Upload
linda-gorchels
View
106
Download
0
Tags:
Embed Size (px)
DESCRIPTION
General introduction to market-based strategic thinking and planning.
Citation preview
Strategic Market‐Based PlanningUniversity of Wisconsin Executive Education
1http://exed.wisc.edu/marketing/ © Linda Gorchels 2002‐2009
Strategic Market-Based Planning
Linda GorchelsDirector, Executive Marketing Programs
University of WisconsinUniversity of Wisconsin--MadisonMadisonExecutive EducationExecutive Education
UW Fluno Center for Executive [email protected]
(608) 441-7336
What Is Strategy?
• Strategy is a long-term plan of action to hi ti l lachieve a particular goal.
– Typical business goals include growth, market dominance, efficiency, etc.
• Strategy is sometimes viewed as the plan taken to win a war whereas tactics are the
University of WisconsinUniversity of Wisconsin--MadisonMadisonExecutive EducationExecutive Education
© Linda Gorchels 2002-2009
actions taken to win a battle.
Strategic Market‐Based PlanningUniversity of Wisconsin Executive Education
2http://exed.wisc.edu/marketing/ © Linda Gorchels 2002‐2009
How long is “long-term?”
• It varies by company and industry. H h id liHowever, here are some guidelines.– product: 2-3 years– business unit: 3-5 years– company: 5-10 years– industry: 8-10 years or more
University of WisconsinUniversity of Wisconsin--MadisonMadisonExecutive EducationExecutive Education
© Linda Gorchels 2002-2009
industry: 8 10 years or more
Growth Strategies
C t St t i
Inorganic growthMergers acquisitions etc Corporate Strategies
Business Strategies
Product/Service Strategies
Mergers, acquisitions, etc.
Product/Service Strategies
Field strategies
Organic growthProduct development,
increased sales© Linda Gorchels 2002-2009
Strategic Market‐Based PlanningUniversity of Wisconsin Executive Education
3http://exed.wisc.edu/marketing/ © Linda Gorchels 2002‐2009
Corporate Strategies Business Strategies Field Strategies
Core mission, vision, values
Mergers, acquisitions, divestitures
Strategic market alignment
Organizational structure
Product line acquisition
Operational strategies
New product development
Channel redesign
Functional strategies
University of WisconsinUniversity of Wisconsin--MadisonMadisonExecutive EducationExecutive Education
© Linda Gorchels 2002-2009
Account selection
Lead generation
Selling, account management
Fulfillment
Sales support & service
What is “market-based” strategy?
• It is strategy that gives a balanced (or greater) emphasis on the externalgreater) emphasis on the external compared with the internal.
• It implies an obsession on creating and delivering customer value – but in a long-term sustainable way.St t i k t t b d i
University of WisconsinUniversity of Wisconsin--MadisonMadisonExecutive EducationExecutive Education
© Linda Gorchels 2002-2009
• Strategic marketers must be domain spanners.
Strategic Market‐Based PlanningUniversity of Wisconsin Executive Education
4http://exed.wisc.edu/marketing/ © Linda Gorchels 2002‐2009
Why is it important?
• “The demand from CEOs is for foresight rather than hindsight, for innovators, not tacticians, and for marketing strategists, not marketing planners.”
• “In fact, most of the traditional activities under the control of marketing, such as market research, advertising, and promotions, are
University of WisconsinUniversity of Wisconsin--MadisonMadisonExecutive EducationExecutive Education
© Linda Gorchels 2002-2009
, g, p ,perhaps the least important elements in creating customer value.”
Nirmalya Kumar, Marketing as Strategy (Harvard Press, 2004)
• “Leadership and management are two distinctive and l t t f ti M t icomplementary systems of action. Management is
about coping with complexity. Leadership is about coping with change. Leadership complements management; it doesn’t replace it. Companies manage complexity by planning & budgeting, by controlling & problem solving. By contrast, leading an
i ti b i b tti di ti li i
University of WisconsinUniversity of Wisconsin--MadisonMadisonExecutive EducationExecutive Education
© Linda Gorchels 2002-2009
organization begins by setting direction, aligning people to the direction, and inspiring people to achieve a vision.”
