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8/3/2019 IIPM Marketing Strategy 3b
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Marketing Strategy
-Strategic Options and
Choices(1)
ByK. Sashi Rao
Training and Management Consultant
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STRATEGIC OPTIONS
Basic purpose is to develop strategies to enlarge thescope of a firms operations and activities
This can be done by adopting either singly or incombination the broad options of growth, stability orretrenchment/withdrawal
A firms strategy is basically concerned with its
choice of businesses, products and markets that itwishes to be engaged in
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DEVELOPING STRATEGICOPTIONS
SWOTANALYSIS
ORGANIZATIONAL
PURPOSE
ENVIRONMENTAL
BASED OPTIONS
-Generic strategies
-Market options
-Expansion methods
RESOURCE
BASED OPTIONS
-Resource driven
-Value chain
-Cost reductionRANGE OF
STRATEGIC
CHOICES
FINAL
STRATEGIC
OPTION SELECTION
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STRATEGIC FORMULATION
- Framework
External
Environment
AnalysisObjectives
Goals
Targets
Internal
Environment
Analysis
Gap Analysis
Key Success
Factors
SWOT
Analysis
Product-Market
Portfolio
Analysis
Growth
StrategiesStrategy
Formulation
Strategic Plan
Business/
Cooperative
Strategies
Strategy
Implementation& Evaluation
Values, beliefs
Vision StatementMission
Statement
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STRATEGIC GROWTH
OPTIONS Growththro increased market size, market share
and by acquiring similar businesses
Growththro other businesses by diversification
into unrelated areas Growth via economic results and profitability
yardsticks
Growth determined by its existing resources and
capabilities by higher productivity
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STRATEGIC CHOICE
- the definition Strategic choice seeks answers to What shall we
do?; How do we go about it? And How do weget things done
Many available options exist- based onenvironmental and internal factors;growth/expansion/stability and others
Hence, strategic choice becomes complex,
unwieldy, time consuming and often confusing as itthrows up contradictory choices
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PRODUCT/MARKET GRID(
Ansoff)
MARKET
PENETRATION
PRODUCT
DEVELOPMENT
MARKET
DEVLPMNT. DIVERSIFICATION
CURRENT
PRODUCTS
NEW
PRODUCTS
CURRENT
MARKETS
NEW
MARKETS
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PRODUCT/MARKET GRID
(Ansoff)-advanced
MARKET
PENETRATION
PRODUCT
DEVELOPMENT
MARKET
DEVLPMNT. DIVERSIFICATION
CURRENT
PRODUCTS
NEW
PRODUCTS
CURRENT
MARKETS
NEW
MARKETS
Withdrawal
Focused attention
Privatization
Related markets
Unrelated marketsMore
Customers
More
Products
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EXPANSION METHOD MATRIX
Internal
Development
( as already
covered)
Merger
Acquisition
Joint venture
Alliance
Franchise
Exporting
Overseas offices
Overseas manufactureMNC operation
Global operation
Merger
Acquisition
Joint venture
AllianceFranchise
Turnkey
Licensing
COMPANYInside Outside
GEOGRAPHICAL
LOCATION
Home
Country
Overseas
Location
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GENERIC STRATEGIC
OPTIONS( Michael Porter)
COST
LEADERSHIP
DIFFERENTIATION
MARKET FOCUS
COMPETITIVE
SCOPE
COMPETITIVE ADVANTAGE
Narrow
Broad
Low cost Differentiation
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GENERIC STRATEGIES COST LEADERSHIP-aim here is to lower costs than ones
competitors without reduced quality and achieve economiesof scale; avoids costs to differentiate products
PRODUCT DIFFERENTIATION- attempts to differentiate
products thro innovation, added value and superior qualityand service ; offer unique selling proposition MARKET FOCUS- focus on particular market segments or
geographies to attain dominance
THESE STRATEGIES ARE NOT MEANT TO BE MUTUALLY
EXCLUSIVE AND CAN BE USED SINGLY OR IN COMBINATIONDEPENDING ON THE BUSINESS OUTLOOK AND ALSO LINKEDTO PRODUCT LIFE CYCLES
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GENERIC STRATEGIES
FRAMEWORK(1)COST
LEADERSHIPBROAD
DIFFERENTATION
COSTFOCUS
DIFFERENTIATIONFOCUS
Basis of competitive advantage
CompetitiveScope/TargetMarket
Narrow
Broad
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GENERIC STRATEGIES
FRAMEWORK(2)LOW COST
LEADERSHIPBROAD
DIFFERENTATION
LOW COSTFOCUS
FOCUSEDDIFFERENTIATION
Basis of competitive advantage
CompetitiveScope/TargetMarket
Narrow
Broad
BEST COSTPROVIDER
(Hybrid)
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GENERIC STRATEGIES (within
auto industry)- M.Porter Toyota- low cost producer based on cost leadership throhigh volumes, lean production, highly efficient supplychain/distribution and low servicing cost
GM-broad differentiation strategy by competing in most
segments and tries to differentiate thro better styling andinnovative features Hyundai- cost focus strategy by serving its narrow niche
markets at a lower cost and price than its rivals BMW/Mercedes- differentiation focus strategy catering to
its exclusive luxury clientele where superior quality andfeatures are offered and price is unimportant
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GENERIC STRATEGIES
- Some other examples Cost Leadership- Nirma /Hindustan Lever detergents;Reliance/Nokia/Motorola mobiles; Toyota/Hyundai cars
Product/Service Differentiation- Rolex/Omega/ watches;Reid & Taylor/Raymond suits; Nike/Adidas/Reebok shoes;
BMW/Mercedes/Rolls Royce cars; Amway/Tupperware;Citibank/American Express; Yatra.com/Make My Trip. COM
Market/Niche Focus- Cross pens, Tanishq jewellery, Arrowshirts, specialty restaurants, Italian shoes, medical tourism,adventure sports travel agencies, Deziree non-sugar sweets
for diabetics
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HYBRID STRATEGY- Best Cost Provider
Strategy/Toyota example Such a strategy was adopted for their Lexus cars range
By designing several high performance features to be comparable
in performance and luxury to BMW/Mercedes/Audi
Then transferring their low cost capabilities in making high qualityToyota models at lower cost than the luxury car makers
And then using its relatively lower manufacturing costs to offer
lower prices with comparable BMW/Mercedes models
Establishing a network of separate Lexus dealers dedicated toproviding personalized service to such niche market customers