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Marketing Strategy Study Notes
A look into the frameworks and major themes of the course from lectures and text book
- Marketing Strategy Study Notes Table of Contents
- Week 1 - Introduction to Marketing Strategy
- Week 2: Strategic Analysis - Customer and Competitor Analysis
- Week 3: Strategic Analysis - Market and Environmental Analysis
- Week 4: Internal Analysis and Creating Advantage
- Week 5: Alternative Value Propositions and Building and Managing Brand Equity
- Week 6: Energising and Leveraging the Business
- Week 7: Creating New Business and Global Strategies
- Week 8: From Silos to Synergy - Harnessing the Organisation
- Week 9: Red and Blue Ocean Strategy
- Week 10: Contemporary Marketing Issues
- Week 13: Course Review
The textbook and most lecture follows this structure. The course goes through each element as a way to develop a SCA. Within this there are only four areas of marketing strategy from which firms can compete. They are:
- (^) Products-market investment strategies
- (^) Customer value proposition
- (^) Assets, competencies, and synergies
- (^) Functional strategies and programs
accountability, a deep understanding of the product or service, being close to the customer, and fast response, all of which are good things. However, in its extreme form, autonomous business units can lead to the misallocation of resources, redundancies, a failure to capture cross-business potential synergies, and confused brands. The challenge is to adapt the decentralisation model so that it no longer inhibits strategy adaptation in dynamic markets.
- Creating sustainable competitive advantages (SCAs). Creating strategic advantages that are truly sustainable in the context of dynamic markets and dispersed business units is challenging. Competitors all too quickly copy product and service improvements that are valued by customers. What leads to SCAs in dynamic markets? One possible cornerstone is the development of assets such as brands, distribution channels, or a customer base or competencies such as social technology skills or sponsorship expertise. Another is leveraging organisational synergy created by multiple business units, which is much more difficult to copy than a new product or service.
- Developing growth platforms. Growth is imperative for the vitality and health of any organisation. In a dynamic environment, stretching the organisation in creative ways becomes an essential element of seizing opportunities and adapting to changing circumstances. Growth can come from revitalising core businesses to make them growth platforms as well as by creating new business platforms. The Product-Market Investment Strategy: Where to Compete This matrix is important and must me understood.
Functional Strategies and Programs A target value proposition, or a set of assets and competencies, should mandate some strategy imperatives in the form of a supportive set of functional strategies or programs Functional strategies or programs that could drive the business strategy might include a:
- Customer relationship program
- Brand-building strategy
- Social technology strategy
- Communication strategy
- Information technology strategy
- Distribution strategy
- Global strategy
- Quality program
- Sourcing strategy
- Logistical strategy
- Manufacturing strategy Over view of Strategic management
Lecture
Philosophy of the course “The strategist’s method is very simple to challenge the prevailing assumptions with a single question: why? and to put the same question relentlessly to those responsible for the current way of doing things until they are sick of it” - Kenichi Ohmae in The Mind of the Strategist: The Art of Japanese Business What is strategy
Quotes “Strategy is the creating of a unique and valuable position, involving a different set of activities” - Micheal Porter in What is Strategy “Four dimensions define business strategy: the product-market investment strategy, the customer value proposition, assets and programs. The first specifies where to compete and the remaining three indicate how to compete to win” Daivd Asker in Strategic market management (the textbook) These quotes imply that strategy incorporates
- (^) Formulation aspects
- (^) Implementation aspects
- (^) Control aspects Overview of main areas of strategy The Product-market Investment strategy
- (^) Invest to grow (or enter a product market)
- (^) Invest only to maintain the existing position
- (^) Milk the business by minimising investment
- (^) Recover as many of the assets as possible by liquidation or divesting the business The Customer Value Proposition
- (^) Perceived benefit to customer
- (^) Functional
- (^) emotional
- (^) social
- (^) self- expressive Assets and Competencies
- (^) Strategic Competency
- (^) What a business unit dose exceptionally well
- (^) Has strategic importance to the business
- (^) Based on knowledge or a process
- (^) Strategic Asset
- (^) A resource Functional Strategies and Programs Strategy:
- (^) Manufacturing
- (^) Distribution
- (^) Brand-Building
- (^) Communication
- (^) Information Technology
- Strategy needs to be developed and executed in the context of a dynamic market. To cope, it is important to develop competencies in strategic analysis, innovation, managing multiple business, and developing SCAs and growth platforms.
- A business strategy includes the determination of the product - market investment strategy, the customer value proposition, assets and competencies, and the functional area strategy. A marketing strategy involves the allocation of the marketing budget over product markets, the customer value proposition by segment, the marketing assets and competencies, and the strategies of the functional areas of marketing.