» John P. Kotter
Strategic Market‐Based PlanningUniversity of Wisconsin Executive Education
5http://exed.wisc.edu/marketing/ © Linda Gorchels 2002‐2009
What Really Works (according to HBR)
• “Most of the management tools and techniques we studied had no direct causaltechniques we studied had no direct causal relationship to superior business performance. What does matter, it turns out, is having a strong grasp of the basics. Without exception, companies that outperformed their industry peers excelled at
h t ll th f i t
University of WisconsinUniversity of Wisconsin--MadisonMadisonExecutive EducationExecutive Education
© Linda Gorchels 2002-2009
what we call the four primary management practices – strategy, execution, culture, and structure.”
– “What Really Works” (Nohria, Joyce, Robertson), Harvard Business Review, July 2003, pp. 43
Strategic market-based planning
• Day 1: Laying the d k
• Day 3: Implementation G id ligroundwork
– Environmental scanning– Preparing for strategic
leadership– Strategy philosophies
• Day 2: Developing
Guidelines– Aligning the organization– Establishing connections– Managing change
University of WisconsinUniversity of Wisconsin--MadisonMadisonExecutive EducationExecutive Education
© Linda Gorchels 2002-2009
y p gstrategy– Company evaluation– Strategic growth options
Strategic Market‐Based PlanningUniversity of Wisconsin Executive Education
6http://exed.wisc.edu/marketing/ © Linda Gorchels 2002‐2009
Strategy FrameworkMission, values &
visionInternal & external
Environmental Scan inputStrategic
leadership
Strategic goals
Market “fit”Industries, countries
& segments
Where to compete
Resources, competencies
Products, services& solutions
How to competeEnvironment
University of WisconsinUniversity of Wisconsin--MadisonMadisonExecutive EducationExecutive Education
© Linda Gorchels 2002-2009
Value creation Value creation
Framework, policies & inspiration for implementation
through business plans
Stage one: Laying the groundworkLinda Gorchels
University of WisconsinUniversity of Wisconsin--MadisonMadisonExecutive EducationExecutive Education
UW-Madison Executive [email protected]
(608) 441-7336
Strategic Market‐Based PlanningUniversity of Wisconsin Executive Education
7http://exed.wisc.edu/marketing/ © Linda Gorchels 2002‐2009
Laying the groundwork
1. Environmental scanning• Working through a 4-step process
2. Preparing for strategic leadership• Understanding how cultures affect change
3. Strategy philosophiesCoalescing different approaches
University of WisconsinUniversity of Wisconsin--MadisonMadisonExecutive EducationExecutive Education
© Linda Gorchels 2002-2009
• Coalescing different approaches
One …
Environmental scanningg
University of WisconsinUniversity of Wisconsin--MadisonMadisonExecutive EducationExecutive Education
© Linda Gorchels 2002-2009
http://www.youtube.com/watch?v=8jWujAmLjS4&feature=fvsthttp://www.albinoblacksheep.com/flash/epic
Strategic Market‐Based PlanningUniversity of Wisconsin Executive Education
8http://exed.wisc.edu/marketing/ © Linda Gorchels 2002‐2009
Environmental scanning process
• Scan: search primary and secondary data f l (i d ksources for external (industry, market,
economy, etc.) and internal (company) issues that might affect your company
• Monitor: track absolute and relative changes on an ongoing basis
University of WisconsinUniversity of Wisconsin--MadisonMadisonExecutive EducationExecutive Education
© Linda Gorchels 2002-2009
• Forecast: predict future directions of change or window of opportunity
• Assess: evaluate strategy implications
SCAN
• A good starting point could be a traditional SWOT (strengths, weaknesses, opportunities & threats) analysis
• Strengths and weaknesses refer to internal variables O t iti d th t f t t l
University of WisconsinUniversity of Wisconsin--MadisonMadisonExecutive EducationExecutive Education
© Linda Gorchels 2002-2009
• Opportunities and threats refer to external variables
• (See appendix for a SWOT primer)
Strategic Market‐Based PlanningUniversity of Wisconsin Executive Education
9http://exed.wisc.edu/marketing/ © Linda Gorchels 2002‐2009
Rate internal SW
• Look for competences, capabilities, resources and assets that satisfy the DIVEresources and assets that satisfy the DIVEcriteria:– Durable– Inimitable/non-substitutable– Valuable
E ploitable
University of WisconsinUniversity of Wisconsin--MadisonMadisonExecutive EducationExecutive Education
© Linda Gorchels 2002-2009
– Exploitable
What competence or capability drives each of the following?
