The document outlines a comprehensive approach to product/market strategy, emphasizing the evaluation of current business momentum and environmental forecasts to formulate effective marketing strategies. It discusses the importance of identifying strengths and weaknesses, competitive positioning, and adapting strategies based on market conditions and consumer behavior. Additionally, it provides a framework for assessing strategic alternatives and the critical factors for success within different stages of industry maturity.

2. Product/Market Strategy SBU Strategy Strategy Evaluation Portfolio Analysis

3. 1. Start with the present. Predict momentum of the business over the planning period. 2. Forecast environment. 3. Modify prediction of momentum in light of the forecast of the environment. 4. Stop if predicted performance satisfies objectives, otherwise continue procedure. 5. Measure strengths and weaknesses of firm.

4. 6. Evaluate difference between yours and competitive marketing strategies. 7. Conceive more effective marketing strategies. 8. Evaluate risks, competitive response, potential payout of new marketing strategy. 9. Stop if new strategy appears satisfactory. 10. Otherwise broaden definition of present business and repeat steps 7, 8, 9. Look at other products that can be supplied to market.

5. 11. Continue step 10 until: knowledge of new area becomes thin cost of studying new area becomes too expensive prospects of finding a competitive opportunity become remote. 12. Lower the objectives, if necessary.

6. Examine key variables Refer to current status of product/market Define alternative strategies

7. Evaluate Profit payoff Investment costs Feasibility Risk Choose preferred strategy

8. Operational excellence Product leadership Customer Intimacy Combines one or more areas of the marketing mix. Supporting strategies may be used. Reflects the strengths of the firm. Formulated around the critical variables for each segment

9. Searching for new ways to compete Operational excellence Product leadership Customer Intimacy

10. Strategic Direction Distribution No-hassle service Systems Standard operating procedure Organization Central authority Finite empowerment Corporate Culture Predictable One-size-fits-all

11. Strategic Direction Ideas to Products Skillful marketing Systems Rewards innovation New product success Organization Ad hoc, Organic Flexible, Changes Corporate Culture Experimental Out of box thinking

12. Strategic Direction Provide solutions Improve customer’s business Systems Measures cost of service Customer loyalty Organization Empowerment Close to customer Corporate Culture Flexible Have it your way

13. Informed opportunism Direction and empowerment Friendly fact, congenial controls Different mirror Teamwork, trust, politics, power Stability in motion Attitudes and attention Causes and commitment

14. Embryonic Growth Maturity Aging

15. Growth rate Industry potential Product line Number of Competitors

16. Market share stability Purchasing patterns Ease of entry (not due to capital considerations) Technology

17. Rapid sales growth Changing technology Fragmented and shifting Market shares High investments Not profitable Gaining position in developing market

18. Rapid growth in sales Customers, shares, technology gaining recognition Easy entry Capital borrowers Low to good earnings

19. Low volatility of market shares Competitors, technology, customers established Growth is relatively high High earnings Produce cash

20. Falling demand, limited growth Shrinking number of competitors Little product line variety Little investment

21. Dominant Strong Favorable Tenable Weak Nonviable

22. Controls strategy and/or behavior of competitors Has wide range of strategic options Is independent of competitors’ actions

23. Take independent stance or action Acting does not endanger long-term position Can maintain long-term position in face of competitors’ actions

24. Strengths that are exploitable Higher than average ability to improve position If in a niche, holds commanding position relatively secure from attack

25. Sufficient potential and strengths to warrant continuation in business Unlikely to improve position Marginally profitable In a niche, is profitable, but vulnerable

26. Unsatisfactory performance Strengths that may lead to improvement Has characteristics of stronger position, but suffers from past mistakes or current weaknesses Short-term--must change

27. Currently unsatisfactory performance Few strengths that may lead to improvement May take years to die

28. Competitive Position and Stages of Industry Maturity Grid suggests strategies associated with each position

29. Suitability Validity Feasibility Internal consistency Vulnerability Workability Timing

30. Suitability: Is there a sustainable competitive advantage? Validity: Are assumptions realistic? Feasibility: Does firm have the skills, resources, and commitments?

31. Internal consistency: Does strategy hang together? Vulnerability: What are the risks and contingencies?

32. Workability: Can we retain our flexibility? Timing: What is the appropriate time horizon?

34. Conceptual framework for generating strategic alternatives for different product/markets

40. Company’s perspective Competition’s perspective

41. Sales growth pattern Design and technical problems Sales/profit of allied products Years product has been on the market Casualty history of similar products Availability of dealers

42. Profit history Ease of entry Extent of initial investment Number of competitors Number of competitors left the industry Life cycle of the industry Critical factors for success

43. Stars Cash Cows Question Marks Dogs Product Sales Growth Rate Relative Market Share High Low Low High

44. Product Sales Growth Rate Relative Market Share High Low Low High Introduction Growth Maturity Decline

49. Stars Cash Cows Question Marks Dogs Product Sales Growth Rate Relative Market Share High Low Low High Success Sequence

50. Stars Cash Cows Question Marks Dogs Product Sales Growth Rate Relative Market Share High Low Low High Disaster Sequence

51. Stars Cash Cows Question Marks Dogs Product Sales Growth Rate Relative Market Share High Low Low High

52. Stars Cash Cows Question Marks Dogs Product Sales Growth Rate Relative Market Share High Low Low High

53. Overinvesting in low-growth segments Underinvesting in high-growth segments Misjudging segment growth Not achieving market share Losing cost effectiveness Not uncovering emerging high-growth segments Unbalanced business mix

54. BUSINESS STRENGTH INDUSTRY ATTRACTIVENESS Harvest/ Divest Selectivity/ Earnings Invest/ Grow

55. Market Size Market growth Industry profit Cycles Inflation recovery International market importance

56. Market position Competitive position Relative profitability

57. B u siness Sector Prospects Company’s Competitive Capabilities

58. Overall cost leadership Differentiation Focus

59. Based on Two Factors Strategic target Strategic advantage

60. Understand the industry Choose competitive niche in which to dominate Do not go toe-to-toe with any competitor