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CI 2.0 - Competitive Innovation IntelligenceArik Johnson
Presentation to KMWorld 2006 Audience in San Jose California October 31 on How the Principles of Disruptive Innovation, Risk Management, Corporate Governance and Enterprise Collaboration are Driving the Incorporation of Blog, Wiki, Social Networking, Free-Tagging, Prediction Market and other Web 2.0 Features and Capabilities into Traditional Competitive Intelligence Software
Competitive Intelligence for Market Researchers: an Exercise-Driven, Interact...Arik Johnson
Introduction to Competitive Intelligence Principles Workshop, Designed for a Market Research Audience and Delivered at the 2006 Institute for International Research (IIR) Market Research Event in Los Angeles, California October 22
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Johnny Depp Long Hair: A Signature Look Through the Yearsgreendigital
Johnny Depp, synonymous with eclectic roles and unparalleled acting prowess. has also been a significant figure in fashion and style. Johnny Depp long hair is a distinctive trademark among the various elements that define his unique persona. This article delves into the evolution, impact. and cultural significance of Johnny Depp long hair. exploring how it has contributed to his iconic status.
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Introduction
Johnny Depp is an actor known for his chameleon-like ability to transform into a wide range of characters. from the eccentric Captain Jack Sparrow in "Pirates of the Caribbean" to the introspective Edward Scissorhands. His long hair is one constant throughout his evolving roles and public appearances. Johnny Depp long hair is not a style choice but a significant aspect of his identity. contributing to his allure and mystique. This article explores the journey and significance of Johnny Depp long hair. highlighting how it has become integral to his brand.
The Early Years: A Budding Star with Signature Locks
1980s: The Rise of a Young Heartthrob
Johnny Depp's journey in Hollywood began in the 1980s. with his breakout role in the television series "21 Jump Street." During this time, his hair was short, but it was already clear that Depp had a penchant for unique and edgy styles. By the decade's end, Depp started experimenting with longer hair. setting the stage for a lifelong signature.
1990s: From Heartthrob to Icon
The 1990s were transformative for Johnny Depp his career and personal style. Films like "Edward Scissorhands" (1990) and "Benny & Joon" (1993) saw Depp sporting various hair lengths and styles. But, his long, unkempt hair in "What's Eating Gilbert Grape" (1993) began to draw significant attention. This period marked the beginning of Johnny Depp long hair. which became a defining feature of his image.
The Iconic Roles: Hair as a Character Element
Edward Scissorhands (1990)
In "Edward Scissorhands," Johnny Depp's character had a wild and mane that complemented his ethereal and misunderstood persona. This role showcased how long hair Johnny Depp could enhance a character's depth and mystery.
Captain Jack Sparrow: The Pirate with Flowing Locks
One of Johnny Depp's iconic roles is Captain Jack Sparrow from the "Pirates of the Caribbean" series. Sparrow's long, dreadlocked hair symbolised his rebellious and unpredictable nature. The character's look, complete with beads and trinkets woven into his hair. was a collaboration between Depp and the film's costume designers. This style became iconic and influenced fashion trends and Halloween costumes worldwide.
Other Memorable Characters
Depp's long hair has also been featured in other roles, such as Ichabod Crane in "Sleepy Hollow" (1999). and Roux in "Chocolat" (2000). In these films, his hair added a layer of authenticity and depth to his characters. proving that Johnny Depp with long hair is more than a style—it's a storytelling tool.
Off-Screen Influenc
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From Stress to Success How Oakland's Corporate Wellness Programs are Cultivat...