• Honda: engines
• 3M:
• Kimberly-Clark:
polymer chemistry adhesives
paper mills
University of WisconsinUniversity of Wisconsin--MadisonMadisonExecutive EducationExecutive Education
© Linda Gorchels 2002-2009
be y C a
• Proctor & Gamble: consumer marketing
Strategic Market‐Based PlanningUniversity of Wisconsin Executive Education
10http://exed.wisc.edu/marketing/ © Linda Gorchels 2002‐2009
Canon
Understanding competencies
CanonOptics and lens grinding
University of WisconsinUniversity of Wisconsin--MadisonMadisonExecutive EducationExecutive Education
© Linda Gorchels 2002-2009
Photo-lithography
Cameras Copiers
Source: Michel Robert, Strategy, Pure & Simple (NY: McGraw-Hill) pp. 78-82
Honda
Understanding competencies
Multilevel cylinder heads with self-adjusting valves
Power
University of WisconsinUniversity of Wisconsin--MadisonMadisonExecutive EducationExecutive Education
© Linda Gorchels 2002-2009
Motorcycles Cars Lawn mowers
Power generation equipment
Source: Michel Robert, Strategy, Pure & Simple (NY: McGraw-Hill) pp. 78-82
Strategic Market‐Based PlanningUniversity of Wisconsin Executive Education
11http://exed.wisc.edu/marketing/ © Linda Gorchels 2002‐2009
3M
Understanding competencies
Polymer chemistry
Coatings Adhesives
Overhead Floppy Post-it Electrical
University of WisconsinUniversity of Wisconsin--MadisonMadisonExecutive EducationExecutive Education
© Linda Gorchels 2002-2009
Source: Michel Robert, Strategy, Pure & Simple (NY: McGraw-Hill) pp. 78-82
Overhead transparencies
Video tapes
ppydisks
Compact disks
notes
Masking tape
tape
Sandpaper
Assessing a firm’s resources
Resource Example indicators*Financial resources Debt to equity ratio
Credit ratingPhysical resources Resale value
Scale of plants Technological resources Patents
R&D staff
University of WisconsinUniversity of Wisconsin--MadisonMadisonExecutive EducationExecutive Education
© Linda Gorchels 2002-2009
Reputation Brand recognition Price premium
Human resources Qualifications Turnover rate
*See appendix
Strategic Market‐Based PlanningUniversity of Wisconsin Executive Education
12http://exed.wisc.edu/marketing/ © Linda Gorchels 2002‐2009
TIMES Reflection for external OT
• Technological (science IT innovation)• Technological (science, IT, innovation)
• Industry/competitive (general & specific)
• Market (defining relevant markets)
• Economic/environmental (macro & micro issues)
University of WisconsinUniversity of Wisconsin--MadisonMadisonExecutive EducationExecutive Education
© Linda Gorchels 2002-2009
• Socio-cultural (demographic, social)
Technology analysis
• Describe technology, science & innovation i i d t d i i il i d t iin your industry and in similar industries. – Can technologies from other industries be
adapted?– Are novel applications possible?
• What technological changes are expected
University of WisconsinUniversity of Wisconsin--MadisonMadisonExecutive EducationExecutive Education
© Linda Gorchels 2002-2009
g g por anticipated?
Strategic Market‐Based PlanningUniversity of Wisconsin Executive Education
13http://exed.wisc.edu/marketing/ © Linda Gorchels 2002‐2009
Technology’s dance with society
• Technology’s speed matches society’s• Technology s speed matches society s speed.– How are you? Good (80s) Great(90s) Busy (now)– Gift cards more popular than gifts.– Speed dating on the Internet– Energy drinks are a $5 billion category
University of WisconsinUniversity of Wisconsin--MadisonMadisonExecutive EducationExecutive Education
© Linda Gorchels 2002-2009
– Energy drinks are a $5 billion category– Disney has 5-minute bedtime stories
Industry & competitive analysis
• Strategic competitors their competencies• Strategic competitors, their competencies, and their strategies– See appendix for example worksheets
• Key success factors• Changes in industry structure
University of WisconsinUniversity of Wisconsin--MadisonMadisonExecutive EducationExecutive Education
© Linda Gorchels 2002-2009
g y– Porter’s Five Forces Model (see appendix)
Strategic Market‐Based PlanningUniversity of Wisconsin Executive Education
14http://exed.wisc.edu/marketing/ © Linda Gorchels 2002‐2009
Market analysis• Is your primary market stable, growing, or
declining?declining?• How might it change in the future?• What articulated or unarticulated needs
must you prepare for?• Have you saturated your existing market?
