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McGraw-Hill/Irwin   Copyright © 2009 by the McGraw-Hill Companies, Inc. All rights reserved.
Chapter 6Market Strategy
ELEMENTS OF                  BUSINESS STRATEGY1       Determining the               (What markets do we        product mar...
CRITICAL ELEMENTS IN A STRATEGIC PLAN          Determining the              (What markets do we  1          product market...
STRATEGY PROCESS MODEL 1     EXTERNAL                  SELF (INTERNAL     ANALYSIS                     ANALYSISEvaluate op...
STRATEGY PROCESS MODEL 2Updatehistorical data      Collect current      situation data              Data analysis         ...
STRATEGY PROCESS MODEL 3          1.   Define         2.                               Develop                  3.   Defin...
WANTS-GETS GRIDHIGH PERFORMANCEAssistance                                     Consistent productin cost control           ...
CONCEPTUAL MAP         Project manager’s            competency                    Hi                            NOVUS     ...
VALUE CHAIN ANALYSIS                                                               Share of user $    Manufacturers   Spec...
FIVE FORCES OF COMPETITION                Threat of               substitutesBargaining      Struggles      Bargaining pow...
BARRIERS TO ENTERING A             MARKET•   PRODUCT DIFFERENTIATION•   ECONOMIES OF SCALE•   CAPITAL REQUIREMENTS•   ACCE...
ACTIONS TO MEET COMPETITIVE        CHALLENGES •   CHOOSE ITS COMPETITIVE     BATTLEGROUND JUDICIOUSLY •   CHANGE THE COMPE...
Vision for disruption                                       Identifying and creating oppor-                               ...
KOMATSUV CATERPILLAR   Arena 1               Arena 2                   Arena 3                  Arena 4Cost & Quality     ...
MARKET ORIENTATION ELEMENTSBEING SYSTEMATIC IN:1. Gathering of information on customers and   competitors2.   Analyzing in...
PAYOFFS FROM A MARKET           ORIENTATIONA MARKET ORIENTATION COMPANY IS:1.   BETTER AT FITTING NEEDS OF     CUSTOMERS2....
REQUISITES FOR THE LEARNING        ORGANIZATION                                                     CreatingVisionary     ...
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Transcript of "Chap006 market strategy"

  1. 1. McGraw-Hill/Irwin Copyright © 2009 by the McGraw-Hill Companies, Inc. All rights reserved.
  2. 2. Chapter 6Market Strategy
  3. 3. ELEMENTS OF BUSINESS STRATEGY1 Determining the (What markets do we product market serve with what to serve products) 2 Determine partner (How do agreements relationship impact choices) commitments 3 Determining the level (What level of of commitment to investment in the provide resources product market are we willing to make) 4 Determining the (What are the detailed objectives and plans aims and action plans) for each functional area 6-3
  4. 4. CRITICAL ELEMENTS IN A STRATEGIC PLAN Determining the (What markets do we 1 product market serve with what to serve products) Determining the level (What level of 2 of commitment to investment in the provide resources product market are we willing to make) Determining the (What are the detailed 3 objectives and plans aims and action plans) for each functional area 6-4
  5. 5. STRATEGY PROCESS MODEL 1 EXTERNAL SELF (INTERNAL ANALYSIS ANALYSISEvaluate opportunities, Evaluate strengths, threats and strategic weaknesses, problems, questions constraints, questions STRATEGY IDENTIFICATION AND SELECTION Exhibit 6-2 6-5
  6. 6. STRATEGY PROCESS MODEL 2Updatehistorical data Collect current situation data Data analysis Develop objectives, strategies, programs Develop financial documents Negotiate final plan Measure progress toward objectives Exhibit 6-2 Audit 6-6