- Strategic market management, a system designed to help management create, change, or retain a business strategy and to create strategic visions, includes a strategic analysis of the business to identify existing or emerging opportunities, threats, trends, strategic uncertainties, information need areas, scenarios, and strategic alternatives. It should precipitate strategic choices, help a business cope with change, force a long-term view, make visible resource allocations, aid strategy analysis and decisions, provide management and control systems, and enhance communication and coordination.
- The CMO role has grown over the years and is now often charged with being a partner in developing strategies and a vehicle to deal with the dysfunctions of the product- market silos.
Week 2: Strategic Analysis - Customer and Competitor Analysis
The first step in marketing strategy is examining the customer and the competitor. Moreover, in this weeks lecture there are several alternative strategic planning framework to compare with the one in the text. These are:
- (^) The resource based view
- (^) Porter’s Positioning School of strategy formation
- (^) D’Avenis ideas of Hypercompetitioon
Chapter Two: External And Customer Analysis
Main Point This chapter is about internal and customer analysis. The author goes through the 'how to' to both and then goes into why they are important to the firm and the marketing strategist. THE EXTERNAL ANALYSIS: The Role of External Analysis Analysis There are three ways of handling uncertainty, as suggested by Figure 2.1. First, a strategic decision can be precipitated because the logic for a decision is compelling and/or because a delay would be costly or risky. Second, it may be worthwhile to attempt to reduce the uncertainty by information acquisition and analysis of an information-need area. The effort could range from a high-priority task force to a low-key monitoring effort. The level of resources expended will depend on the potential impact on strategy and its immediacy. Third, the uncertainty could be modelled by a scenario analysis.
Unmet Needs An unmet need is a customer need that is not being met by the existing product offerings. Unmet needs are strategically important because they represent opportunities for firms to increase their market share, break into a market, or create and own new markets. They can also represent threats to established firms in that they can be a lever that enables competitors to disrupt an established position. Key Learnings
- External analysis should influence strategy by identifying opportunities, threats, trends, and strategic uncertainties. The ultimate goal is to improve strategic choices—decisions as to where and how to compete.
- Segmentation (identifying customer groups that can support different competitive strategies) can be based on a variety of customer characteristics, such as benefits sought, customer loyalty, and applications.
- Customer motivation analysis can provide insights in to what assets and competencies are needed to compete, as well as indicate possible SCAs.
- Unmet needs that represent opportunities (or threats) can be identified by asking customers, by accessing lead users, by ethnographic research, and by interacting with customers.
Chapter Three: Competitor Analysis
Main Point This chapter focus on the competitor analysis, how to do a CA, how to get the information, and the importance of looking at strengths and weakness'. What Questions are involved in a competitor analysis? Different Competitors Direct Companies the firm is in direct competition with. Indirect Companies that the firms is still in competition with but may be slightly different in offerings or segments. Strategic groups
- A strategic group is a group of firms that:
- Over time pursue similar competitive strategies (for example, the use of the same distribution channel, the same type of communication strategies, or the same price/ quality position)
- Have similar characteristics (e.g., size, aggressiveness)
- Have similar assets and competencies (such as brand associations, logistics capability, global presence, or research and development)
How to understand competitors? Strengths and Weakness' of a competitor?
Key Learnings
- Competitors can be identified by customer choice (the set from which customers select) or by clustering them into strategic groups (firms that pursue similar strategies and have similar assets, competencies, and other characteristics). In either case, competitors will vary in terms of how intensely they compete.
- Competitors should be analysed along several dimensions, including their size, growth and profitability, image, objectives, business strategies, organisational culture, cost structure, exit barriers, and strengths and weaknesses.
- Potential strengths and weaknesses can be identified by considering the characteristics of successful and unsuccessful businesses, key customer motivation, mobility barriers, and value-added components.
- The competitive strength grid, which arrays competitors or strategic groups on each of the relevant assets and competencies, provides a compact summary of key strategic information.
Overview of Two Key Strategic paradigms A business strategy Position Resources Strategic Logic Established Position Leveraged Resources Strategic Steps -^ Identify an attractive market.
- (^) Locate a defensible position
- (^) Fortify and Defend
- (^) Establish Vision
- (^) Build Resources
- (^) Leverage across markets Sources of Advantage Unique, valuable position Unique, valuable. Inimitable resources Strategic Question Where should we be? What should we be?
The role of External analysis External analysis serves to see future trends, threats/opportunities and examine strategic uncertainties. An external analysis will influence the strategic decisions of the company. Strategic Uncertainties are essential to understand as they inform the strategic decision of weakness in the future. The goal in strategy is to limit and know the strategic uncertainties as to remain competitive.
