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The Unique Nature ofIndustrial Marketing
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Industrial Marketing
Also called: Business-to-Business(B2B) and Organizational Marketing.
Definition: the creation andmanagement of mutually beneficialrelationships between organizationalsuppliers and organizationalcustomers.
Customer can be private firm, publicagency, or nonprofit organization.
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The Marketing Concept
Creating value for customerswith goods and services that
address organizational needs
and objectives.
3
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Marketing Concept
Three major components:
All company activities should beginwith, and be based on, therecognition of a fundamental customer
need.
A customer orientation should beintegrated throughout the functionalareas of the firm: production,
engineering, finance, R&D. Customer satisfaction is viewed asthe means to long-term profitabilitygoals.
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B2B Defined
The management process responsible
for the facilitation of exchange
between producers of goods and
services and their organisational
customers.
B2B marketing and purchasing is a
complex and risky business
involving a number of different
parties.
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Flows within a B2B market
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Differences between B2B and
consumer marketing (1 of 3)
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Differences between B2B and
consumer marketing (2 of 3)
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Differences between B2B and
consumer marketing (3 of 3)
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B2B customers
Commercial enterprises - profit making
organisations that produce and/or resell
goods and services for a profit. Can be
subdivided into users, originalequipment manufacturers (OEMs),
resellers.
Government bodies.
Institutions - largely non-profit making
organisations, e.g. universities,
churches, etc.
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Characteristics of B2B markets
Nature of demand - derived,
joint, inelastic.
Structure of demand -
industrial and geographic
concentration. Buying process complexity.
Buyer-seller relationships.
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12
Follower Interact
Isolate Shaper
CustomerFocus
Low Technology Focus High
High
Low
Strategic Focus Grid
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Market Orientation
Acquire intelligence from theexternal environment.
Disseminate that intelligencethroughout the organization.
Respond to the intelligence:
take action.(Kohli and Jaworski 1990, Journal of
Marketing)
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Marketing Mission Statement
State in terms of meetingcustomer needs, not in terms of
products or technologies.
Marketing Myopia (Levitt 1960HBR)
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Marketing Activities
Identify customer needs Research customer behavior
Divide market into manageablesegments
Develop new products/services Establish/negotiate prices
Deliver, install, service products
Ensure adequate and timely supply ofproducts at correct place
Allocate resources across productlines
Communicate with customers
Evaluate/control marketing programs15
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Marketing Mix
Limited number of variables under
Marketings control to create position that is attractive tothe target market segment.
Four Ps Product
Price
Promotion
Place (Distribution)
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External Environment
Characterized by:
Degree of Stability
Complexity
Diversity
Hostility
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External Environment
Six Environments
Technological
Economic Social/Cultural (Customer)
Political/Legal
Natural/Climatic Competitive
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So whats different
about B2B? Marketing Concept
Marketing Mix
Market Segmentation Product Life Cycle
All apply in both B2C and B2B.
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So whats different about B2B?
The technical characteristics of
the product are important.
These products directly affect theoperations and economic health of
the customer.
The customer is an organizationrather than an individual
consumer, or family.
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Five Major Differences
Between B2B and B2C
Products/Services beingmarketed
Nature of demand
How the customer buys
Communication process Economic/Financial factors
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/
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Products/Services
More complex
Functional vs. Symbolic Attributes
Large unit dollar value/Largequantities
Custom/Tailored Various Stages from raw material tofinished goods.
Foundation, Entering, FacilitatingGoods
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Raw Material Extraction
Material Processing
Manufacturing
Parts/Subassembly
Assembly
Distribution
Wholesale/Retail Trade
Final Consumers
Facilitators
Firms in Production Chain
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Nature of Demand
Derived needed to produceother goods and services.
Precision steel tubes for
various products to be used in
automobiles.
Joint/Shared pump set needsengine /motor
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Influences on a B2B purchasing chain
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Sourcing strategies - advantages
and disadvantages (1 of 2)
Source
: Adapted from Treleven (1987).