University of WisconsinUniversity of Wisconsin--MadisonMadisonExecutive EducationExecutive Education
© Linda Gorchels 2002-2009
• What geographic opportunities are emerging?
• What are your most relevant markets?
Market statistics examples
• Segment characteristics• Size & projected growth rates• Market share (yours & the competition)• Profitability• Entry barriers
University of WisconsinUniversity of Wisconsin--MadisonMadisonExecutive EducationExecutive Education
© Linda Gorchels 2002-2009
• Cost structure• Distribution systems
Strategic Market‐Based PlanningUniversity of Wisconsin Executive Education
15http://exed.wisc.edu/marketing/ © Linda Gorchels 2002‐2009
Economic & environmental
• What pending legislation might affect your future?
• Are there existing laws or requirements that pose opportunities or threats?
• What governmental and political changes might happen?
University of WisconsinUniversity of Wisconsin--MadisonMadisonExecutive EducationExecutive Education
© Linda Gorchels 2002-2009
g pp– World affairs, politics, and public policy
• What environmental or sustainability issues should you consider?
Socio-cultural analysis
What social and cultural trends might impact
– lifestyles– values
– education– environmental
i
your customers, your employees, or your competitors?
University of WisconsinUniversity of Wisconsin--MadisonMadisonExecutive EducationExecutive Education
© Linda Gorchels 2002-2009
– religion– leisure
issues– health issues
Strategic Market‐Based PlanningUniversity of Wisconsin Executive Education
16http://exed.wisc.edu/marketing/ © Linda Gorchels 2002‐2009
The generational continuum1945 1963 1979
SeniorsBoomers
Gen X
University of WisconsinUniversity of Wisconsin--MadisonMadisonExecutive EducationExecutive Education
© Linda Gorchels 2002-2009
Gen X
Upstream business goals
• In addition to the SWOT, if the strategy is b i d f b i itbeing prepared for a business unit or a product line (as opposed to a corporate strategy), the scan should assess upstream business goals.
• Are your goals determined or affected by
University of WisconsinUniversity of Wisconsin--MadisonMadisonExecutive EducationExecutive Education
© Linda Gorchels 2002-2009
Are your goals determined or affected by higher-level corporate, division or business unit goals?
Strategic Market‐Based PlanningUniversity of Wisconsin Executive Education
17http://exed.wisc.edu/marketing/ © Linda Gorchels 2002‐2009
Strategic goals should be linkedCorporate head officeCorporate
strategy
Division A Division B
HR
R&D
Finance
HR
R&D
Finance
Business strategy
Functional strategies
University of WisconsinUniversity of Wisconsin--MadisonMadisonExecutive EducationExecutive Education
© Linda Gorchels 2002-2009
Production
Marketing/Sales
Production
Marketing/SalesContemporary Strategy Analysis, by Robert Grant, (Blackwell Publishers, 1998) p. 20.
MONITOR
• While the initial scan is a beginning step of t t i l i it i istrategic planning, monitoring is an
ongoing part of strategy implementation
University of WisconsinUniversity of Wisconsin--MadisonMadisonExecutive EducationExecutive Education
© Linda Gorchels 2002-2009
Strategic Market‐Based PlanningUniversity of Wisconsin Executive Education
18http://exed.wisc.edu/marketing/ © Linda Gorchels 2002‐2009
FORECAST
• The intent of this step is to determine the b bilit d ti i f f t tprobability and timing of future events
– Which technologies will be disruptive?– When will patent expirations (either yours or
the competition) occur?– How quickly will markets transform due to
University of WisconsinUniversity of Wisconsin--MadisonMadisonExecutive EducationExecutive Education
© Linda Gorchels 2002-2009
q ydemographic or other shifts?
ASSESS
• Try to determine– If the event or trend from the prior step
occurs, how significant will be the impact on your firm?
– How should the events and trends be prioritized?
– How might I build on strengths resolve
University of WisconsinUniversity of Wisconsin--MadisonMadisonExecutive EducationExecutive Education
© Linda Gorchels 2002-2009
How might I build on strengths, resolve weaknesses, exploit opportunities and minimize threats?
