Transcript Strategic Market Manangement

© 2005 John Wiley & Sons
Chapter 10-13: Growth Strategies
There are 4 ways to grow a business:
1. Energizing the current business – existing product markets with
existing assets & competencies
2. Leveraging the current business
- taking the existing products into new market
- finding new products/services for the existing customer base
- leveraging assets or competencies
3. Creating a new business
- finding a white space in the market
- creating transformational innovation
4. Going global
- leveraging the business into new countries
- creating new or improved assets & competencies that will lead to SCA
in a global marketplace
PPT1
Chapter 10 Energizing the business
© 2005 John Wiley & Sons
Increasing Market Share
Three ways to energize the brand:
1. Increase product usage among existing customers
- frequency of use
- the quantity used
2. Create differentiation through branded differentiators
- branded feature (meaningful & impactful) – Westin Heavenly Bed
- branded technology – Toyota VVT-I
- branded program – Harley-Davidson ride planner, photo center
- co-branded differentiator – WestinWORKOUT powered by Reebok,
Ford Explorer Eddie Bauer Edition
3. Create energy through branded energizers
- branded program (Avon Breast Cancer Crusade)
- branded sponsorships (Adidas Streetball Challenge)
- endorsers (Tiger Woods vs. Buick)
Difference between a branded differentiator and a branded energizer?
PPT2
Chapter 11 Leveraging the business
Which Assets & Competencies can be leveraged?
Brand Extensions
Expanding the Scope of the Offering (Product Expansion)
New Markets (Market Expansion)
Evaluating Business Leveraging Options
The Mirage of Synergy
© 2005 John Wiley & Sons
1.
2.
3.
4.
5.
6.
PPT3
Chapter 12 Creating New Businesses- “where is the white
space?”
1. The new business
- What is the definition of a truly new business?
- Difference between blue ocean businesses & red ocean businesses
- Barriers to long-term success in existing product markets
© 2005 John Wiley & Sons
2. The innovator’s advantage
- What is an innovator’s advantage
- Successful early market leaders share some commonality
3. Guides in managing category perception – focus on what product
category or subcategory to buy
4. Routes to a new business – identify some examples of new businesses
that were based on transformational innovation
5. From Ideas to Market – Making new business will require people,
system, culture & structure that must adapt quickly to an emerging
market area very different from the core
PPT4
Chapter 12 Creating New Businesses- Some examples of new
businesses that were based on transformational innovations
Starbucks
Starbucks was different in that
- they created an inviting ambiance
- the specialty coffee was the reason to go into Starbucks, and customers could
choose from over 100s of different variations on coffee
- The price was also different from regular mom-and-pop coffee shops
- Starbucks was limited in what food you could buy and you certainly could not order
fresh cooked foods, i.e., bacon & eggs, and hash browns with toast
© 2005 John Wiley & Sons
What was similar was that like a regular coffee shop people could come in a sit down
and enjoy a cup of coffee and it was typically a gathering place for locals.
There wasn’t really an innovator advantage because, while smaller, Peet’s had
limited exposure on the West Coast and had a similar offering yet not the
financial ability to expand like Starbucks.
Starbucks originated from an established business. Howard Schultz bought an
existing business and expanded it. Howard Schultz came up with the idea when
he was traveling in Italy and he thought it would be a good idea to transplant the
coffee experience from Europe.
PPT5
TiVo http://www.youtube.com/watch?v=J2SV2dHQxsY; http://www.youtube.com/watch?v=9SKfT9FFO18
© 2005 John Wiley & Sons
TiVo was different from previous ways to record video.
- Typically VHS (Video Home System) had a limit from 2 to 6 hours that could be
recorded on a single tape without the customer having to manually change the
tape
- With TiVo the customer could set the machine to record an episode of a continuing
television show and then tell TiVo to record all new episodes of the same series.
In addition, TiVo electronically monitors the cable system and updates the
customer on any changes in the channel line up. Unlike VHS machines, TiVo also
allows you to record one show and playback a different show simultaneously. The
fast forward on TiVo allows to the customer to bypass commercials and it
automatically monitors the space available on the hard drive.