Strategy web
1. 1
Strategic Planning
• The process of developing and maintaining a fit between a compan y’s goals and
capabilities and its changing marketing opportunities
• It involves:
– Defining company vision/mission
– Specifying objectives
– Designing portfolio of products/businesses
– Coordinating functional strategies
Three Levels of Strategy in an Organization
Business unit strategy
• Mission
• Business goals
• Competencies
Business unit strategy
• Mission
• Business goals
• Competencies
Corporate strategy
• Vision
• Corporate goals
• Philosophy and culture
Corporate strategy
• Vision
• Corporate goals
• Philosophy and culture
Research &
development
Information
systems
Finance Marketing
Manufacturing
Human
resources
Functional strategy
2. 2
Components of Strategy
• Scope
• Breadth of strategic domain: number and types of industries, product lines, market
segments. Reflects company mission and strategic intent (vs. Strategic fit)
• MCI... Core business (long distance), Contiguous business (fastest growing sector -
communications related products: wireless paging, Internet, local service), Content
(invested $2 billion in News Corp): Vision of Bert Roberts, Chairman
• MMM
• PCL
• EllisDon
• Mattamy
Components of Strategy
• Goals and Objectives
• Desired level of accomplishment on one or more performance dimensions and the
growth vector
• Resource deployments
• Allocation of human, financial and other resources across businesses, markets, etc.
• Identification of a sustainable competitive advantage
• What are the distinctive competencies or strengths relative to competitors?
• MMM
• PCL
• EllisDon
• Mattamy
• Synergy
• Improving overall efficiency and effectiveness by exploiting syn ergies across
businesses and product markets
3. 3
Market Oriented Vision / Missions
COMPANY
PRODUCT-ORIENTED
VISION/MISSION
STATEMENTS
MARKET-ORIENTED
VISION/MISSION
STATEMENTS
Revlon We make cosmetics.
Disney We run theme parks.
Wal-Mart We run discount stores.
We sell lifestyle and self expression;
success and status;
memories, hopes and dreams.
We provide fantasies and
entertainment -- a place where
America still works the way it is
supposed to.
We offer products and services that
deliver value to middle Americans.
Market Oriented Vision / Missions
COMPANY
PRODUCT-ORIENTED
VISION/MISSION
STATEMENTS
MARKET-ORIENTED
VISION/MISSION
STATEMENTS
MMM
PCL
EllisDon
Mattamy
4. 4
The Strategic Marketing Process:
1. Situation and SWOT analysis
2. Market-product focus & goal setting
3. Marketing programs
1. Situation Analysis: The Three Cs
Company
Customers
Competitors
•Market Potential (size,
growth rate)
•Customer Behavior
(wants and needs,
segmentation, price
sensitivity)
•Market Potential (size,
growth rate)
•Customer Behavior
(wants and needs,
segmentation, price
sensitivity)
•Industry Structure
Analysis (entry/exit
barriers, buyers, sellers,
substitutes)
•Competitor Response
Profiles (capabilities,
current and future actions)
•Industry Structure
Analysis (entry/exit
barriers, buyers, sellers,
substitutes)
•Competitor Response
Profiles (capabilities,
current and future actions)
•Economic Analysis
(costs, break-even,
profitability)
•Company Fit
(strengths, weaknesses,
resources, culture,
goals)
•Economic Analysis
(costs, break-even,
profitability)
•Company Fit
(strengths, weaknesses,
resources, culture,
goals)
5. 5
Company considerations
• History / Culture
• Resources
• Existing portfolio
• Existing customer base
– characteristics, esp. vis a vis future market
– loyalty
• Experience
– with markets
– with marketing
Business Objectives
• Maximize profits
• Maximize shareholder returns
• Maximize market share
• Survival
• Social responsibility
8. 8
Designing the Business Portfolio
• Fit company strengths and weaknesses to the opportunities in the
environment
– Analyze current SBU’s
– Which SBU’s should receive more, less, or no investment?
– Develop growth strategies
2. Identify SBUs
• Single business standing alone from rest of company
• Having own competitors to equal or surpass
• Has own manager who is responsible for strategic planning and profit
• Examples?