• Need to obtain commitment and buy-in
Strategic Market‐Based PlanningUniversity of Wisconsin Executive Education
19http://exed.wisc.edu/marketing/ © Linda Gorchels 2002‐2009
Two …
Preparing for Strategic p g gLeadership
University of WisconsinUniversity of Wisconsin--MadisonMadisonExecutive EducationExecutive Education
© Linda Gorchels 2002-2009
Strategic marketing leaders …
. . .must be domain spanners!p
University of WisconsinUniversity of Wisconsin--MadisonMadisonExecutive EducationExecutive Education
© Linda Gorchels 2002-2009
Strategic Market‐Based PlanningUniversity of Wisconsin Executive Education
20http://exed.wisc.edu/marketing/ © Linda Gorchels 2002‐2009
What is the role of strategy?
• Strategy is the art and science of attaining t i bl titi d tsustainable competitive advantage
through the most appropriate utilization of resources and assets. It starts with an internal and external scan, then requires leadership in defining a company’s future
University of WisconsinUniversity of Wisconsin--MadisonMadisonExecutive EducationExecutive Education
© Linda Gorchels 2002-2009
direction, making trade-offs, and structuring an implementation plan.
• Vision without action is a daydream.Action without vision is a nightmare.
• Japanese proverb
University of WisconsinUniversity of Wisconsin--MadisonMadisonExecutive EducationExecutive Education
© Linda Gorchels 2002-2009
Strategic Market‐Based PlanningUniversity of Wisconsin Executive Education
21http://exed.wisc.edu/marketing/ © Linda Gorchels 2002‐2009
• Strategic leadership requires both vision and action. Leaders may need to be change agents.
University of WisconsinUniversity of Wisconsin--MadisonMadisonExecutive EducationExecutive Education
© Linda Gorchels 2002-2009
• “If we could predict the future with certainty, it would mean that the future could not bewould mean that the future could not be changed. … Yet this is the main purpose of studying the future: to look at what may happen if present trends continue, decide if this is what is desirable, and if it’s not, work to change it. … The ability to see and create the future is the
University of WisconsinUniversity of Wisconsin--MadisonMadisonExecutive EducationExecutive Education
© Linda Gorchels 2002-2009
yessence of leadership.”
• From literature of the World Future Society
Strategic Market‐Based PlanningUniversity of Wisconsin Executive Education
22http://exed.wisc.edu/marketing/ © Linda Gorchels 2002‐2009
Change agents are able to …
• Shape the vision• Determine and understand the need for
change– Gather market knowledge– Predict the future
• Demonstrate leadership commitment
University of WisconsinUniversity of Wisconsin--MadisonMadisonExecutive EducationExecutive Education
© Linda Gorchels 2002-2009
Demonstrate leadership commitment– Establish strategy– Align structures, systems and incentives– Implement strategy
Leaders shape the vision
• Core values– Beliefs your firm’s members hold in common
• Mission– Defines why your firm exists
• Strategic vision– A description of the desired future state of your
University of WisconsinUniversity of Wisconsin--MadisonMadisonExecutive EducationExecutive Education
© Linda Gorchels 2002-2009
– A description of the desired future state of your firm
Strategic Market‐Based PlanningUniversity of Wisconsin Executive Education
23http://exed.wisc.edu/marketing/ © Linda Gorchels 2002‐2009
Core values
• Are enduring principles that guide the “ lt ” f fi“culture” of a firm
• May be part of the mission statement or a separate pronouncement
• Generally link to your positioning and brand identify
University of WisconsinUniversity of Wisconsin--MadisonMadisonExecutive EducationExecutive Education
© Linda Gorchels 2002-2009
brand identify
Example core values
Walt DisneyNo cynicismNurturing and promulgation of “wholesome American values”Creativity, dreams, and imaginationFanatical attention to consistency and detail
University of WisconsinUniversity of Wisconsin--MadisonMadisonExecutive EducationExecutive Education
© Linda Gorchels 2002-2009
Fanatical attention to consistency and detailPreservation and control of the Disney magic
Strategic Market‐Based PlanningUniversity of Wisconsin Executive Education
24http://exed.wisc.edu/marketing/ © Linda Gorchels 2002‐2009
Example core values
SonySonyElevation of the Japanese culture and national statusBeing a pioneer -- not following others; doing the impossible
University of WisconsinUniversity of Wisconsin--MadisonMadisonExecutive EducationExecutive Education
© Linda Gorchels 2002-2009
Encouraging individual ability and creativity
Example core values
