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B2B Strategy Making and Planning
1. Developing a market strategy involves studying how to exploit a firm's resources to achieve marketplace success, deciding on actions, and updating the strategy during implementation. 2. Business strategy is the cornerstone for market strategy and involves understanding a firm's core competencies, capabilities, and partners' resources to craft fundamental value-based strategies like product leadership, customer intimacy, and operational excellence. 3. Effective market strategies are informed by business strategies focused on unique resources and delivering superior customer value through innovation, customization, or efficiency.
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B2B Strategy Making and Planning
- 1. B2B Strategy Makingand Planning Overview
- 2. Overview • Developing market strategy – is the process of studying how to exploit a firm’s resources to achieve short- term and long-term marketplace success, deciding on what course of action to pursue, and flexibility updating it as learning occurs during implementation.
- 3. Crafting Market Strategy Business Strategy Update Business Strategy Resources: Fundamental Value Based Strategies Orderly Radical # Core competencies # Product leadership advance advance # Capabilities # Customer intimacy # Partners resource # Operational excellence Update Market Strategy Knowledge Orderly Radical Market Strategy • Deliberate advance advance What do we What do we How will we • Emergent know? want to do it? accomplish? Anderson, James, James Narus and Das Narayandas (2009), Business Market Management: Understanding, Creating, and Delivering Value, Third Edition, Prentice Hall.
- 4. Business Strategy theCornerstone for Market Strategy • Strategy is written more than any other topic in management practice • What is strategy? Porter contends that firms fail to distinguish between Operational effectiveness – “means performing similar activities better than rivals perform them” • Porter says Strategy “is the creation of a unique and valuable position, involving a different set of activities.
- 5. Business Strategy theCornerstone for Market Strategy A Resource Based View of the Firm • The resourced based view “sees companies as very different collections of physical and intangible assets and capabilities”. • No two companies are alike. • Resources are the building blocks for strategy.
- 6. Business Strategy theCornerstone for Market Strategy • Core Competencies – A core competence is “ a complex harmonisation of individual technologies and production skills” – As an example 3M Company has core competencies in substrates, coatings, and adhesives that it has brought together in distinct ways to create a number of successful businesses.
- 7. Business Strategy theCornerstone for Market Strategy • Capabilities – A capability is “a set of business processes strategically understood” – i.e. Woolworth's / Walmart – are examples of company’s with a capability, which closely coordinates business processes with its strategic suppliers to provide superior inventory turns.
- 8. B2B Brands asResources Overview
- 9. Definition of aPower Brand A power brand identifies a company, product or service and has high awareness and recall with customers and is associated with a very successful global company’s.
- 10. Advantages of PowerBrands • Improved perceptions of • Larger margins product performance • More inelastic consumer • Greater loyalty response • Less vulnerability to • Greater trade cooperation competitive marketing • Increased marketing actions communications • Less vulnerability to crises effectiveness • Possible licensing opportunities
- 11. DuPont Company • Dacron® • Teflon® • Lycra® • Kevlar®
- 12. IBM Company • IBMintegrates hardware, software, business consulting and IT services into business solutions to meet your goals. IBM also has strong alliances with partners to deliver business solutions.
- 13. 3M Company • 3Mis the industry leader in fire stopping. 3M dedicated to stringent testing and code developments help make buildings safer today than they were even 10 years ago. The product is backed by a brand as powerful as 3M, you get proven reliability and outstanding service.
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- 15. Nine ways tomanage your brand as an asset 1. Formally link business and brand strategy 2. Create a unique and relevant Brand Identity 3. Create a clear and distinct Positioning 4. Extend your brand strategically 5. Build a strategic Brand Architecture 6. Evaluate and align touch points 7. Consistently deliver on your Brand Contract 8. Practice effective global brand management 9. Set the organization up for success
- 16. Business Strategy Asthe Cornerstone For Market Strategy • Reliance On Outside Partners For Resources – Firms use collaborative relationships with other firms to gain access to resources and to leverage their own resources. – In a rapidly changing, technology drive markets, no one firm will possess all of the resources needed to create innovative products.
- 17. Business Strategy theCornerstone for Market Strategy Fundamental Value-Based Strategies • At the core of every successful strategy is understanding what targeted market segments that firms regard as superior value and how to provide it to them. • Three value based strategies product leadership, customer intimacy and operational excellence.
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- 19. Crafting Market Strategy Business Strategy Update Business Strategy Resources: Fundamental Value Based Strategies Orderly Radical # Core competencies # Product leadership advance advance # Capabilities # Customer intimacy # Partners resource # Operational excellence Update Market Strategy Knowledge Orderly Radical Market Strategy • Deliberate advance advance What do we What do we How will we • Emergent know? want to do it? accomplish? Anderson, James, James Narus and Das Narayandas (2009), Business Market Management: Understanding, Creating, and Delivering Value, Third Edition, Prentice Hall.
