answer the question, there are a few matters to consider.
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Technical Inputs Technical Inputs On Choosing the Priority On Choosing the Priority Strategies and InitiativesStrategies and Initiatives
Three Key Questions What should we do? Why should we do It? Can we do it?
What Should We Do?
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MF Growth Strategy
2007 – 2009
Introduce a new loan products to existing clients?
Exploit new distribution channels?
Form alliance with other institutions or insurance co.?
Introduce new loan products to new markets
segments?
? ? ?
Move upmarket to target bigger customers?
Expand branch network to new region?
1. What’s my strategic growth objective?
2. How do I assess competing opportunities?
S T R A T E G I Z I N G
Why Should We Do It?
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• Increase efficiency?• Improve distribution?• Improve cost-effectiveness?• Expand markets?• Improve income?
Why This Technology?
Why This Product Innovation?
• Respond to client needs?• Increase Client Retention?• Remain competitive?• Fill market gap?• Expand markets?• Improve Income?
But Before You Get There… Key Preparation Steps
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Planning the Planning the Product IntroductionProduct Introduction
Planning the Planning the Product IntroductionProduct Introduction
Implementing the Implementing the New ProductNew Product
Implementing the Implementing the New ProductNew Product
Integrating the Integrating the ProductProduct
Integrating the Integrating the ProductProduct
Change
Process
Guided
by
Vision
and
Strategy
Change
Process
Guided
by
Vision
and
Strategy
Consistent CommunicationConsistent Communication
What should we
do: choosing the
right innovation
Why should we do it: clarifying
goals
Can we do it:
assessing capabilities
and competitors
A Three-Step Process as You Introduce a New Product or Technology
Conduct client segmentation Assess demand for new
product among current and potential clientele
Design a product responsive to the targeted segment’s characteristics
Prepare financial forecast Assess implications of a new
product’s introduction on key institutional dimensions.
Assess the readiness of the organization
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Change
Process
Guided
by
Vision
and
Strategy
Change
Process
Guided
by
Vision
and
Strategy
Planning the Product Planning the Product IntroductionIntroduction
Planning the Product Planning the Product IntroductionIntroduction
Implementing the Implementing the New ProductNew Product
Implementing the Implementing the New ProductNew Product
Integrating the ProductIntegrating the ProductIntegrating the ProductIntegrating the Product Pilot test On the basis of
the pilot, make relevant adjustments in product design, systems, processes and procedures
Roll out
Track progress Align
organization Capture
learning Transform
cultureConsistent CommunicationConsistent Communication
Can We Do It?
Position B with Advantage Z
Position B with Advantage Z
Position A with Advantage Y
Position A with Advantage Y
Understand Your Industry
Research Your Customers
Assess Your Capabilities
Analyze Your Competitors
Make StrategicChoice
Or . . .
• Who participates in our industry?
• What does the industry look like now? How attractive is it?
• How is the industry changing?
• How big is our potential market, and how saturated is it?
• Who are our customers?
• What do our customers value?
• How well are we serving them now?
• What else do they need?
• What capabilities do we need to reach and serve our chosen customers?
• How do our capabilities stack up against those of other MFI’s?
• How do our costs stack up against those of other MFI’s?
• Who are our primary competitors?
• Which customers are they serving?
• How are they serving customers, and how well?
Assessing internal capabilities, customer demands, competitors and the industry
Workshop on Prioritizing Strategies From the choices shown in the last Workshop
Output, discuss and agree which ones the bank should designate as Priorities, ranked as 1st, 2nd, 3rd, etc.
For each of the top 3 priorities, discuss the objectives.
And assess whether the bank has the capability to do each of these 3 priorities, and what adjustments are needed in order to do so.