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Sourcing strategies - advantages
and disadvantages (2 of 2)
Source: Adapted from Hahn (1986) and Ramsey and Wilson (1990). Reprinted by permission of MCB University Press Ltd.
M d l f i i l
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Models of organisationalbuying decision making
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BUSINESS
BUYERS
COMMERCIALENTERPRISE
GOVERNMENT
INSTITUTIONAL
COOPERATIVESOCIETIES
DEALERS /DISTRIBUTORS
OEMs;
End user
Publicsector
projects
Public
private
Manufacturigunits
Non
manufacturing units
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What do they buy?
Materials and parts RM,Manufactured materials, components
gets into the product directly.
Capital goods: plant and building,infrastructural needs, machinery
needed to produce other products and
services.
Supplies and services: consumables,delivery services, installation and
commissioning, servicing and repairs,
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Decision problems in B2B purchasing
decision making process (1 of 2)
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Decision problems in B2B purchasing
decision making process (2 of 2)
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Roles in the buying process
Purchasing - handle relationships withsuppliers.
Production/operations - meeting targets for theend product in both quantity and quality terms.
Engineering - the specification and design.
R&D.
Finance - devolve budgets to appropriatemanagers.
Marketing - outputs of the production process.
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Unit production model of
buyer-seller contact in B2B markets
Source: Adapted from Johanson (1982), copyright 1982 John Wiley & Sons Limited. Reporoduced with permission.
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Mass production model of
buyer-seller contact in B2B markets
Source: Adapted from Johanson (1982), copyright 1982 John Wiley & Sons Limited. Reproduced with permission.
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Buying centres - comparison between
consumer and B2B markets (1 of 2)
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Buying centres - comparison between
consumer and B2B markets (2 of 2)
INDUSTRIALBUYER BEHVIORM ODE
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38
INDUSTRIAL BUYER BEHVIOR M ODE
INFO. SOURCE
Act
- Sales person
- Exhibitions & trade shows
- Trade journals- W OM
- DIRECTM AIL
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7 Rs of MARKETING MIX.
RESEARCH WHAT DO THEY WANT? RATE SPEED MIND TO MARKET CYCLE.
RESOURCES 4 Ms.- THROUGH THE SCM.
RETAILING SHELF SPACE VS MIND SPACE.
RELIABILITY SOLUTION PERFORMANCE SCM AFTER SALES SERVICES
REWARD LOYALTY ENHANCING BRANDLOYALTY.
RELATIONSHIP- WITHIN SCM CRM - MENTALRECALL RATE.
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How Customer Buys
Group Process
Formal
Lengthy
Loyal
Decisions based on risk andopportunity
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Communication
Personal selling more importantthan mass paid advertising
Support sales with other
promotional acadvertising in trade journals,catalogs, trade shows, directmail, WWW.
Message focused on technical,factual, and descriptive content.
Multiple audience members.
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Economic/Financial Factors
Competition oligopolistic
Power/Dependency relationships
Reciprocity: Doing businesswith companies that do businesswith them.
Economic variables: interestrates, inflation, business
cycle
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Marketing Environment Audit
Macro environment A. Demographic :What major demographicdevelopments and trends pose opportunities orthreats to this company?
What actions has the company taken in response tothese developments and trends?
B. Economic What major developments in income,
prices, savings, and credit will affect thecompany? What actions has the company been takingin response to these developments and trends?
C. Environmental: What is the outlook for thecost and availability of natural resources andenergy needed by the company?
What concerns have been expressed about thecompany's role in pollution and conservation, Andwhat steps has the company taken?
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D. Technological What major changes areoccurring in product and process technology? Whatis the company's position in thesetechnologies? What major generic substitutesmight replace this product?
E. Political What changes in laws and
regulations might affect marketing strategy andtactics? What is happening in the areas ofpollution control, equal employment opportunity, product safety, advertising, price control, andso forth, that affects marketing strategy?
