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Lecture 03 DMC and Strategy
Lecture 03 DMC and Strategy
Lecture 03 DMC and Strategy
Lecture 03 DMC and Strategy
Lecture 03 DMC and Strategy
Lecture 03 DMC and Strategy
Lecture 03 DMC and Strategy
Lecture 03 DMC and Strategy
Lecture 03 DMC and Strategy
Lecture 03 DMC and Strategy
Lecture 03 DMC and Strategy
Lecture 03 DMC and Strategy
Lecture 03 DMC and Strategy
Lecture 03 DMC and Strategy
Lecture 03 DMC and Strategy
Lecture 03 DMC and Strategy
Lecture 03 DMC and Strategy
Lecture 03 DMC and Strategy
Lecture 03 DMC and Strategy
Lecture 03 DMC and Strategy
Lecture 03 DMC and Strategy
Lecture 03 DMC and Strategy
Lecture 03 DMC and Strategy
Lecture 03 DMC and Strategy
Lecture 03 DMC and Strategy
Lecture 03 DMC and Strategy
Lecture 03 DMC and Strategy
Lecture 03 DMC and Strategy
Lecture 03 DMC and Strategy
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Lecture 03 DMC and Strategy

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  • 1. Digital Marketing Communications &amp; Corporate Strategy<br />5G3190 DMC<br />David Edmundson-Bird<br />
  • 2. DMC &amp; Corporate Strategy<br />So what’s the problem?<br />You have to identify the strategic direction of your organisation<br />You have to identify the digital marketing opportunity based on the strategic direction of the organisation<br />
  • 3. DMC &amp; Corporate Strategy<br />So what do you need to learn?<br />How we define the concept of strategy and introduce the classical framework for strategic management<br />How we deal with Objectives<br />Whether strategy changes in the Digital economy<br />
  • 4. The Concept of Strategy and The Classical Framework<br />
  • 5. Business Strategy and the Classical Framework<br />Defining the “concept” of “strategy”<br />Time to refresh your memories<br />What is a strategy?<br />
  • 6. The Concept of Strategy<br />A strategy is a plan for how an “organisation” will “compete” in the “marketplace”<br />What if you’re<br />A government?<br />Or a charity?<br />Or a city council?<br />Or some sad old bloke writing songs in your bedroom?<br />…..that’s just me then is it?<br />
  • 7. Strategy Development involves:<br />Which customers? What products and services? Where will we operate?<br />Choosing where to compete<br />What benefits do our customers seek?<br />Do we have the resources, skills and assets to deliver the target benefits better than our competition?<br />Where can be defended?<br />Is proposition different from our top competitor’s?<br />Can customers tell the difference?<br />How to differentiate?<br />Where are the tradeoffs?<br />Do our resource allocations reflect our differentiation?<br />Do all of our strategic decisions fit together?<br />Do we create value by providing mutually reinforcing services?<br />Activities that link to this?<br />
  • 8. Strategic Management is more than just developing strategy<br />Internal (Company) Analysis<br />Strategy Formulation1<br />Control andMonitoring<br />Objectives<br />Mission<br />Implementation<br /><ul><li>Corporate
  • 9. Business-unit
  • 10. Functional
  • 11. Operating</li></ul>External Analysis<br />
  • 12. Mission<br />Strategic Management begins with a Mission<br />Mission statements set direction<br />Clear sense of purpose for the organisation<br />Provides a clear sense of the business you’re in<br />Expresses organisation’s current business strategy and future strategic direction<br />eBay:<br />“To pioneer new communities around the world built on commerce, sustained by trust and inspired by opportunity.”<br />“To provide online marketplaces for the sale of goods and services as well as other online commerce, or ecommerce, platforms, online payments services and online communications offerings to a diverse community of individuals and businesses.”<br />What’s the difference between a mission and a vision?<br />
  • 13. Objectives<br />Objectives are SMART<br />Good strategic management involves objectives that:<br />Balance financial and strategic measures<br />Measure performance of the business at corporate, SBU and function levels<br />E.g. Measurable tangible<br />Past performance, often incorporating multiple or external variables<br />Sales targets, Profitability, Stock price<br />E.g. Qualitative valued-focus<br />Operational performance in relation to company’s mission<br />Employee retention, Customer satisfaction, Competitive responsiveness, Level of innovation<br />