NordstromNordstromService to the customer above all elseHard work and individual productivityNever being satisfiedExcellence in reputation; being part of
thi i l
University of WisconsinUniversity of Wisconsin--MadisonMadisonExecutive EducationExecutive Education
© Linda Gorchels 2002-2009
something special
Strategic Market‐Based PlanningUniversity of Wisconsin Executive Education
25http://exed.wisc.edu/marketing/ © Linda Gorchels 2002‐2009
Mission
• Communicates the essence of your i ti t t k h ldorganization to your stakeholders
• Generally includes– A purpose statement (why your firm exists)– A business statement (what your firm does to
achieve its purpose)
University of WisconsinUniversity of Wisconsin--MadisonMadisonExecutive EducationExecutive Education
© Linda Gorchels 2002-2009
achieve its purpose)• May also include the core values
Core purpose: examples
3M: To solve unsolved problems innovatively3M: To solve unsolved problems innovatively
Nike: To experience the emotion of competition, winning and crushing competitors
Sony: To experience the joy of advancing and applying technology for the benefit of the public
University of WisconsinUniversity of Wisconsin--MadisonMadisonExecutive EducationExecutive Education
© Linda Gorchels 2002-2009
Source: Collins, James C., and Jerry I. Porras, “Building Your Company’s Vision”, Harvard Business Review, September-October 1996, p. 38.
public
Walt Disney: To make people happy
Strategic Market‐Based PlanningUniversity of Wisconsin Executive Education
26http://exed.wisc.edu/marketing/ © Linda Gorchels 2002‐2009
Mission statement -YMCA• The YMCA of San Francisco, based in
J d Ch i ti h it [ l ] k tJudeo-Christian heritage [values], seeks to enhance the lives of all people [purpose] through programs designed to develop spirit, mind and body [business].
University of WisconsinUniversity of Wisconsin--MadisonMadisonExecutive EducationExecutive Education
© Linda Gorchels 2002-2009
Source: VolunteerMatch website, January 2008 (descriptors – values, purpose, business – added).
Dow Chemical, Inc.
MissionMission• To constantly improve what is essential
to human progress by mastering science and technology.
» Corporate website, February 2009
University of WisconsinUniversity of Wisconsin--MadisonMadisonExecutive EducationExecutive Education
© Linda Gorchels 2002-2009
Strategic Market‐Based PlanningUniversity of Wisconsin Executive Education
27http://exed.wisc.edu/marketing/ © Linda Gorchels 2002‐2009
Dow’s Essential Elements
University of WisconsinUniversity of Wisconsin--MadisonMadisonExecutive EducationExecutive Education
© Linda Gorchels 2002-2009
Source: Corporate website, Feb. 2009
OneAmerica Financial PartnersMission• The essence of the OneAmerica enterprise however• The essence of the OneAmerica enterprise, however,
is to help protect the future of our customers. We help individuals and businesses create and protect assets through trusted advisors.
Our Values• Being a mutual holding company organization allows
us to focus first on the needs of our companies’
University of WisconsinUniversity of Wisconsin--MadisonMadisonExecutive EducationExecutive Education
© Linda Gorchels 2002-2009
us to focus first on the needs of our companies’ policyholders.
Corporate website, February 2009
Strategic Market‐Based PlanningUniversity of Wisconsin Executive Education
28http://exed.wisc.edu/marketing/ © Linda Gorchels 2002‐2009
Strategic vision
Strategic vision is the “mental picture” of what the company will be in the future. It is the answer to the questions:– Where is the company going?– What will it “look” like?– What will we do differently to attain
f ?
University of WisconsinUniversity of Wisconsin--MadisonMadisonExecutive EducationExecutive Education
© Linda Gorchels 2002-2009
profitable competitive advantage?Martin Luther King, Jr. started his vision
statement with, “I have a dream …”
Strategic vision example
• Komatsu– Encircle Caterpillar
– Date Corporate Challenge Activities– 1960s Protect home market Licensing deals
Begin quality efforts Quality programs
University of WisconsinUniversity of Wisconsin--MadisonMadisonExecutive EducationExecutive Education
© Linda Gorchels 2002-2009
– 1970s Build export markets Industrializing nations– late 70s Create new products Future and Frontiers
markets program
Strategic Market‐Based PlanningUniversity of Wisconsin Executive Education
29http://exed.wisc.edu/marketing/ © Linda Gorchels 2002‐2009
W.W. Grainger
Our Vision• To be the leader in the distribution of
maintenance, repair, and operating supplies and related information to commercial, industrial, contractor, and institutional customers.