9. 9
3. Evaluate your Current Portfolio
• The Boston Consulting Group (BCG) Matrix
• The General Electric (GE) Approach
Portfolio Analysis: The BCG Matrix
10. 10
Strategies Associated with the BCG Matrix
• Business unit strategy:
Manage your portfolio
• Marketing/product strategy:
Build
Hold
Harvest
Divest
Limitations of the BCG
• Beyond growth rate:
– Barriers to entry
– Long term, stable consumer demand
– High ROI relative to other options
• Beyond market share:
– Technological leadership
– Related competencies
• Distribution strength
• Supplier relationships
• Management skills
• Leverage/extend brand equity
11. 11
General Electric’s stoplight strategy chart
Marketattractiveness
Business position
Strong Medium Weak
High
Medium
Low
Green band = “Go” signal = Build Yellow band = “Caution” signal = Hold
Highoverallattractivenessoverall
Low
overallattractiveness
M
edium
attractiveness
B A
C
Red band =
“Stop” signal = Divest
Competitive Analysis
• Market structure
– Leader
– Follower
– Nicher
• Defining competition
– Industry Based Definition
– Market Based Definition
• Substitutes
12. 12
Porter’s Five Forces
Bargaining
Power of
Suppliers
Bargaining
Power of
Buyers
Intensity of
Competitive
Rivalry &
Barriers to
Exit
Barriers to
Potential
Entrants
Substitutes
in Other
Industries
External environment
• Political trends-- “politically correct,” partisan
• Regulatory trends – what’s (il)legal
• Economic trends: macro, micro
• Social and Cultural trends
– Changing family, immigration
• Technological trends
• Other:
– Demographic trends
– Natural resources
13. 13
Agenda for Competitor Analysis
• Introduction
• Competitive Analysis
– Strengths and Weaknesses
– Behaviors
• Competitive Strategy for dealing with competition
– Game Theory
– Porter’s 5 Forces Framework
Competitive Analysis and Strategy
• Competitive analysis answers …
– What is driving competition in this industry or industries the firm may consider
joining?
– What actions are competitors likely to take, and what are the best responses?
– How will the industry evolve?
• … in order to set strategy, which answers
– How should the firm be positioned to compete in the long-run?
14. 14
Competitive Analysis
Current position and strategy
– Market share and sales
– Target market and positioning
– Marketing mix (4 P’s)
– Manufacturing and R&D
– Financial strength
Capabilities: Ability to…
– Design new products
– Manufacture
– Market
– Finance
– Manage
Future Goals
– Product portfolio
– Share or profit
– Product Differentiation or Cost
Leadership
Step 2: Market-product focus & goal setting
1. Set market & product objectives
2. Select target markets
3. Find points of difference
4. Position the product
15. 15
Step 3: Marketing Programs
Marketing MixMarketing Mix
Target MarketTarget Market
Product
Product Variety
Quality
Design
Features
Brand Name
Packaging
Sizes
Services
Warranties
Returns
Place
Channels
Coverage
Assortments
Locations
Inventory
Transport
Price
List Price
Discounts
Allowances
Payment
Period
Credit Terms
Promotion
Sales Promotion
Advertising
Sales Force
Public Relations
Direct Marketing
Current marketing
situation (3 C’s)
Opportunity and
issue analysis (3 C’s)
Objectives
Marketing strategy
(4 P’s)
Action programs
(4 P’s)
Project profit-and-
loss statement
Background data on sales, costs, profits, market,
competitors, distribution, and environment.
Identifies the main opportunities/threats,
strengths/weaknesses.
Defines plan’s financial and marketing goals in terms of
sales volume, market share, and profit.
Presents the broad marketing approach that will be used
to achieve the plan’s objectives.
Presents the special marketing programs designed to
achieve the business objectives.
Forecasts the plan’s expected financial outcomes.
The Marketing Plan
- Integrating the 3 C’s and the 4 P’s -
Adapted From: Philip Kotler, Marketing Management, pg. 89.