F. Cultural What is the public's attitude
toward business and toward the company'sproducts? What changes in customer lifestyles andvalues might affect the company?
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Task Environment A. Markets What is happening to market size,growth, geographical distribution, and profits?
What are the major market segments? B. Customers What are the customers' needs andbuying processes? How do customers and
prospects rate the company and icompetitors on reputation, product quality,
service, sales force, and price? How dodifferent customer segments make their buyingdecisions?
C. Competitors Who are the major competitors? What are their objectives,strategies, strengths, weaknesses, sizes, and
market shares? What trends will affectfuture competition and substitutes for thecompany's products?
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D. Distribution and Dealers What are the maintrade channels for bringing products to customers?
What are the efficiency levels and growthpotentials of the different trade channels?
E. Suppliers What is the outlook for theavailability of key resources used in production?What trends are occurring among suppliers?
F. Facilitators and Marketing Firms What is
the cost and availability outlook fortransportation services, warehousing facilities,and financial resources? How effective are thecompany's advertising agencies and marketingresearch firms?
G. Publics Which publics represent particular
opportunities or problems for the company? Whatsteps has the
company taken to deal effectively witheach public?
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Marketing audit : Measurement of performance
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Marketing audit : Measurement of performance
A. Business Mission
Is the business mission clearly statedin market-oriented terms? Is itfeasible?
B. Marketing Objectives and Goals
Are the corporate and marketingobjectives stated in the form of cleargoals to guide marketing planning and
performance measurement?
Are the marketing objectives
appropriate, given the company'scompetitive position, resources, andopportunities?
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C. Strategy Is management able to articulate a clear marketing
strategy for achieving its marketing objectives? Isthe strategy convincing? Is the strategyappropriate to the stage of the product life cycle,competitors' strategies, and the state of theeconomy?
Is the company using the best basis for marketsegmentation? Does it have sound criteria for
rating the segments and choosing the best ones? Hasit developed accurate profiles of each targetsegment?
Has the company developed a sound positioning andmarketing mix for each target segment? Aremarketing resources allocated optimally to the
major elements of the marketing mix -- i.e.,product quality, service, sales force, advertising,promotion, and distribution?
Are enough resources or too many resources budgetedto accomplish the marketing objectives?
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Marketing-Organization Audit A. Formal Structure Does the marketing officer have adequate authority
over, and responsibility for, Structure companyactivities that affect the customer's satisfaction? Are the marketing activities optimally structured
along functional, product, end- user, and territoriallines?
B. Functional Efficiency Are there good communication and working relations
between marketing and Efficiency sales? Is the product management system working effectively?
Are product managers able to plan profits or onlysales volume?
Are there any groups in marketing that need moretraining, motivation, supervision, or evaluation?
C. Interface Efficiency Are there any problems between marketing and
manufacturing, R&D, purchasing, Efficiency finance,accounting, and legal that need attention.
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Marketing-Systems Audit A. Marketing Information System Is the marketing intelligence system producing accurate, sufficient, and
timely information about marketplace developments with respect tocustomers, prospects, distributors and dealers, competitors, suppliers,and various publics?
Are company decision makers asking for enough marketing research, andare they using the results?
Is the company employing the best methods for market and salesforecasting?
B. Marketing Planning System Is the marketing planning system well conceived and effective? Is sales forecasting and market potential measurement soundly carried
out? Are sales quotas set on a proper basis? C. Marketing Control System Are the control procedures adequate to ensure that the annual-plan
objectives are being achieved?
Does management periodically analyze the profitability of products,markets, territories, and channels of distribution?
Are marketing costs periodically examined? D. New-Product Development System Is the company well organized to gather, generate, and screen new-
product ideas?
Does the company do adequate concept research and business analysisbefore investing in new ideas?
Does the company carry out adequate product and market testing beforelaunching new products?
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Marketing-Productivity Audit
A. Profitability Analysis
What is the profitability of the company'sdifferent products, markets, territoriesand channels of distribution?