• Corporate website January 2008
University of WisconsinUniversity of Wisconsin--MadisonMadisonExecutive EducationExecutive Education
© Linda Gorchels 2002-2009
Corporate website, January 2008
Interface Inc.Vision• To be the first company that by its• To be the first company that, by its
deeds, shows the entire industrial world what sustainability is in all its dimensions: People, process, product, place and profits — by 2020 — and in
University of WisconsinUniversity of Wisconsin--MadisonMadisonExecutive EducationExecutive Education
© Linda Gorchels 2002-2009
doing so we will become restorative through the power of influence.
Corporate website, February 2009
Strategic Market‐Based PlanningUniversity of Wisconsin Executive Education
30http://exed.wisc.edu/marketing/ © Linda Gorchels 2002‐2009
DuPont
• Our vision is to be the world's most d i i tidynamic science company, creating sustainable solutions essential to a better, safer and healthier life for people everywhere.
Corporate website, February 2009
University of WisconsinUniversity of Wisconsin--MadisonMadisonExecutive EducationExecutive Education
© Linda Gorchels 2002-2009
Corporate website, February 2009
American Physical Therapy Assoc.• By 2020, physical therapy will be provided by
physical therapists who are doctors of physicalphysical therapists who are doctors of physical therapy, recognized by consumers and other health care professionals as the practitioners of choice to whom consumers have direct access for the diagnosis of, interventions for, and prevention of impairments, functional limitations, and disabilities related to movement function
University of WisconsinUniversity of Wisconsin--MadisonMadisonExecutive EducationExecutive Education
© Linda Gorchels 2002-2009
and disabilities related to movement, function, and health.
Association website, February 2009
Strategic Market‐Based PlanningUniversity of Wisconsin Executive Education
31http://exed.wisc.edu/marketing/ © Linda Gorchels 2002‐2009
Determine the need for change
• Marketing is charged with the task of i fl i d d i th t ill h linfluencing demand in a way that will help your firm achieve its objectives– Gather market knowledge – Predict the future
University of WisconsinUniversity of Wisconsin--MadisonMadisonExecutive EducationExecutive Education
© Linda Gorchels 2002-2009
• Marketing leaders demonstrate leadership commitment.–Establish strategy–Align structures & incentives
Implement strategy
University of WisconsinUniversity of Wisconsin--MadisonMadisonExecutive EducationExecutive Education
© Linda Gorchels 2002-2009
–Implement strategy
Strategic Market‐Based PlanningUniversity of Wisconsin Executive Education
32http://exed.wisc.edu/marketing/ © Linda Gorchels 2002‐2009
Establish strategy
• Build on firm’s core strengths & core b ibusiness
• Establish market-based goals that help accomplish firm goals– Which customers to target– Which competitors to target
University of WisconsinUniversity of Wisconsin--MadisonMadisonExecutive EducationExecutive Education
© Linda Gorchels 2002-2009
Which competitors to target– What problems and opportunities to leverage– How/when to compete and collaborate
Align structures & measures
Strategic goals Tactical plans Operational activities
Marketing effectiveness
Sales Profitability Marketing mix
Performance standards Customer satisfaction
• Structural alignment with strategic customers
• Customer retention
• Profitability activity and
• Customer satisfaction index
• Timeliness of response
University of WisconsinUniversity of Wisconsin--MadisonMadisonExecutive EducationExecutive Education
© Linda Gorchels 2002-2009
g
•Long-term brand equity
• Growth & profitabilitytrends
• Profitability, activity and productivity ratios
• Actual to budgeted performance
• Timeliness of response
• # calls per week
Strategic Market‐Based PlanningUniversity of Wisconsin Executive Education
33http://exed.wisc.edu/marketing/ © Linda Gorchels 2002‐2009
Strategy implementation
• People need to know– How is this change relevant to what I do?– What, specifically, should I do?– How will I be measured and what
consequences will I face?– What tools & support are available?
University of WisconsinUniversity of Wisconsin--MadisonMadisonExecutive EducationExecutive Education
© Linda Gorchels 2002-2009
pp– What’s in it for me?