16. 16
Ansoff Product-Market Expansion Grid
Market Penetration
Market Development
Product Development
Diversification
Existing
Markets
New
Markets
Existing Products New Products
Strategy: Porter’s Five Forces Model
Industry
Competitors
Rivalry among
existing firms
Suppliers
Potential
Entrants
Customers
Substitutes
Threat of
new entrants
Bargaining power
of suppliers
Bargaining power
of customers
Porter’s Five Forces Model - Each Force is a Threat
Threat of
substitute offerings
17. 17
Existing Rivalry More Intense If:
• Numerous or equally balanced competitors
• Slow industry growth
• High fixed costs
• Low customer loyalties or switching costs
• Added capacity comes in large increments
• Diverse competitors
• High strategic stakes
• High exit barriers
– Specialized assets, emotional barriers, government and social restrictions (e.g.,
concerns for job losses, etc)
Threat of New Entry
• Barriers to entry
– Economies of scale
– Brand loyalties
– Capital requirements
– Switching costs independent of loyalties
– Access to distribution
– Cost disadvantages independent of scale
• Market Attractiveness
18. 18
Expected Reactions of Firms
• Conditions that signal strong retaliation
– Firms with history of retaliation to entrants
– Firms with substantial resources
• Cash and unused debt and/or equity capacity
• Excess productive capacity
• High leverage with channels or customers
– Firms with commitment to industry and high levels of idiosyncratic
assets employed in it
– Slow industry growth
The Entry Deterring Price
• Structure of prices that just balances ...
– the potential rewards from entry that are forecast by the potential entrant with
– the expected costs of overcoming structural barriers to entry and costs of
retaliation
• If prevailing prices exceed the entry deterring price, entry will occur
19. 19
Bargaining Power of Customers
• Customers compete for lower prices
• Customers tend to be powerful when …
– They represent a large portion of the firm’s sales
– Offerings represent large portion of their expenditures
– Offerings are undifferentiated
– Switching costs are low
– They pose a credible threat of backward integration
– Quality of offerings is not important to them
– They have full information
• Big customers are attractive and dangerous (e.g., Walmart)
Bargaining Power of Suppliers
• Suppliers “compete” with the industry by trying toforce costs higher
• Suppliers tend to be powerful when …
– They are concentrated
– There are few substitutes to their offerings
– The industry is not an important customer of theirs’
– Their offerings are important inputs to the firm’s
– Their offerings are differentiated or there are high switching costs
– They pose a credible threat of forward integration
– They have full information
20. 20
Customer or Competitor Orientation?
• Focus on competitors: Aggressive and alert for changes
• Focus on customers: Align resources to customer needs
• Which is better?
• Which is more common?
Porter’s 4 Generic Business Strategies
Source of Competitive Advantage
Broad
Target
Narrow
Target
Lower Cost Differentiation
Differentiation
Focus
CompetitiveScope
Cost
Leadership
Differentiation
Cost Focus
21. 21
Market Life Cycle
High
Price
Low
Low
Cost-to-serve
High
*Selected products /
selected markets
*Problem solving
emphasis
*Customer needs
knowledge
*Product/Market
expansion
*Competitive activity
*Knowledgeable
customers *Product/market
proliferation
*Market volatility
*Aggressive customer
Changing the players
• Bring in customers - Increase industry demand.
• Educate consumers about your product
• Pay customers (esp. early adopters)
• Subsidize some customers, other full paying customers will follow (Initial discount to lower
risk)
• Become your own customer
• Bring in suppliers
• Bring in complementors
• Do it yourself.
• Encourage complementors to come (Banking)
• Bring in competitors
• License technology to make money, avoid complacency
• Create a second source to encourage buyers to adopt technology
22. 22
Changing the added value
• Limit your supply
• DeBeers and diamonds
• Raise amount consumers are willing to pay
• Policies that build loyalty (frequent flier miles) increase willingness to pay - GM / Ford credit
cards; Intuit
• Lower competitors’ value
• Questions to ask:
• What is your added value?