Should the company enter, expand,
contract, or withdraw from any businesssegments and what would be the short- andlong-run profit consequences?
B. Cost Effectiveness Analysis
Do any marketing activities seem to haveexcessive costs? Can cost-reducing stepsbe taken?
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Marketing-Function Audits
A. Products
What are the product-line objectives? Arethese objectives sound? Is the currentproduct line meeting the objectives?
Should the product line be stretched orcontracted upward, downward, or both ways?
Which products should be phased out? Whichproducts should be added?
What is the buyers' knowledge and attitudestoward the company's and competitors'product quality, features, styling, brand
names, etc.? What areas of product strategyneed improvement?
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Price
What are the pricing objectives, policies,
strategies, and procedures? To what extent areprices set on cost, demand, and competitivecriteria?
Do the customers see the company's prices asbeing in line with the value of its offer?
What does management know about the price
elasticity of demand experience curve effects,and competitors' prices and pricing policies?
To what extent are price policies compatiblewith the needs of distributors and dealers,suppliers, and government regulation?
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Distribution
What are the distribution objectives andstrategies?
Is there adequate market coverage and
service? How effective are the following channelmembers distributors, dealers, manufacturersrepresentatives, brokers, agents, etc.?
Should the company consider changing itsdistribution channels?
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Advertising, Sales Promotion, and Publicity
What are the organization's advertisingobjectives? Are they sound?
Is the right amount being spent on advertising?How is the budget determined?
Are the ad themes and copy effective? What docustomers and the public think and Publicityabout the advertising?
Are the advertising media well chosen? Is the internal advertising staff adequate?
Is the sales-promotion budget adequate? Isthere effective and sufficient use of sales-promotion tools such as samples, coupons,
displays, sales contests? Is the publicity budget adequate? Is the publicrelations staff competent and creative?
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Sales-force
What are the organization's salesforce objectives?
Is the salesforce large enough to accomplish thecompany's objectives?
Is the salesforce organized along the properprinciples of specialization (territory, market,product)? Are there enough (or too many) salesmanagers to guide the field sales representatives?
Does the sales-compensation level and structureprovide adequate incentive and reward?
Does the salesforce show high morale, ability, andeffort?
Are the procedures adequate for setting quotas andevaluating performances?
How does the company's salesforce compare tocompetitors salesforce?
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Different Problems: The How through ActionPlans
Huge Problem:
Performance objectives arent broken down tothe action plans required to execute.
What happens: Were out of alignment. We dont have the available resources
We dont have the funding
Timelines of different departments collide
Our stakeholders arent on board or coordinated
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The Biggest Obstacle: Alignment
What to Check out for Alignment
Do employees throughout the organization know themission?
Are the processes clearly enough articulated?
Is everyone walking and talking in alignment?
Do we have clearly defined values and does everybody
really demonstrate them? What is the gap between what we (the Leadership Team)want and what we want them (the organization) to do?(World-class companies keep raising the bar andcreating a gap.)
What are you doing now and what could you do if you
got it right - if every individual were nailing it?
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More to check out for Alignment Why cant you execute? Because youre not aligned.
Is the strategy/business planning internallycredible?
Is it credible lower down to people charged with
execution? What are the dislocations? (People, timing,resources, technology, funding)
Is there is alignment in communication and in themessages going up and down?
Is there is execution alignment - a gap betweenwhat were trying to achieve ad what were actuallyachieving (both relative to plan and in terms ofpotential)?
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So whats different in this Approach toMeasuring
Clarity of Measures
Alignment with the mission, the plan,the stakeholders, available resources
Drilling down from objectives to criteriaand action plans are the plans inalignment with the objectives, the
resources, the time lines, customer andstakeholder needs
Continuous Learning
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Continuous Learning
Why is Continuous Learning Important?
Peter Senges definition The Learning Organization Question for all of you: Do you have a learning
organization? Are you willing to invest in people? Is it worth it? If you dont, how can you encourage your people to
learn? Concept of CANI : Continuous and Never-ending
Improvement Need to continually upgrade the quality of: Our people Systems Processes Procedures Resources. And if we dont, somebody else will do it and take
away our business.
