MKTG 3118 – Strategic Marketing
Table of Contents
1. Introduction
2. Strategic Analysis: External Analysis (Customer/Competitor) 3. External Analysis: Market/Submarket Analysis
4. Internal Analysis
5. Customer Value Leadership
6. Creating, Adapting and Implementing Strategy I 7. Creating, Adapting and Implementing Strategy II 8. Creating, Adapting and Implementing Strategy III 9. Public Holiday
10. Creating, Adapting and Implementing Strategy IV 11. Sustainability in Marketing Strategy (CSV)
12. Harnessing the Organisation: Creating, Adapting and
Implementing Strategy
Lecture 1
STRATEGY
…the creation of a unique and valuable position, involving a different set of activities - Porter Other definitions
1. In terms of the 3 key players (competitors, customers, company) strategy is defined as the way in which a corporation endeavours to differentiate itself
2. 4 dimensions: product-market investment strategy, the customer value proposition, assets and competencies, functional strategies and programs. The first specifies where to compete, and the remaining three indicate how to compete to win OBJECTIVES:
§ Strategic analysis
§ Innovation
§ Multiple businesses – strategies and issues
§ Creating SCAs
§ Developing growth platforms BUSINESS STRATEGY
Combination of ‘where to compete’ (the product-market investment decision) and
‘how to compete’ (value proposition, assets and competencies, function area programs) Product-market investment strategy
- Invest to grow (enter a product market) - Invest only to maintain the existing position - Milk the business by minimising investment
- Recover as many of the assets as possible by liquidating or divesting the business Product market growth directions (Ansoff, 1960)
Customer value proposition
Perceived benefit to customer: functional, emotional, social, self-expressive e.g. good value, excellent service, best overall quality, product line breadth, innovative offerings
Assets and competencies
Strategic competency: what a business unit does exceptionally well, has strategic importance to the business, based on knowledge or a process. Helps with resource allocation.
Strategic asset: a resource Strategies and programs
- Manufacturing - Distribution - Brand-building - Communication - IT
- Global - Logistical - Quality control
- Customer relationship program - Social technology
SUSTAINABLE COMPETITIVE ADVANTAGE (SCA)
When a firm possess capabilities that allow it to serve customer needs better
Market is more saturated, competitive (things are cheaper), consumers more informed and have increased purchasing power.
Sustainable Competitive Advantage
The way you compete Basis of competition Where you compete Whom you compete against Product strategy
Positioning strategy Manufacturing
strategy Distribution strategy
etc.
Assets and competencies
Product-market selection
Competitor selection
Consider if they are differentiated enough to be sustainable Positions are changing. Yet the need for strategy stems from:
- Fast moving change
- Technologically enabled opportunities for both sides of exchange processes - Understanding how customer benefit and business success can be created and
operationally retained within the context of these changes
- Strategic choices need to be proactive and driven by the market/environment Environmental trends
Dynamic and changing environment - Digital revolution
- Increasingly complex regulatory and political change - Hyper competition
- Well informed consumers
- Global market economy (global competitors, trade barriers removed e.g. brick and mortar retail) changing dynamics of environments. Must consider online conditions.
Fundamental changes in marketing and business practice - Power shift to consumers
- Significant increase in product selection and transaction efficiency
- Changing value propositions (importance of marketers to consumers has changed) o Sharing economy boom
- Shifting demand patterns
- New sources of competitive advantage (distribution channel integration) - Privacy, security and ethical concerns.
o Only 12% of data being effectively used, IBM.
Hypercompetition and D’Aveni’s 7-S’s framework
Believes sustained CA isn’t possible anymore, frequent temporary innovation
This assumes: every advantage becomes eroded, sustaining an advantage uses too much time/resources, and should be replaced by ST advantages in competitive cycles.
e.g. Apple, fast fashion cycles (2 week turn around)
Four arenas in which hyper-competition may be seen (D’Aveni)
1. Cost and quality: higher quality has to be achieved even as costs are lowered 2. Timing and know-how: being first is important to give the firm CA
3. Strongholds: the company needs to define some market segment in which it is strong, this helps to create entry barriers
4. Financial resources: funds able to source upgrades and innovates to lead market Note: vision (stakeholder satisfaction/strategic soothsaying), capability (speed/surprise) and tactics (shifting the rules, simultaneous and sequential strategic thrusts, signalling) for disruption.
D’Aveni’s New 7-S’s
1. Superior stakeholder satisfaction: adding value strategically
2. Strategic soothsaying: use new knowledge to predict new windows of opportunities 3. Positioning for speed: React as fast as possible, or be proactive
4. Positioning for surprise: towards competitors
5. Shifting the rules of competition: serve customers in novel ways 6. Signalling strategic intent: communicate intentions
7. Simultaneous and sequential strategic thrusts: take steps to stun/confuse competitors to disrupt or block their efforts.
IMPORTANCE OF STRATEGIC MARKET MANAGEMENT?
§ Precipitate the consideration of strategic choices in a long term view
§ Help a business cope with change and be agile
§ Makes resource allocation decision visible
§ Aid strategic analysis and decision making
§ Provide a strategic management and control system
§ Provide both horizontal and vertical communication and coordination systems – one segment or multiple for this portfolio analysis
o à helps look and predict those consumer trends, improve sustainability.
Resource based view
Where do you develop strategy? Internal first and then external Porter’s positioning school (opposing view to the RBV^)
Observes the industry environment (competitors, customers and suppliers) to inform the marketer of which strategy to execute
Lecture summary
§ Strategy needs to succeed in a dynamic market.
§ A business strategy includes the determination of the product-market scope and its dynamics (as reflected in the intensity of the business investment), the customer value proposition, assets and competencies, and functional strategies and programs.
§ External analysis includes analyses of customers, competitors, markets, and the environment. Internal analysis includes a performance appraisal and an examination of organizational strengths, weaknesses, problems, constraints, and strategic options.
§ The role of these analyses is to identify existing or emerging opportunities, threats, trends, strategic uncertainties, and strategic options.
§ The marketing team needs to be a partner in strategy and by involved in overcoming silo barriers.