• How can you increase value by changing supply, buyers, suppliers, complementors, or
substitutorsin your value net?
• What is the value added by other players? Should you be increasing or decreasing their
added values?
Changing the rules
Questions to ask are:
• Which rules are helping you? Which ones are hurting you? Rules can be for pricing,
advertising, product variety, satisfaction, etc.
• What kinds of contracts are you willing to write with your buyers and suppliers? Do
you want Match Competition Clauses? What does this do for you?
• Do you have the power to change the rules? Does someone else have the power to
overturn them?
• Can you signal your commitment credibly
23. 23
Changing tactics
Questions to ask are:
• How do other players perceive the game? How do these perceptions affect the play of the game?
• Which perception do you want to keep, which to change?
• Do you want the game to be transparent or opaque? When do you want to send signals that benefit
you? When do you want to preserve the fog?
• To establish credibility (clear the fog)
– Accept a pay-for-performance contract
– Offer guarantees or advertise
– Ask others to demonstrate their credibility to you
• To preserve the fog
– Create complexity (long distance calling rates)
– Bluff: Ask yourself whether you will be believed and under what circumstances
– Ask what others stand to gain by preserving the fog, and what they could be bluffing about
Changing tactics
• Competitive stances that can be used to clear / add to the fog
Top Dog Fat Cat
Puppy Dog
Lean &
Hungry
Being Big
Being Small
Appear
Tough
Appear
Soft
24. 24
• Fishbowl. This exercise brings everybody with an ax to grind on a given issue together in one room,
with advocates of certain points of view in the center of the
• Red team / blue team. assign managers to teams representing major competitors and have them plan
the strategies they would use to beat us.
• Future mapping. This is a fancy name for a way of looking at different scenarios for the future. We
look at several alternative futures, or "end states," for our business, assign a probability to each
one, and identify the forces that will determine whether that scenario will happen.
The Strategy Game
Strategic objectives for share leaders
• Typically the pioneer or initial entrant
• Share maintenance objectives
• Retain current customers by:
– Maintaining and improving loyalty
– Encourage / simplify repeat purchase
– Reduce attractiveness of switching
• Stimulate selective demand among later adopters
– Head-to-head positioning against competition
– Differential positioning against competition
25. 25
Strategic choices for share leaders
Competitor
or potential
competitor
Flanker strategy: Proactive / Reactive
Confrontation
Strategy
Proactive /
Reactive
Market
Expansion
Contraction /
Strategic
withdrawal
Fortress /
Position
defense
Leader
Fortress or position defense
Primary objective • Increase satisfaction, loyalty, repeat
purchase
• Build on strengths to keep current
customers; use same tactics to appeal to
late adopters
Market characteristics • Relatively homogeneous market
• Strong preference for leader’s product in
the largest segment
Competitors’ characteristics • Current / potential competitors have
limited resources and competencies
Firm’s characteristics • High awareness and preference for leader’s
product
• Marketing and R&D resources exceed
competition’s.