People: Personal and Professional
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Development
8
Inputs Outputs
Inputs, Outputs &
Performance Management
Tasks
Behaviors,
Competencies,
Technical Skills
Deliverables,
Performance
Objectives
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Strategic PlanningModel
What is Strategic
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What is StrategicPlanning?
Process to establish priorities on what you willProcess to establish priorities on what you willaccomplish in the futureaccomplish in the future
Forces you to make choices on what you will doForces you to make choices on what you will do
and what you will not doand what you will not do Pulls the entire organization together around aPulls the entire organization together around a
single game plan for executionsingle game plan for execution Broad outline on where resources will get allocatedBroad outline on where resources will get allocated
Why do Strategic
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Why do StrategicPlanning?
If you fail to plan, then you plan to fail beIf you fail to plan, then you plan to fail beproactive about the futureproactive about the future
Strategic planning improves performanceStrategic planning improves performance
Counter excessive inward and short-term thinkingCounter excessive inward and short-term thinking Solve major issues at a macro levelSolve major issues at a macro level Communicate to everyone what is most importantCommunicate to everyone what is most important
Fundamental Questions
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Fundamental Questionsto Ask
Where are we now? (Assessment)Where are we now? (Assessment) Where do we need to be? (Gap / Future EndWhere do we need to be? (Gap / Future End
State)State)
How will we close the gap (Strategic Plan)How will we close the gap (Strategic Plan) How will we monitor our progressHow will we monitor our progress
A Good Strategic Plan
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A Good Strategic Planshould . . .
Address critical performance issuesAddress critical performance issues Create the right balance between what theCreate the right balance between what the
organization is capable of doing vs. what theorganization is capable of doing vs. what the
organization would like to doorganization would like to do Cover a sufficient time period to close theCover a sufficient time period to close the
performance gapperformance gap Visionary convey a desired future end stateVisionary convey a desired future end state Flexible allow and accommodate changeFlexible allow and accommodate change
Guide decision making at lower levels Guide decision making at lower levels operational, tactical, individualoperational, tactical, individual
Strategic Planning Model
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g gA B C D E
EnvironmentalScan
Assessment
BackgroundInformation
SituationalAnalysis
SWOT Strengths,Weaknesses,Opportunities,Threats
Situation Past,Present andFuture
SignificantIssues
Align / Fit withCapabilities
Mission &Vision
Values /GuidingPrinciples
Major Goals
SpecificObjectives
PerformanceMeasurement
Targets /Standards ofPerformance
Initiatives andProjects
Baseline Components
PerformanceManagement
Review Progress BalancedScorecard
Take CorrectiveActions
Down toSpecifics
Evaluate
Where we are Where we want to be How we will do it How are we doing
Gaps Action Plans Feedbackupstream revise plans
Pre-Requisites to
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Pre-Requisites toPlanning
Senior leadership commitmentSenior leadership commitment
Who will do what?Who will do what?
What will each group do?What will each group do?
How will we do it?How will we do it? When is the best time?When is the best time?
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Assessment
Assessment Model: Assessme
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Assessment Model:S W O T
Assessment
External Assessment:Marketplace, competitors,social trends, technology,regulatory environment,economic cycles .
External Assessment:
Marketplace, competitors,social trends, technology,regulatory environment,economic cycles .
Internal Assessment:Organizational assets,resources, people, culture,systems, partnerships,suppliers, . . .
Internal Assessment:Organizational assets,resources, people, culture,systems, partnerships,suppliers, . . .