- 20. Business Strategy theCornerstone for Market Strategy • Product Leadership – Leading edge products and services that consistently enhance the customer’s use or application of the product, thereby making rivals obsolete. – Company pursues innovation relentlessly – Variety based positioning
- 21. Core Marketing Strategies:Product Leadership Strategic Direction Corporate Culture Ideas to Products Experimental Skillful marketing Out of box thinking Systems Organization Rewards innovation Ad hoc, Organic New product success Flexible, Changes
- 22. Business Strategy theCornerstone for Market Strategy • Customer Intimacy – Customer Intimacy “means segmenting and targeting markets precisely and then tailoring offerings to match exactly the demand of those niches”. – Retaining customers over time – Needs based positioning – Your share of the customers business
- 23. Core Marketing Strategies:Customer Intimacy Strategic Direction Corporate Culture Provide solutions Flexible Improve customer’s business Have it your way Systems Organization Measures cost of service Empowerment Customer loyalty Close to customer
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- 25. Business Strategy theCornerstone for Market Strategy • Operational Excellence – Operational Excellence means “ providing customers with reliable products or services at competitive prices and delivered with minimal difficulty or inconvenience. – Dell is an example of a company that has pursued operational excellence.
- 26. Core Marketing Strategies:Operational Excellence Strategic Direction Corporate Culture Distribution Predictable No-hassle service One-size-fits-all Systems Organization Standard operating Central authority procedure Finite empowerment
- 27. Value Innovation • Value innovation – instead of focusing on beating the competition you focus on making the competition irrelevant by creating a leap in value for buyers and your company
- 28. Strategy Canvas ofNetJets
- 29. The Four ActionFramework
- 30. Business Strategy theCornerstone for Market Strategy Strategy Making • How firms develop strategy is a topic of keen interest. • Who Makes Strategy? • Defining Purpose. • Implementing change if needed.
- 31. Business Strategy theCornerstone for Market Strategy • Who Makes Strategy? – Conventional view is that top management make strategy – Top down Vs Bottom up – Need to promote broader involvement of managers across the firm is preferable. – This requires a more democratic process of strategy making.
- 32. Business Strategy theCornerstone for Market Strategy • Defining Purpose – Cornerstone of strategy making is defining purpose in a mission or vision statement. – Purpose can also be defined as strategic intent (Hamal and Prahalad 1992)
- 33. Planning Market Strategy “Chance favours the prepared mind” Quote- Louis Pasteur
- 34. Planning Market StrategyIn Business Markets What Do we Know? • It is important to emphasize the word know • It is important to distinguish between what they know, what we believe, and what we want to believe. • We must be willing to challenge what they think we know.
- 35. Box 4.2 Market Informationessentials for Strategic Planning in Business Markets
- 36. Planning Market StrategyIn Business Markets What Do We Want to Accomplish? • Management team attempts to reach a shared agreement. • Marketing strategy begins with targeting segments and customer firms. • Setting Goals and Objectives • Positioning • Building Brands
- 37. Positioning in BusinessMarkets Establishing and (sustaining) an intended meaning Positioning: for a market offering in the minds of targeted customers Succinctly characterizes the specific type of Target: customer for the market offering that are of the most interest to the supplier Component specifies the essential attributes of the Offering market offering for the selected target, out of the Concept: potentially larger set of attributes that an offering might possess
- 38. Customer Value Propositions Value Favorable All Benefits Resonating Focus Proposition: Points-of-Difference Consist of: The one or two points-of- All benefits All favorable points-of- difference (and, perhaps, a customers difference a market offering point-of-parity) whose receive from a has relative to the next-best improvement will deliver the market offering alternative greatest value to the customer for the foreseeable future Answers the “Why should our “Why should our firm “What is most worthwhile for customer firm purchase purchase your offering instead our firm to keep in mind about question: your offering?” of your competitor’s?” your offering?” Requires: Knowledge of how own market Knowledge of Knowledge of own market offering delivers superior value own market offering and next best to customers, compared to offering alternative offering next-best-alterative offering Has the Requires customer value potential Benefit assertion Value presumption research pitfall:
- 39. Planning Market StrategyIn Business Markets How Will We Do It? • The question is about thinking through implementation of the market strategy. • Firms can propose the most wonderful sounding market strategies, but if they lack the requisite knowledge, skills, and abilities to put them into play, little will be accomplished.
- 40. Develop an ActionPlan • Translates the market strategy into the coordinated activities and specific resources the firm will use to attain what it wants to accomplish – Gain input from each functional area – Each objective or set of objectives is associated with a program or programs – Coordinate various market activities
- 41. Take Stock ofImplementation Skills A manager’s behavioral style of relating to others inside Interaction and outside the firm. Captures how a manager works Skills together with others, uses influence strategies, and negotiates. Allocation A manager’s expertise in budgeting time, people, and Skills money. Monitoring Manager’s ability to stay informed about what matters and Skills to recognize when to intervene in ongoing activities. Organizing Captures manager’s proficiency at drawing upon or Skills circumventing the formal organizational structure to bring together the resources to accomplish a market task.
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- 43. Summary • Crafting market strategy is the process of studying how to exploit a firm’s resources to achieve short term and long term success. • It requires significant participation from many functional areas. • Business Strategy involves a resource based view, product leadership or customer intimacy view of the firm.
- 44. Summary • Radical change versus orderly advance. • Through planning market strategy members of a management team can compare, revise and update individual market views, so as to devise alternative courses of action • We need to ask fundamental questions such as – What do we know? – What do we want to accomplish? – How we will do it?
- 45. You are welcometo contact Nigel Bairstow at B2B Whiteboard your source of B2B Asia / Pacific marketing advice http://www.linkedin.com/pub/nigel-bairstow/6/41b/726 http://twitter.com/#!/b2bwhiteboard http://b2bwhiteboard.com