26. 26
Flanker strategy
Primary objective • Protect against loss of specific segment
• Develop a second “filler” entry
• Attract customers in the segment
Market characteristics • Two or more major segments with distinct
needs and purchase criteria
Competitors’ characteristics • One or more current or potential
competitors
• Have resources to implement a
differentiation strategy
Firm’s characteristics • Current product weak on at least one
attribute for a major segment
• Firm has resources to develop and launch a
second offering for disaffected segment
Confrontation strategy
Primary objective • Protect loss of share among current
customers
• Meet/beatcompetitive offerings head-on
• Get new customers who may be
attracted to competitors
Market characteristics • Relatively homogeneous market
• Little preference for leader’s product in the
largest segment
Competitors’ characteristics • One or more potential competitors
• Sufficient resources and competencies to
implement head-to-head strategy
Firm’s characteristics • Current product suffers from low
awareness, preference, loyalty in a major
segment
• Firm has resources (R&D, marketing)
comparable or greater than competitor
27. 27
Market expansion strategy
Primary objective • New products or line offerings
• Aimed at new applications / users
• Improve ability to retain customers as
market fragments
Market characteristics • Heterogeneous market
• Multiple product uses requiring different
product or service attributes
Competitors’ characteristics • Current / potential competitors have limited
resources / competencies in R&D and
marketing
Firm’s characteristics • No offerings in one or more application
segments
• Firm has relative competencies in R&D
and marketing
Contraction strategy
Primary objective • Increase ability to attract new customers
in selected high growth segments
• Withdraw from slower growing
segments to conserve resources
Market characteristics • Heterogeneous market
• Segments with different growth potential
• Multiple product uses requiring different
product / service attributes
Competitors’ characteristics • One or more current / potential competitors
with resources to mount a strong challenge
in growth segments
Firm’s characteristics • Current product suffers from low
awareness, preference, loyalty in one or
more major growth segment
• Firm’s resources limited vis-a-vis one or
more competitor
28. 28
Strategic objectives for followers
• Capture repeat / replacement purchases from current customers of the leader or
other target competitor by:
• Head-to-head positioning against competitor’s offering in primary target
market (athletic footwear, PCs)
• Technological differentiation from target competitor’s offering in a primary
target market
• Stimulate selective demand among later adopters by:
• Head-to-head positioning against target competitor’s offering in established
market segments
• Differentiated positioning focused on untapped or underdeveloped
segments
Strategic choices for challengers
Target
competitor Challenger
Flanking attack
Frontal
Attack
Leapfrog strategy
Encirclement strategy
Guerrilla
attacks
29. 29
Who should a follower attack?
• Attack the share leader within its primary target market
• Most to lose, but also most likely to retaliate - in a few geographic markets?
• Attack another follower who has an established position within a major market
segment
• Attack one or more smaller competitors who have only limited resources
• Avoid direct attacks on any established competitor
Frontal attack
Primary objective • Capture substantial repeat / replacement
buyers from target competition
• Attract new customers from later
adopters via better price / features
Market characteristics • Homogeneous market
• Little preference or loyalty for existing
brands
Competitors’ characteristics • Vulnerable to direct attack
• Few R&D and marketing resources
Firm’s characteristics • Stronger R&D, marketing resources than
target competitor and / or
• Lower operating costs
30. 30
Leapfrog
Primary objective • Induce current buyers to switch to a
superior product offering
• Attract new customers via superior
benefits
Market characteristics • Relatively homogeneous w.r.t. customer
needs and purchase criteria
• Some needs or criteria are currently
unfulfilled
Competitors’ characteristics • One or more current competitors has strong
marketing competencies but relatively
weaker R&D capabilities
Firm’s characteristics • Firm has proprietary technology
• Has necessary marketing and production
resources to stimulate and meet primary
demand for next generation products
Flank attack
Primary objective • Attract share of new customers in
market segments where needs are
different from those of early adopters
Market characteristics • Two or more segments with distinct needs
• Needs of at least one segment not currently
met
Competitors’ characteristics • Strong target competitor able to withstand
direct attack
Firm’s characteristics • Resources limited but sufficient to
penetrate and serve at least one major
market segment
31. 31
Encirclement
Primary objective • Attract share of new customers in
several smaller, specialized segments
whose needs are different from those of
early adopters
Market characteristics • Heterogeneous
• Some segments not currently served
Competitors’ characteristics • Strong competitors capable of withstanding