Easy to Understand Apply at any organizational level
Needs to be Analytical andSpecific
Be honest about yourweaknesses
Good Points Possible Pitfalls
SWOT SWOT
Assessme
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StrengthsAssessme
nt
Strengths Those things that you do well, theStrengths Those things that you do well, thehigh value or performance pointshigh value or performance points
Strengths can be tangible: Loyal customers,Strengths can be tangible: Loyal customers,
efficient distribution channels, very high qualityefficient distribution channels, very high quality
products, excellent financial conditionproducts, excellent financial condition Strengths can be intangible: Good leadership,Strengths can be intangible: Good leadership,
strategic insights, customer intelligence, solidstrategic insights, customer intelligence, solid
reputation, high skilled workforcereputation, high skilled workforce
Often considered Core Competencies BestOften considered Core Competencies Bestleverage points for growth without draining yourleverage points for growth without draining your
resourcesresources
Assessme
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WeaknessesAssessme
nt
Weaknesses Those things that prevent you fromWeaknesses Those things that prevent you fromdoing what you really need to dodoing what you really need to do
Since weaknesses are internal, they are withinSince weaknesses are internal, they are within
your controlyour control
Weaknesses include: Bad leadership, unskilledWeaknesses include: Bad leadership, unskilled
workforce, insufficient resources, poor productworkforce, insufficient resources, poor product
quality, slow distribution and delivery channels,quality, slow distribution and delivery channels,
outdated technologies, lack of planning, . . .outdated technologies, lack of planning, . . .
Assessme
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OpportunitiesAssessme
nt
Opportunities Potential areas for growth andOpportunities Potential areas for growth andhigher performancehigher performance
External in nature marketplace, unhappyExternal in nature marketplace, unhappy
customers with competitors, better economiccustomers with competitors, better economic
conditions, more open trading policies, . .conditions, more open trading policies, . . Internal opportunities should be classified asInternal opportunities should be classified as
StrengthsStrengths Timing may be important for capitalizing onTiming may be important for capitalizing on
opportunitiesopportunities
Assessme
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ThreatsAssessme
nt
Threats Challenges confronting the organization,Threats Challenges confronting the organization,external in natureexternal in nature
Threats can take a wide range bad pressThreats can take a wide range bad press
coverage, shifts in consumer behavior, substitutecoverage, shifts in consumer behavior, substitute
products, new regulations, . . .products, new regulations, . . . May be useful to classify or assign probabilities toMay be useful to classify or assign probabilities to
threatsthreats The more accurate you are in identifying threats,The more accurate you are in identifying threats,
the better position you are for dealing with thethe better position you are for dealing with thesudden ripples of changesudden ripples of change
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Baseline
h b li
Baseline
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Why create a baseline?Baseline
Puts everything about the organization into aPuts everything about the organization into asingle context for comparability and planningsingle context for comparability and planning
Descriptive about the company as well as theDescriptive about the company as well as the
overall environmentoverall environment Include information about relationships Include information about relationships
customers, suppliers, partners, . . .customers, suppliers, partners, . . . Preferred format is the Organizational ProfilePreferred format is the Organizational Profile
Organizational Profile
Baseline
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Organizational Profile1. Operating Environment
Baseline
Products and Services Suppliers, DeliveryProducts and Services Suppliers, DeliveryChannels, Contracts, Arrangements, . . .Channels, Contracts, Arrangements, . . .
Organizational Culture Barriers, Leadership,Organizational Culture Barriers, Leadership,
Communication, Cohesiveness . . . .Communication, Cohesiveness . . . . Workforce Productivity Skill levels, diversity,Workforce Productivity Skill levels, diversity,
contractors, aging workforce, . . .contractors, aging workforce, . . . Infrastructure Systems, technology, facilities, . .Infrastructure Systems, technology, facilities, . .
Regulatory Product / Service Regulation, ISORegulatory Product / Service Regulation, ISOQuality Standards, Safety, Environmental, . . .Quality Standards, Safety, Environmental, . . .
Organizational Profile
Baseline
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Organizational Profile2. Business Relationships
Baseline
Organizational Structure Business Units,Organizational Structure Business Units,Functions, Board, Management Layers, . . .Functions, Board, Management Layers, . . .