The purpose of strategy is to p p gyhelp individuals choose among
competing priorities.
University of WisconsinUniversity of Wisconsin--MadisonMadisonExecutive EducationExecutive Education
© Linda Gorchels 2002-2009
Strategic Market‐Based PlanningUniversity of Wisconsin Executive Education
34http://exed.wisc.edu/marketing/ © Linda Gorchels 2002‐2009
Three …
Strategy Philosophies & Goalsgy p
University of WisconsinUniversity of Wisconsin--MadisonMadisonExecutive EducationExecutive Education
© Linda Gorchels 2002-2009
Strategic Goals
• Leaders set strategic goals based on the environmental scan and on knowledge of theenvironmental scan and on knowledge of the mission, vision and values. Different “gurus” have presented different approaches as catalysts to this strategic thinking.– Growth from the core– Seeking competitive advantage
University of WisconsinUniversity of Wisconsin--MadisonMadisonExecutive EducationExecutive Education
© Linda Gorchels 2002-2009
Seeking competitive advantage– Seeking untapped market space– Anticipating disruption
Strategic Market‐Based PlanningUniversity of Wisconsin Executive Education
35http://exed.wisc.edu/marketing/ © Linda Gorchels 2002‐2009
Growth From The Core• Develop strategies that strengthen and grow your core
business– Profit from the Core (Chris Zook)– Beyond the Core (Chris Zook)
• Move toward BHAGs that build on core ideologies and identity– Built to Last (James Collins & Jerry Porras)– The Soul of the Corporation (Hamid Bouchikhi & John Kimberly)
• Leverage core competencies
University of WisconsinUniversity of Wisconsin--MadisonMadisonExecutive EducationExecutive Education
© Linda Gorchels 2002-2009
• Leverage core competencies– Competing for the Future (Gary Hamel & C.K. Prahalad)
Seeking Competitive Advantage
• Define the competitive structure of an i d t id tif th k f tindustry, identify the key success factors, and work to either change the structure in your favor or gain superiority in the key success factors– Competitive Strategy (Michael Porter)
University of WisconsinUniversity of Wisconsin--MadisonMadisonExecutive EducationExecutive Education
© Linda Gorchels 2002-2009
p gy ( )– Market-Driven Strategy (George Day)
Strategic Market‐Based PlanningUniversity of Wisconsin Executive Education
36http://exed.wisc.edu/marketing/ © Linda Gorchels 2002‐2009
Seeking Untapped Marketspace
• Move away from the boundaries of ti titi d l k fcomparative competitiveness and look for
products and services to fulfill a yet unmet demand– Blue Ocean Strategy (W. Chan Kim & Renee
Mauborgne)
University of WisconsinUniversity of Wisconsin--MadisonMadisonExecutive EducationExecutive Education
© Linda Gorchels 2002-2009
– MarketBusters (Rita Gunther McGrath & Ian C. MacMillan)
Anticipating Disruption
• This is another look at new marketspace, b t f th ti f ti tibut from the perspective of estimating when an emerging trend will take off, and building a strategy to take advantage of it– The Tipping Point (Malcolm Gladwell)– The Innovator’s Solution (Clayton Christensen
University of WisconsinUniversity of Wisconsin--MadisonMadisonExecutive EducationExecutive Education
© Linda Gorchels 2002-2009
( y& Michael Raynor)
Strategic Market‐Based PlanningUniversity of Wisconsin Executive Education
37http://exed.wisc.edu/marketing/ © Linda Gorchels 2002‐2009
From Goals To Strategies
• After strategic thinking, leaders must move to strategic planning i e move from goalsto strategic planning, i.e., move from goals to strategies.
• Where to compete:– Target industries, accounts, countries, etc.
• How/when to compete:
University of WisconsinUniversity of Wisconsin--MadisonMadisonExecutive EducationExecutive Education
© Linda Gorchels 2002-2009
– Focus on specific products, opportunities– Build specific competencies and skills– Choose appropriate timing
Laying the groundwork - summary
1. Environmental scanning• Working through a 4-step process
2. Preparing for strategic leadership• Understanding how cultures affect change
3. Strategy philosophiesCoalescing different approaches
University of WisconsinUniversity of Wisconsin--MadisonMadisonExecutive EducationExecutive Education
© Linda Gorchels 2002-2009
• Coalescing different approaches