direct attack
Firm’s characteristics • Decentralized and adaptable management
structure
• Resources to serve several small segments
Guerrilla attack
Primary objective • Capture modest share of repeat,
replacement purchases in several market
segments or territories
• Attract a share of new customers in a
number of existing segments
Market characteristics • Heterogeneous market, several segments
• Needs of most currently being satisfied by
competition
Competitors’ characteristics • Number of strong competitors capable of
direct attack
Firm’s characteristics • Limited resources
• Decentralized and adaptable management
structure
32. 32
Rubbermaid’s growth strategy
Objectives for the 1990s
1. Corporate objective is to increase sales, earnings, and EPS 15% a year, while achieving a 20% return
on shareholders’ equity
2. Pay approx. 30% of current year earnings as dividends to shareholders while using the remainder to
fund future growth
3. Each year, 30% of sales are projected to come from new products introduced over the past 5 years. It is
planned to enter an entirely new market every 12 to 18 months
4. The objective for customers and consumers is to offer the best value possible. Highest quality
products at a reasonable price, a continuous flow of new products, and exceptional service to
customers
5. Treat all constituents fairly and consider the interests of associates as individuals
6. Aim to be an environmentally responsible corporate citizen
Rubbermaid’s growth strategy
• Incremental growth
• Focus on growth within the company’s businesses that was responsive to customer needs and in turn,
provided value to these customers
• Leap growth
• High visibility and high vulnerability
• Win big or lose big
33. 33
Rubbermaid’s incremental growth strategy
• To increase the value of Rubbermaid’s existing products. The key to this growth area was in
providing value to dealers, distributors, and consumers. The key to value is providing quality, low
cost and service
• To upscale existing products to meet today’s consumer and new design preferences. Upscaling
includes introducing new colors to existing lines
• To extend existing lines to capitalize on product successes, increase retail shelf space, and boost
sales volume
• To expand Rubbermaid’s international business as a significant growth opportunity during the
1990s
Rubbermaid’s leap growth strategy
• To develop new products. Goal is to have at least 30% of annual sales
coming from new products introduced during the past 5 years
• To hone product lines and optimize the number of stock units retained to
keep the lines manageable and provide proper customer service le vels
• To enter entirely new markets. This is consistent with the corporate
objective to enter a new market every 18-24 months
• To engage in joint ventures or acquisitions to enter new markets by
combining the capabilities of a strong outside partner with themany
strengths of Rubbermaid
34. 34
Implications
High
Price
Low
Low
Cost-to-serve
High
C
B
D
A
Value axis
Power axis
1
2
4
3
Growth markets
• Share gains are easier. Due to
• Gaps or undeveloped segments in the market
• Lower risk of retaliation from share leader given growth
» Problem: Leader has higher expectations given growth
• Share gains are worth more
• Based on the expectation that earnings produced by each share point expands as market
expands. This depends critically upon
» Changes in technology and other success factors
» Competitive structure (large number of new entrants: PC)
» Market fragmentation
• Price competition less intense?
• Early entry necessary to maintain technical expertise
35. 35
Marketing strategies for mature markets
Maintain current market share
• Maximize flow of profits over the remaining life which (could be several
decades)
• Need to maintain repeat purchases via customer satisfaction
• For large players
– Use fortress defense to
» improve customer satisfaction and loyalty
» encourage and simplify repeat purchasing
– Expand product line or launch flanker brands
• For small players
– Avoid prolonged direct confrontation with the “big guys”
– Niche strategy
Extend volume growth....(later)
Marketing strategies for mature markets
Extend volume growth
• Sales depend upon
(1) Number of persons buying product
(2) Number of units purchased per person
(3) How often the product is purchased
• So, one of the following strategies can be used
– Increased penetration strategy
– Increased frequency of use
– Wider variety of uses
• Market expansion strategy
– Underdeveloped domestic markets (BDI / CDI analysis)
– New customer or application segments
– Produce private labels
– Global expansion via sequential strategies
36. 36
Marketing strategies for mature markets
• Assess the relative attractiveness of declining markets
• Conditions of demand
– speed of decline, certainty of decline, existence of pockets of enduring demand,
extent of product differentiation in market, price stability
• Exit barriers
– reinvestment requirements, amount of excess capacity, age of assets, resale
market for assets, extent of facilities shares with other SBUs, extent of vertical
integration, number of single product competitors
• Intensity of future competitive rivalry
– bargaining power of customers, customer switching costs, diseconomies of scale
Marketing strategies for mature markets....
