Maggie Marketing and Business

Maggie Marketing and Business Maggie: Marketing and Business-level Strategic Planning Essay Global Business Strategy Week10 Business-level Strategic Planning Learning Objectives Types of business-level strategies – Porter’s typology – Miles & Snow’s typology – Product life cycle Business-level strategic planning – Value-chain – Strategy clock Week 10 2 Porter’s Competitive Strategies Overall cost leadership – Supply the same product or service at a lower unit cost than competitors Differentiation – Supply a product or service of which one or more attributes are perceived as more valuable Focus – Target certain types of products for certain customer groups or regions Week 10 3 Cost-leadership Cost leader can be obtained through economies of scale simpler product design lower input costs efficient organisational process Case: IKEA simple, high-quality Scandinavian design (cost-saving in product design) buying offices in 45 countries (cost-saving in inputs) knock-down furniture kits (cost-saving in assembling and delivering) huge suburban stores (cost-saving in warehousing) customer self-service with tape measures, pens and notepaper (cost-saving in staffing) Week 10 4 Differentiation Differentiation brings competitive advantage meet the buyer needs in a unique manner create the higher perceived value and able to charge a higher price quality differentiation Rolex customer service Singapore Airlines value-for-money Fisher and Paykel, Mark and Spencer brand image Coca-Cola, Calvin and Klein Week 10 5 Focus focus strategy brings competitive advantage match the features of specific products to the needs of specific customer groups geographic region ethnicity purchasing power tastes cost focus and differentiation focus Week 10 6 Stuck in the middle Firms with no clear generic business strategy high Differentiation or low-cost strategy Focus strategy profitability Stuck in the middle low low market share Week 10 high 7 Miles & Snow’ Typology (1) Prospector – – – – Risk-taking Growth oriented Aggressively seek markets and opportunities Entrepreneurial style of management defender – – – – Protect current markets Maintain stable growth Serve existing customers Emphasize efficiency over innovation Week 10 8 Miles & Snow’ Typology (2) Analyzer – Protect current market share + create market opportunities – Seek balance between: Efficiency and innovation Risk-avoidance and risk-taking Control and flexibility Reactor – No consistent approach – React to environmental changes – Compared to prospector: Drifts with events vs. seek out opportunities Wait to be influenced/changed vs. influence/change the industry Week 10 9 Product Life Cycle (PLC) introduction growth mature decline Market growth Low High Low to moderate Negative Competition Low Increasing Intense Changing Overall objective Market awareness Create consumer demand Defend market Consolidate, share maintain or exit Sales and marketing Production efficiency Major functional R&D concern Week 10 General management and finance 10 Strategies based on PLC prospector analyzer defender reactor differentiation low cost low cost focus differentiation Week 10 11 Business-level Strategic Planning: value chain Organization Infrastructure Human Resources Information Systems Material Management support inbound logistics production outbound logistics Week 10 marketing & sales service 12 Value-added Analysis: sporting shoe industry Value-added 17 3 30 50 component manufacturing assembling wholesale retail 35% 30% 15% 100 10% cost Week 10 13 The smiling curve Week 10 14 Business-level Strategic