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Strategy
Chapter 2
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Early Days Characterized by seat of the
pants management. Innovative sneaker tread drove
early success. Technological product
superiority, big-nameendorsements and Just Do Itads
revolutionized sportmarketing.
1980s 1990s: Nike leveragesbrand strength into newproduct
areas.
NIKE
Strategy: Then & Now
Case Study
Late 1990s - Present Changes in consumer shoe
preference, declining productinnovation, and negative PRplague
Nike.
Anti-establishment image nolonger works: brand backlash
occurs. Strategic planning is
embraced and Nike focuseson innovation and exploringnew market
opportunities.
Nike has global success.
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Strategic Planning The process of developing and maintaining a
strategic fit between
the organizations goals and capabilities and its changing
marketingopportunities
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Strategic Planning: Steps
Planning,marketing,and other functional
strategies
Definingthe
companymission
Settingcompanyobjectivesand goals
Designingthe
business portfolio
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Strategic Planning:Mission Statement
Mission Statement
Purpose Guides peoples efforts Understand values Ethical
behaviour
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The Marketing Mix
Targetconsumers
Promotion Place
Product Price
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Managing the Marketing Effort
PLANNING
Strategic Plans
Marketing Plans
IMPLEMENTATION
Carry OutPlans
Analysis
CONTROLMeasure Results
Evaluate Results
CorrectiveAction
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Managing the Marketing Effort
Four marketing management functions: Marketing analysis
Marketing planning Implementation Control
Marketing strategy:Figure 2.6 p.64
The marketing logic by which the business unit hopes
to achieves itsmarketing objectives
http://www.pg.com/
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Contents of a Marketing Plan (Table 2.2 p.65) Executive
summary:
Table of contents
Current marketing situation: Market description, product review,
competition, and
distribution
Threat and opportunity analysis:
Marketing objectives and issues: Marketing strategy:
Target markets, positioning,expenditure levels, and
marketing
mix Action program: Budget: Controls:
http://www.marketingplans.com/
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The Control Process
Marketing audit: Comprehensive, systematic, independent,
periodic Examination of a companys environment, objectives,
strategies, and activities To identify problems, opportunities,
and plans of action
Figure 2.7
Set goals
What do we
want to achieve?
Measureperformance
What ishappening?
Evaluateperformance
Why is ithappening?
Take correctiveaction
What shouldwe do about it?
http://www.dummies.com/WileyCDA/DummiesArticle/id-665.html
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Strategic Business Unit (SBU)
A unit of the company that has a separate mission andobjectives
and that can be planned independently fromother company
businesses.
Can be a company division, a product line within adivision, or
sometimes a single product or brand.
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Designing the Business Portfolio:The BCG Growth-Share Matrix
Low
? ? ? L o
w
High
H i g h
M a r
k e
t g r o w
t h r a
t e
Relative market share p.49
Star
Cash cow
Question mark
Dog
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BCG Growth-Share Matrix
Stars ???
Cows Dogs
Fix or abandon
Use cash to make
into a star
Nurture togenerate cash
Defend position
Industry attractiveness, marketshare, cash generation
Businessstrength,growth rate,cash use
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EQ
Star : Office XP, Red Bull, IPhone; Nano; IE 7.0, Dell Cash Cow
: Cigarettes, Tide, McDonalds ? : OS/2, Apple Computer, Linux,
Reebok Dog : Record albums, VCR, Typewriter.
Once a firm has classified all of its S.B.U., it has
4options:
1. Build 3. Harvest2. Hold 4. Divest
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Problems with Matrixapproaches
May be difficult, time consuming, and costly to implement. May
be difficult to define and measure a S.B.U. They focus on the
present not the future. May lead a firm to place too much emphasis
on growth via new
acquisitions, and therefore, possibly into areas of
managerialweaknesses.
Broadening the focus may not always be the right answer.
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Winning Strategies
Michael Porters 3 winning strategies : Overall cost leadership
(Wal-Mart) Differentiation (IBM) Focus (Amazon.com)
Treacy & Wiersemans 3 value disciplines:
Operational excellence (Dell, Ikea)Product leadership
(3M)Customer intimacy (Harry Rosen,FedEx)
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Strategies(p. 51)
Growth strategies: Essential to grow, to keep up with inflation.
If economy isnt
growing, then you must take away from your competitor tomaintain
your growth.
1) Intensive Growth2) Integrative Growth
3) Diversification
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Designing the Business Portfolio:Developing Growth Strategies
p.51
4. Diversification2. Marketdevelopment
3. Productdevelopment
Existing products
New products
Existingmarkets
Newmarkets
1. Market penetration
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http://www.timhortons.com/
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Strategies for Growth: Tim Hortons
Marketing penetration: Opening more locations in existing
markets, advertising Continuous improvement of facilities and
operations
Market development: New demographic age groups, or geographical
locations (U.S.A)
Productdevelopment: Expanding the product
line to attract lunchcrowd
Diversification: Entering new markets
with new products Growth by acquisition
or development
Figure 2.3
http://www.timhortons.com/
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2. Integrative growth
Backwards : Buy up your suppliers. GM and Delco; Microsoft +
Soft Image Forwards : Buy up your retailers or someone lower in
the channel. PetroCan or McDonalds buying out franchisee; Disney
+
ABC Horizontal : Buy up your competitors Adidas & Reebok;
Molson & Coors; Loblaws & Maxi;
Sears & Eatons; HP & Compaq; P&G and
Gillette;Daimler & Chrysler
Diversification (Conglomerate) buying up unrelatedbusinesses
Seagrams buying MCA for movies; Tropicana juices for a
new TM; Tenneco owns oil+ gas, air conditioning,plastics,
newspapers; Westinghouse & CBS
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3. Diversification
Concentric : New products for new TM using currenttechnology
Bombardier SeaDoo Seagrams & Tropicana
Penthouse & Omni magazine Horizontal : New products for
current TM using newtechnology Labatt selling snack food Coke Cola
bathing suits Nautilus line of clothing
Conglomerate : New products for new TM using newtechnology John
Deere selling a new line of frozen diet foods