• Divestment or liquidation
• Strategies for remaining competitors
• Harvesting
• Maintenance
• Profitable survivor
• Niche
37. 37
Problem
• Not easy to tell when a market has reached maturity
• Variations in brands, marketing programs, and customer groups can mean that
different brands and segments reach maturity at different times
• Industry stability also affected by threats and opportunities
• Customer preferences can shift
• Product substitutes may appear
• Raw material costs may increase
• Changes in government regulation
• Entry of low-cost foreign producers
• Mergers and acquisitions
• Product improvements
• Process technology improvements
• Other environmental factors
Strategic issues
• Shakeout
• declining growth rate
• potential for overestimating future demand, hence over capacity
• competition intensifies as volume increases needed to cover fixed costs
• weaker businesses fail, withdraw or acquired
• Maturity
• volume stabilizes
• replacement sales dominate
• continued satisfaction and loyalty of existing customers key
• not all segments and all brands reach maturity simultaneously
• possibility of extending life via new uses, applications or creative marketing
• Decline
• divest, liquidate or hang-on?
• consolidation
38. 38
Shakeout
• Excess capacity
• More intense competition
• Difficulty in maintaining differentiation
• Distribution problems
• Pressures on prices and profits
Strategic traps during shakeout
• Failure to recognize events signaling the beginning of a shakeout
...hence optimistic forecasts
• Stuck without a clear strategic advantage during shakeout
• Failure to recognize declining importance of product differentiation and increasing
importance of price and / or service
• Giving up market share in favor of short term profits
...hence priced out of the market
39. 39
Strategies to beat the commodity magnet
• Pro-active strategies
• Value-added strategy
• Process innovation strategy
• Reactive strategies
• Market focus strategy
• Service innovation strategy
• Demand side: Value added & Market focus
• Supply side: Process innovation & Service innovation
International Marketing Strategy
• Strategic Alliances
• Global Companies
– International Firm
• Take our domestic practices overseas
– Multinational firm
• Customize strategies to each market
– Global firm
• Standardize strategy globally
40. 40
Global Market Entry Strategies
• Exporting
• Licensing
• Joint Venture
• Direct Investment
International Environment Trends
• Political: stability, sentiment
• Regulatory: trade regulations, tariffs, quotas
• Economic: exchange rates
• Social and Cultural: ethnocentrism
41. 41
The NewProd Scoring Model
Very Good
(10)
Good
(8)
Average
(6)
Poor
(4)
Very Poor
(2)
Sub-factor Sub-factor
Weight
EP EV EP EV EP EV EP EV EP EV TOTAL
EV
Sub-factor
Evaluation
Product
Superiority
1 .1 1 .2 1.6 .5 3.0 .2 0.8 - - 6.4 6.4
Unique
features for
users
1 .1 1 .2 1.6 .4 2.4 .2 0.8 .1 0.2 6.0 6.0
Reduce
customer
costs
3 .3 3 .4 3.2 .2 1.2 .1 0.4 - - 7.8 23.4
Higher
quality than
competitors
1 .1 1 .2 1.6 .5 3.0 .2 0.8 - - 6.4 6.4
Does unique
task for user
2 .5 5 .4 3.2 .1 0.6 - - - - 8.8 17.6
Priced lower
than
competition
2 - - .2 1.6 .5 3.0 .3 1.2 - - 5.8 11.6
10 TOTAL 71.4
• To help evaluate ideas generated
Steps in the Design Process
Opportunity
Definition
Refinement
• Marketing
• R&D
• Engineering
• Production
Evaluation
Customer Measurement
1. Qualitative measurement to identify
issues
2. Quantitative measurement for input
to models
Summary of Customer
Perception
Segments
Product Features
Preference
Choice
“What-if” Forecasts
1. Aggregate Individuals
2. Awareness & Availability