3. Business Strategies and Their Marketing Implications New Products Strategy fit Corporate How to compete SBUs Market Allocate resources and efforts for SBUs sake Profile Strategy SBUs 60,000 products 6 Major Sectors Alliances to expand New products in current and new markets Tapes sector to maintain leadership and gain more profits, more sales force and less ads Drug sector spend more on R&D and ads 3.1 Strategic Decisions at the Business-Unit Level Corporate Level Mission SBU Level Scope Objective SBU Objectives Marketing Level Competition Plan Resources Deployment Ideal 3.1.1 How Should Strategic Business Units Be Designed? Homogenous Markets & Limited techs NO 2 SBUs compete on same customers with same products Authority over success factors Responsible for profitability Practical Technical compatibility Same customer needs Same customer behaviour 3.1.2 Business-Unit Objectives SBUs/Products Subobjectives Stable High profitability New High ROI High share ROI is not the important now 3.1.3 Allocating Resources within the Business Unit Resources between markets?? Portfolio Value-based planning Use activitybased costing system 3.2 How Do Businesses Compete? SBU core competencies and resources Customers characteristics Industry Characteristics Competitive Advantage 3.2.1 Generic Business-Level Competitive Strategies Cost Differentiation Focus (Effective Operation) Design, service (little piece) 3.2.1 Generic Business-Level Competitive Strategies Analyzer Prospector Defender Focus on growth through the development of new products and markets Maintaining their positions in established productmarkets Attempts to maintain a strong position in its core productmarket(s) Also seeks to expand into new– usually closely related – product-markets Reactor No clearly define strategy 3.2.1 Generic Business-Level Competitive Strategies 3.2.2 Do the Same Competitive Strategies Work for Singl