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3. Business Strategies and Their Marketing Implications • 60,000 products • New Products • 6 Major Sectors Corporate Profile • Alliances to expand • How to compete • New products in current and new SBUs Strategy markets Strategy fit • Tapes sector to maintain leadership and • Allocate resources gain more profits, more sales force and and efforts for less ads Market SBUs sake SBUs • Drug sector spend more on R&D and ads
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3.1 Strategic Decisions at the Business-Unit Level Corporate Level SBU Level Mission Scope Marketing Level Competition Plan Resources Objective SBU Deployment Objectives
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3.1.1 How Should Strategic Business Units Be Designed? NO 2 SBUs IdealHomogenousMarkets & same customerscompete on Authority over Responsible for Limited techs with same success factors profitability products Practical Technical compatibility Same customer needs Same customer behaviour
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3.1.2 Business-Unit Objectives SBUs/ Products Sub- objectives Stable New High High ROI High share ROI is not the profitability important now
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3.1.3 Allocating Resources within the Business Unit Resources between markets?? Portfolio Value-based planning Use activity- based costing system
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3.2 How Do Businesses Compete? SBU core Customers Industry Competitive competencies and characteristics Characteristics Advantage resources
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3.2.1 Generic Business-Level Competitive Strategies Cost Differentiation Focus (Effective Operation) Design, service (little piece)
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3.2.1 Generic Business-Level Competitive Strategies Analyzer Prospector Defender Attempts to maintain a strong position in its Reactor Focus on growth Maintaining their core product- through the positions in market(s) No clearly define development of new established product- Also seeks to expand strategy. products and markets markets into new– usually closely related – product-markets
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3.2.2 Do the Same Competitive Strategies Work for Single-Business Firms and Start-ups? Yes Same set of generic competitive strategies is just as appropriate for small firms as for business units within larger ones BUTthere are differences Marketing and business strategies blur and comes as one By definition start-ups do not have an established market position to defend, they begin as prospectors
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3.2.3 Do the Same Competitive Strategies Work for Service Businesses? Yes AMEX tailored to specific segments of the firm’s credit-card holders Others focus narrowly on defending established positions in current markets Cable &Wireless is considered as differentiated analyzer.
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3.2.4 Do the Same Competitive Strategies Work for Global Competitors? Analyser Defend in home and foreign well-established markets and prospect in new markets This suggests that a single SBU may need to engage in different functional activities Adopt different organisational structures to implement those activities Huawei works as defender in China and prospector outside
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3.2.5 Will the Internet Change Everything? Yes Price differentiations ,but is not the only thing Innovation will increase at prime prices Excellent communication tool for segments Personalization and customization, such as logistical alliances among organisational buyers and their suppliers Price Innovation Communication Personalization
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3.3 How Do Competitive Strategies Differ from One another? Scope Objectives Competitive Resources Synergy
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3.3.2 Differences in Goals and Objectives Effectiveness Efficiency Adaptability Sales Growth Profitability & New successful ROI products
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3.4 Deciding When a Strategy Is Appropriate: The Fit between Business Strategies and the Environment Prospector Analyser Low cost Differentiated Defender Defender Market Newborn Some still Mature or Mature or decline decline Tech. Undeveloped Basic Developed Fully developed Fully developed Business Strong R&D Good R&D but Process Sources supply Relative not the best engineering and process Strengths and quality engineering to control and/or in make lower cost marketing, sales, than competitors distribution or customer services. Competition Few Many but shaky Few well Few well established ones established ones
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3.4.1 Appropriate Conditions for a Prospector Strategy Market • New products and or/ shifting customer needs Relative Strengths • R&D • Marketing Research Competition • Few competitors Technology • New on, with many undeveloped applications
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