  • 14. Analysis Phase<br />EXTERNAL ANALYSIS<br />INTERNAL ANALYSIS<br />Differentiated <br />Competencies<br />Differentiated<br />Resources<br />Differentiated<br />Capabilities<br />Analyse customer by segment<br /><ul><li> Financial viability
  • 15. Valued benefits
  • 16. Desired customer experience</li></ul>Does it contribute to outcomes that target customers want?<br />Market Opportunities and Preferences of Desired Target Customers<br />YES<br />Competitor analysis by industry<br /><ul><li> Industry competitors
  • 17. Nature of customers
  • 18. Does we want to compete?</li></ul>Competitor analysis by segment<br /><ul><li>Can we serve the segment better than competitors?</li></ul>Source of Competitive Advantage<br />
  • 19. Creating a Strategy<br />Organisations face different decisions when contemplating corporate strategy and SBU strategy<br />CORPORATE STRATEGY<br />SBU STRATEGY<br />ALL THAT WE DO<br />HOW RELATED ALL THE THINGS<br />THAT WE DO ARE<br />WHAT WE DO IN THIS SBU<br />WHAT ARE OUR GOALS<br />HOW WE ACHIEVE ADVANTAGE<br />HOW WE MANAGE OUR VALUE<br />CHAIN<br />HOW OUR ACTIVITES RELATE<br />TO EACH OTHER<br />WHAT THE BUSINESS FUNCTIONS<br />STRATEGIES ARE<br />BROAD<br />FOCUSSED<br />
  • 20. Creating an Advantage<br />DigitalMarketingStrategy<br /><ul><li>Positioning and target-market selection
  • 21. Marketing tactics (4Ps)</li></ul>Competitive advantages are:<br /><ul><li>Relative to competitors
  • 22. Not mutually exclusive
  • 23. Changing over time</li></ul>Differentiated Competencies<br />Competitive Advantages<br />Performance Outcomes<br />Distinctive competencies don’t always translate into value for customers<br /><ul><li>Better skills
  • 24. Betterresources
  • 25. Better customer value
  • 26. Low-cost producer
  • 27. Delight
  • 28. Loyalty
  • 29. Market share
  • 30. Profitability</li></ul>Competitive advantages don’t always translate into superior performance outcomes<br />The public may not perceive the firm’s superior value<br />Sometimes outcomes are competitive advantages<br />Investment to Create and Sustain Advantage<br />Organisations keep striving for that advantage<br />Do you want more of this? Read G.S. Day and R. Wensley, “Assessing Advantage: A Framework for Diagnosing Competitive Superiority,” Journal of Marketing 52 (1988): 1-20<br />
  • 31. What’s the difference between “Planning” and “Strategy”?<br />Planning<br />Internal focus<br />Introspective<br />Stable environment<br />Predictable environment<br />Goal:<br />Optimize the organisation<br />Strategy<br />External focus<br />Competitive<br />Unstable environment<br />Unpredictable environment<br />Goal:<br />Win the war<br />
  • 32. How we deal with Objectives<br />
  • 33. The Strategic Waterfall<br />Any marketing tools we use must be in pursuit of our communications objectives<br />But how do we get there?<br />
  • 34. The Strategic Waterfall<br />We start with the Mission<br />From there we create business objectives<br />Designed to show “how” you’ll achieve your mission<br />In order to fulfil our business objectives we need some marketing objectives<br />
  • 35. Marketing Objectives<br />2 types<br />Strategic Thrust: Which products are sold in which markets<br />Enter new markets, product development, market penetration/expansion, market development<br />Product Level: Build, hold, harvest, divest<br />
  • 36. Marcomms Objectives<br />Once your marketing objectives are in palce you can derive your Marketing Communications Objectives<br />These need to be SMART<br />They are very specific and relate to the achievement of a given marketing objective<br />Examples found on page 228 of Chaffey et al<br />
  • 37. Digital Marcomms Objectives<br />They’re digital if they relate to the use of (a) digital marketing lever(s)<br />Should be written<br />Achieve &lt;insert change of state&gt; from &lt;initial state&gt; to &lt;final state&gt; by &lt;insert time frame&gt; (amongst &lt;insert specific target audience&gt;)<br />Use terms such as acquire, convert, retain<br />Also consider growth, penetration and cost objectives<br />
  • 38. Does Strategy change in the digital Economy?<br />
  • 39. The 4 Digital Forces affect Strategy<br /><ul><li>Back office efficiency potential
  • 40. Face-to-screen not face-to-face</li></ul>Centricity of Technology<br /><ul><li>Have to respond quickly
  • 41. Not what I can supply but who actually wants what I’ve got</li></ul>CustomerGains Control<br />Fast, Unpredictable<br />Competition<br />Strategy Formulation<br /><ul><li>I decide how and when I interact with your organisation