What was similar was the ability to record from a television cable service and preprogram recording of a show (with very limited variety)
The advantage was short-lived because other television providers offered similar
services with their own DVR boxes – Comcast, Direct TV, etc. However, their
patent assets may allow them to survive or even win because without access to
their patents, competitors have inferior performance
This was a new offering, transformational technology created by TiVo corporation.
PPT6
WebVan
WebVan invented a business concept that has transformed grocery shopping for
many.
A customer could order by phone or on the internet and have the grocery store
deliver the groceries at a specific time frame.
© 2005 John Wiley & Sons
WebVan was the first to do this on a big scale. They only lasted a year or two
because the financial model was weak.
PPT7
Lexus
Lexus changed the way the customer viewed the maintenance of the car.
- Unlike other brands, the Lexus dealer would come to your place of work or home,
drop off a loaner car and take the customer’s car to the shop do the maintenance
and then return the car to the customer and pick up the loaner. They removed the
dreaded car service trip for the customer.
What was similar was the car fixed in the shop; but the customer service involved
was revolutionary for the car business.
© 2005 John Wiley & Sons
For Discussion:
Is the customer service provided by Lexus an innovator’s advantage?
PPT8
Lexus
For Discussion:
Is the customer service provided by Lexus an innovator’s advantage?
The advantage was not a real innovator’s advantage in that the service component
of the purchase of the car was too minor a point in the overall purchase decision.
© 2005 John Wiley & Sons
To date, Lexus is the only car manufacturer that provides this service.
PPT9
Chapter 12 Global Strategies
1. What is the difference between a global strategy & a multinational
strategy?
- Multinational: Separate strategies developed & implemented autonomously
- Global: A worldwide perspective, aim to create synergies, economies of scale,
strategy flexibility & opportunities to leverage insights, programs, & product
economies
© 2005 John Wiley & Sons
2. Eight motivations for global strategies
Discussion Question
3. Four Challenges to effective global brand management
A communication system; A planning system; A management structure to foster
synergy and a system to encourage excellence in brand building
4. Strategic Alliances
Considered when there are uncertainties of operating in other countries
PPT10
Chapter 12 Global Strategies
Eight motivations for global strategies
For Discussion:
For what products does globalization not make sense because the
strategy needs to be local?
-
What products have points of differentiation that span countries?
© 2005 John Wiley & Sons
-
PPT11
Chapter 12 Global Strategies
Eight motivations for global strategies
-
For what products does globalization not make sense because the
strategy needs to be local?
Many food products fall into this category. In general, food products are
more sensitive to culture, local needs and habits.
© 2005 John Wiley & Sons
-
What products have points of differentiation that span countries?
Products that have purely functional benefits that are visible are more
likely to be global (e.g., Pampers’ dry, happy baby)
High-end premium brand (e.g., Mercedes)
Country position (e.g., Coke, Levis’, KFC, Harley, country of origin is a
product signal of quality)
PPT12
Chapter 12 Global Strategies
Effective global brand management:
1. Developing a cross-country communication system to facilitate the
sharing of insights, methods, experiences and best practice (Intranet)
2. Creating a global brand planning system (Planning template)
3. Forming an organizational structure to foster cross-country synergy:
•
© 2005 John Wiley & Sons
•
-
Uninformed dictator model – CEO make arbitrary decisions without research or
analysis
Anarchy – Extremely decentralized structure with little guidance or communication
Service provider model – Central group develops a staff and knowledge base around
topics such as MR, segmentation, sponsorship and ads
Facilitator model – help the business units to develop sound strategies
Consultative model – Provide insights and suggestions
4. Finding ways to achieve brilliance in brand-building
-
Consider what paths to follow
Get the best and most motivated people to work on the brand
Develop multiple options
Measure the results
PPT13
Chapter 12 Global Strategies
Strategic Alliances – deal with uncertainties of operating in other countries
1. Definition – A long-term collaboration leveraging the strengths of two or more
organizations to achieve strategic goals
2. Motivations for a strategic alliance
© 2005 John Wiley & Sons
- A desire to achieve benefits of a global strategy
- A need to compensate for the absence of or weakness in a needed asset or
competency
3. Success keys – Each partner contributes assets & competencies over time &
obtains strategic advantages
PPT14