  7. 7. STRATEGY PROCESS MODEL 3 1. Define 2. Develop 3. Define 4. Define StrategicTrack 1 mission statement of vision goals planning operating foundation principles and values Environmental scanning Strategy development 5. Define planning 6. Define total 7. Define 8. Select BusinessTrack 2 assumptions & market & leadership segments strategy implications: most requirements, and define Develop consensus re: attractive assess long-term corporate & environment segments strengths & segment (customer/market, weaknesses in strategy competition, attractive segments suppliers, etc.) Gap analysis Strategy integration and capability development 9. Define capability 10. Formulate 11. Appraise, test 12. Modify StrategyTrack 3 gaps by assessing strategies & reconcile goals if integration strengths/ that yield strategy with required, set capability weaknesses against competitive functional functional development current capabilities & advantage plans/ and specific competitors in needs business selected segments Exhibit 6-2 objectives 6-7
  8. 8. WANTS-GETS GRIDHIGH PERFORMANCEAssistance Consistent productin cost control quality and appearance OVERACHIEVEMENT Reliable delivery Sales support UNDERACHIEVEMENT Fast order cycle Access to topLead managementgeneration HIGH IMPORTANCE Exhibit 6-5 6-8
  9. 9. CONCEPTUAL MAP Project manager’s competency Hi NOVUS MAVUUS T3 Reputation forBad Good Excellence CLARKE Lo Exhibit 6-6 6-9
  10. 10. VALUE CHAIN ANALYSIS Share of user $ Manufacturers Specialty Dealers Users 2000 20051 Wholesalers 100 120 150 300 40% 50% Manufacturers Distributors Users 60% 50%2 100% 100% 101 130 200 Total spending by users $10mm $15mm Exhibit 6-7 6-10
  11. 11. FIVE FORCES OF COMPETITION Threat of substitutesBargaining Struggles Bargaining power of between power of suppliers industry rivals customers Threat of potential entrants Exhibit 6-8 6-11
  12. 12. BARRIERS TO ENTERING A MARKET• PRODUCT DIFFERENTIATION• ECONOMIES OF SCALE• CAPITAL REQUIREMENTS• ACCESS TO DISTRIBUTION CHANNELS• COST DISADVANTAGES UNRELATED TO SIZE• GOVERNMENT POLICY Exhibit 6-9 6-12
  13. 13. ACTIONS TO MEET COMPETITIVE CHALLENGES • CHOOSE ITS COMPETITIVE BATTLEGROUND JUDICIOUSLY • CHANGE THE COMPETITIVE STRUCTURE OF THE INDUSTRY • ANTICIPATE AND EMPLOY CHANGE 6-13
  14. 14. Vision for disruption Identifying and creating oppor- tunities for temporary advantage through understanding •Stakeholder satisfaction •Strategic soothsaying Directed at identifying new ways to serve existing customers better or new customers that no one else serves now Capability Tactics for disruption for disruption Market Seizing initiative to gain Sustaining the momentum by disruption advantage bydeveloping flexible capacities for: •Shifting the rules • Speed •Signaling • Surprise •Simultaneous & sequential strategic thrusts that can be applied across with actions that shape, mold, many actions to build a or influence the direction on series of temporary nature of the competitors’ advantageous responses Exhibit 6-10 6-14
  15. 15. KOMATSUV CATERPILLAR Arena 1 Arena 2 Arena 3 Arena 4Cost & Quality Timing & Know-how Strongholds Deep Pockets Disrupt Cat’s strategic strengths Outmaneuver Cat’s strengths (“Encircle” Cat)Boost Lower Timing Know-how Geographic Channels Komatsuquality cost Rolls out Aggressive Komatsu moves Komatsu builds one R&D and out of Japanese moves to resources, new product stronghold to new plants product direct sales, program and user at a time Asia, Europe, dealers, then South America, alliances to regional and lastly Gain centers strengths North America initiallyErodes Cat’s Picks off Undermines Erodes Maneuvers Erodespremium price, Cat’s full Cat’s Cat’s World around Cat’s deepglobal volume, line one advantage dominance Cat’s strong pocketslow costs by one on product one place dealer innovation at a time network From the Field: 6-1 6-15
  16. 16. MARKET ORIENTATION ELEMENTSBEING SYSTEMATIC IN:1. Gathering of information on customers and competitors2. Analyzing information to develop market knowledge3. Using this knowledge to guide strategy 6-16
  17. 17. PAYOFFS FROM A MARKET ORIENTATIONA MARKET ORIENTATION COMPANY IS:1. BETTER AT FITTING NEEDS OF CUSTOMERS2. MORE DIFFICULT FOR COMPETITORS TO ASSESS3. APT TO BE UNIQUE 6-17
  18. 18. REQUISITES FOR THE LEARNING ORGANIZATION CreatingVisionary Target & Information x x x & x Executionleadership trajectory systems striving Exhibit 6-13 6-18
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