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2. Corporate Strategies and Their Marketing Implications • Premium Prices and quality Glory Days • Biggest share of corporate, R&D and sales excellent resources • Internet and Intranet reduced the demand for mainframes Troubles • Dell solutions of tailored equipment and services • Moving away from the creation of the technology to the application of the technology Mission • Our Business: e-business engineering, software, and outsourcing services. Statement • 50% of R&D budget for internet software development Strategy
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2.1.2 Does Being Market-Oriented Pay? Customer Focus Profitability Cross Functions Marketing Concept
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2.1.3 Factors That Mediate Marketing’s Strategic Role Factors Exceptional Industry or Competitive market Inertia of past Conditions development successful startegy phase
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2.1.3.1 Competitive Factors Affecting a Firm’s Market Orientation Marketing Oriented Maturity Capacity Growth Sales Oriented Product Oriented New Entrants Few Competitors
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2.1.3.2 The Influence of Different Stages of Development across Industries and Global Markets Global Industry
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2.2 Three Levels of Strategy: Similar Components But Different Issues What are strategies How they implemented over an org
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2.2.1 Strategy: A Definition A strategy is a fundamental pattern of present and planned objectives, resource deployments, and interactions of an organisation with markets, competitors, and other environmental factors. What Where How Objectives To focus To implement
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2.2.2 The Components of Strategy Synergy Objectives Sustain Resources When the firm’s Scope Competitive Deployment businesses, Number and types KPIs as volume Advantage product-markets, of industries, growth, profit Position to develop Deciding how resource product lines, and contribution, or and sustain resources are to deployments, and market segments return on advantage be obtained and competencies investment competitors? allocated reinforce one another
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2.2.3 The Hierarchy of Strategies Strategies Corporate Business Function Scope Scope Scope Objectives Objectives Objectives Resources Resources Resources Competitive Competitive Competitive Edge Edge Edge Synergy Synergy Synergy
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2.2.4 Corporate Strategy • Domain:What businesses should we be in? Scope • Development:Acquisitions, conglomerates … etc. • Overall corporate objectives such as : Revenue growth, Profitability , ROI, Targets Earnings per share and Contributions to other stakeholders • Allocation among businesses in the corporate portfolio Resources • Allocation across functions shared by multiple businesses (corporate R&D, MIS) • More corporate R&D; better organisational processes or synergies relative to Edge competitors across all industries • Shared resources, technologies or functional competencies across businesses Synergy within the firm
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2.2.5 Business-Level Strategy • Domain:‘Which product markets should we be in within this business or industry?’ • Development : Concentric diversification (new products for existing customers or new customers for Scope existing products) • Constrained by corporate goals • Objectives aggregated across product-market entries in the business unit: – Sales growth, New product or Targets market growth, Profitability, ROI, Cash flow and Strengthening bases of competitive advantage • Allocation among product-market entries in the business unit Resources • Allocation across functional departments within the business unit • Primarily through competitive strategy; business unit’s competencies relative to competitors in its industry Edge • Shared resources (including favourable customer image) or functional competencies across product market within an industry Synergy
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2.2.6 Marketing Strategy • Domain:Target market definition, Product-line depth and breadth, and Branding policies Scope • Development: Product-market development plan , Line extension and product elimination plans • Constrained by corporate and business goals • Objectives for a specific market-product entry: Sales, market share, contribution margin, and Targets customer satisfaction • Allocation across components of the marketing plan (elements of the marketing mix) for a specific Resources product-market entry • Primarily through effective product positioning; superiority on one or more components of the Edge marketing mix relative to competitors within a specific product market • Shared marketing resources, competencies or activities across product-market entries Synergy
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2.3 The Marketing Implications of Corporate Strategy Decisions Corporate Strategic Decisions Objectives & Means for gaining Allocation of Scope & Mission Goals a competitive Future Growth corporate advantage resources
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2.3.1 Corporate Scope – Defining the Firm’s Mission To provide a useful sense of direction, a corporate mission statement should clearly define the organisation’s strategic scope. What is our business? Who are our customers? What kinds of value can we provide to these customers? What should our business be in the future?
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2.3.1.1 Market Influences on the Corporate Mission Internal Resources Competencies Values Value for customers Market Advantage Threats over competitors Environment Mission Synergy Opportunities across its products
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2.3.1.3 Social Values and Ethical Principles Formal Stated Ethics 66% of USA More proactive firm have than low
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