  • 42. I decide how much info I want to share with you
  • 43. I can compare prices
  • 44. I need your offering to be made personal to me</li></ul>Rapidly Reconfigured<br />Company Resources<br /><ul><li>Rethinking relationships with competition
  • 45. Explore together, exploit separately</li></li></ul><li>The Digital Impact on Porter 5 Forces<br />New Entrants<br />Wherever technology enables a task to be easily undertaken, barriers to entry go down<br />New market entrants can acquire technology applications easily<br />Large capital pool has attracted new entrants to many industries<br />High technology costs and expertise increase barriers to entry<br />Substitutes<br />Especially for digital technology or services, substitute products can easily be offered<br />The Digital Marketplace has introduced new business methodologies, thus creating additional substitution threats<br />
  • 46. The Digital Impact on Porter 5 Forces<br />Bargaining Power of Suppliers<br />The digital world provides direct connection to customers; however, it minimizes suppliers’ bargaining power<br />Suppliers can access end-users through digital interfaces, minimizing the need for middlemen<br />Differentiation becomes more difficult as access to suppliers is equalized via digital markets and purchases<br />Fewer barriers to entry result in increased buyer competition, thus boosting supplier bargaining power<br />Bargaining Power of Buyers<br />Reduces bargaining power of channels<br />Consumers have more information and ability to search for better deals<br />Decreases switching costs<br />
  • 47. The Digital Impact on Porter 5 Forces<br />Competitive Rivalry<br />The digital world minimizes ability to product differentiate; less differentiation means more competition over price<br />Low barriers to entry open markets to heavier competition<br />Variable costs decrease as a percentage of fixed costs, leaving price discounting as a primary method of competition<br />
  • 48. Interactivity &amp; Individualisation<br />Measuring responsiveness to increasing customer control<br />High<br />Digital presence is highly interactive<br />but is not customisable to theindividual<br />Digital presence is highly interactiveand is highly customised to theindividual by themselves or theorganisation<br />CAN YOU THINK OFAN EXAMPLE?<br />CAN YOU THINK OFAN EXAMPLE?<br /><ul><li>Interactivity
  • 49. User’s ability to conduct two-way dialogue through a digital presence</li></ul>CAN YOU THINK OFAN EXAMPLE?<br />CAN YOU THINK OFAN EXAMPLE?<br />Digital presence is highly customisedto the individual by themselves or theorganisation but is not interactive<br />Digital presence is not interactiveand is not customisable to theindividual<br />Low<br />Low<br />High<br /><ul><li>Individualization
  • 50. Customization activities initiated by user or firm</li></li></ul><li>Resource Insight<br />High<br />Low Payoff<br />Sweet Spot<br />Waiting for Customers tosupport the infrastructure<br />SO WE SHOULD<br />Increase the quality ofCustomer Insight<br />Stronger than competition<br />SO WE SHOULD<br />Sell something new<br />Force competition to tryand keep up<br /><ul><li>Quality of theResource System
  • 51. Can it be copied?
  • 52. Is it flexible?</li></ul>Vulture Victim<br />Resource Contained<br />In growth or in decline<br />SO WE SHOULD<br />Improve the quality ofthe resource system<br />We’re being copiedSO WE SHOULD<br />Find a buyerLever the Brand<br />Low<br />Low<br />High<br /><ul><li>Quality of Customer Insight
  • 53. How many customers do we have? How much do we know about them?
  • 54. How quickly can we know about them?</li></ul>CAN YOU THINK OFEXAMPLES?<br />
  • 55. “Digital” adds to External Analysis<br />Internal (Company) Analysis<br />Strategy Formulation1<br />Control andMonitoring<br />Objectives<br />Mission<br />Implementation<br /><ul><li>Corporate
  • 56. Business-unit
  • 57. Functional
  • 58. Operating</li></ul>External Analysis<br />Centricity of Technology<br />Customer Control and Power<br />Fast, Unpredictable Competition<br />
  • 59. Summary<br />We’ve seen what a strategy is<br />We’ve looked at the basic strategic decisions that people have to make to develop a competitive strategy<br />We’ve seen how to create DMC objectives<br />We’ve looked at the 4 Digital Economy Forces that affect strategy formulation<br />We’ve seen how the classical framework is impacted by the Network Economy<br />

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