business strategies and their marketing implications
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Business Strategies and Their Marketing Implications. 3. 3m. SBUs Industrial & Transportation (adhesives & filters) Health Care Consumer & Office Sector Electro & communications sector Display & Graphics sector New Product Devlopment 30% of annuals from new products. - PowerPoint PPT PresentationTRANSCRIPT
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McGraw-Hill/Irwin©2008 The McGraw-Hill
Companies, All Rights Reserved
CHAPTER
THREE
Business Business Strategies Strategies
and Theirand Their
Marketing Marketing ImplicationsImplications
3
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3m
SBUs Industrial & Transportation (adhesives &
filters)
Health Care
Consumer & Office Sector
Electro & communications sector
Display & Graphics sector
New Product Devlopment 30% of annuals from new products
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Scotch-Brite Never Rust
Invest in new plants
Big Ad budget
Maintain profitability in other lines Post-it notes
Magic Transparent Tape
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Discussion Question
2. On what basis do businesses compete?
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Porter’s Generic Strategies
Overall Low Cost Leadership
Differentiation
Focus
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Robert Miles & Charles SnowProspector
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Defender
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Analyzer
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Reactor
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Exhibit 3.2
Combined Typology of Business-Unit Competitive Strategies
Co
mp
etit
ive
stra
teg
y
Dif
fere
nti
atio
nC
ost
lea
der
ship
Emphasis on new product-market growthHeavy emphasis No emphasis
Prospector Analyzer Defender Reactor
Units primarily concerned with attaining growth
through aggressive
pursuit of new product-market opportunities
Units with strong core bus.;
actively seeking to expand into rel. prod-mkts
with differentiated
offeringsUnits with strong
core bus.; actively seeking to expand into rel. prod-mkts with low-cost
offerings
Units primarily concerned with maintaining a differentiated
position in mature markets
Units primarily concerned with maintaining a
low-cost position in
mature markets
Units with no clearly defined product-market development or
competitive strategy
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Single Business Firms
Belvedere Vodka
Startups
Start Life as Prospectors
Services
Emirates Airline
Differentiated analyzer
Global Competitors
One of the analyzer strategies
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How Business Strategies Differ in Scope, Objectives, Resource Deployments, and Synergy Exhibit 3.4.
Dimensions•Scope
•Goals and obj. Adaptability (new product success) Effectiveness • (inc. mrkt share) Efficiency (ROI)•Resource deployment•Synergy
Low-cost defenderMature/stable/well-defined domain; mature tech.and cust. segments
Very little
Low
HighGenerate excess cash (cash cows)
Need to seekoperating synergies to achieve efficiencies
Differentiated defenderMature/stable/well-defined domain; mature tech.and cust. segment
Little
Low
HighGenerate excess cash (cash cows)
Need to seek operating synergies to achieve efficiencies
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How Business Strategies Differ in Scope, Objectives, Resource Deployments, and Synergy Exhibit 3.4.
Dimensions•Scope
•Goals and obj. Adaptability (new product success) Effectiveness (inc. mrkt share) Efficiency (ROI)•Resource deployment•Synergy
ProspectorBroad/dynamic domains; tech. and cust. segments not well-established
Extensive
HighLowNeed cash for product dev. (? or *)
Danger in sharing operating fac. and programs - better to share tech./mktg skills
AnalyzerMixture of defender and prospector strategies
Mix. of defender & prospector strats.
Mix. of defender & prospector strats.
Mix. of def. & prosp. strats Need cash for prod. dev. but < prospectors
Danger in sharing operating fac. and programs - better to share tech./mktg. skills
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Let’s combine the two perspectives and examine the book retailing industry
Co
mp
etit
ive
stra
teg
y
Dif
fere
nti
atio
nC
ost
lea
der
ship
Emphasis on new product-market growthHeavy emphasis No emphasis
Prospector Analyzer Defender Reactor
Units primarily concerned with attaining growth
through aggressive
pursuit of new product-market opportunities
Units with strong core bus.;
actively seeking to expand into rel. prod-mkts
with differentiated
offeringsUnits with strong
core bus.; actively seeking to expand into rel. prod-mkts with low-cost
offerings
Units primarily concerned with maintaining a differentiated
position in mature markets
Units primarily concerned with maintaining a
low-cost position in
mature markets
Units with no clearly defined product-market development or
competitive strategy
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Discussion Questions
3. How might the Internet change how firms compete? Are these strategy typologies obsolete?
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Discussion Questions
4. What sorts of market, technological, and competitive conditions call for which of these strategies? What strengths are required for success with each?
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Prospector Industry & Market
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Prospector Technology
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Prospector Competition
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Prospector Business’s relative Strengths
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Analyzer I&M
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Analyzer Technology
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Analyzer Competition
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Analyzer BR strengths
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D Defender I&M
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D Defender Technology
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D Defender Competition
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D Defender BR Strengths
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LC Defender I & M
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LC Defender Technology
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LC Defender
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LC Defender
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Discussion Questions
5. What sort of marketing mix (4 P’s) is typically appropriate for each of these strategies? Can we generalize?
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Fit versus Future
Microwave Popcorn
1970s Pillsbury rejected idea of microwavable food.
ActII