Customer Relationships Requirements,Customer Relationships Requirements,
Satisfaction, Loyalty, Expectations, . . .Satisfaction, Loyalty, Expectations, . . . Value Chain Relationship between everyone inValue Chain Relationship between everyone in
the value chain . . . .the value chain . . . . Partner Relationships Alliances, long-termPartner Relationships Alliances, long-term
suppliers, customer partnerships, . . .suppliers, customer partnerships, . . .
Organizational Profile3 f
Baseline
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3. Key Performance
Categories
Baseline
CustomerCustomer
Products and ServicesProducts and Services FinancialFinancial
Human CapitalHuman Capital OperationalOperational
External (Regulatory Compliance, SocialExternal (Regulatory Compliance, Social
Responsibility, . . . )Responsibility, . . . )
G A l iBaseline
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Gap AnalysisBaseline
Baseline / OrgProfile
Challenges /SWOT
Gap = Basis forLong-Term
Strategic Plan
Gap = Basis forLong-Term
Strategic Plan
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Components
Major Components of theSt t i Pl / D t
Compone
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Strategic Plan / Down toAction
p
nts
Mission
Vision
Goals
Objectives
Measures
Why we existWhy we exist
What we want to beWhat we want to be
Indicators andIndicators and
Monitors of successMonitors of success
Desired level ofDesired level of
performance and timelinesperformance and timelines
Planned Actions toPlanned Actions to
Achieve ObjectivesAchieve Objectives
O1 O2
AI1 AI2 AI3
M1 M2 M3
T1 T1 T1
Specific outcomes expressed inSpecific outcomes expressed in
measurable terms (NOT activities)measurable terms (NOT activities)
Strategic Plan
Action Plans
Evaluate Progress
Targets
Initiatives
What we must achieve to be successfulWhat we must achieve to be successful
Mi i St t tCompone
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Mission Statementp
nts
Captures the essence of why the organizationCaptures the essence of why the organizationexists Who we are, what we doexists Who we are, what we do
Explains the basic needs that you fulfillExplains the basic needs that you fulfill Expresses the core values of the organizationExpresses the core values of the organization Should be brief and to the pointShould be brief and to the point Easy to understandEasy to understand If possible, try to convey the unique nature of yourIf possible, try to convey the unique nature of your
organization and the role it plays that differentiatesorganization and the role it plays that differentiates
it from othersit from others
Examples Good and Bad
Compone
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Examples Good and BadMission Statements
p
nts
To Make People Happy
To Explore the Universe and Searchfor Life and to Inspire the NextGeneration of Explorers
NASA
Walt Disney
Does a good job ofexpressing the core values of
the organization. Alsoconveys unique qualitiesabout the organization.
Too vague and and unclear.Need more descriptiveinformation about whatmakes the organizationspecial.
Vi iCompone
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Visionp
nts
How the organization wants to be perceivedHow the organization wants to be perceived
in thein the
future what success looks likefuture what success looks like
An expression of the desired end stateAn expression of the desired end state Challenges everyone to reach for somethingChallenges everyone to reach for something
significant inspires a compelling futuresignificant inspires a compelling future
Provides a long-term focus for the entireProvides a long-term focus for the entireorganizationorganization
E l f Vi i D i t
Compone
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Examples of Vision Descriptors Adept
Aggressive Agile
Aligned
Assertive
Available
Best-in-class
Challenging
Clear
Competent
Complex Compliant
Conservative
Coordinated
Critical
Direct
Equal
Disciplined
Effective
Efficient
Enduring
Expanding
Expert
Fast
Fast-paced
Financially-sound
Focused
Growth
Healthy
Improving
Incentivized
Solid
Solvent
Stable
State of the
Art
Strong
Streamlined
Sufficient
Strategic
Sustainable
Timely
Value-added
Vigilant
Visionary
World-class
Informative
Innovative
Leading
Logical
Major
Nimble
Pioneering
Protected
Organized
Over-Arching
Quick
Ready
Responsive
Savvy
Simple
nts
Guiding Principles and
Compone
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g pValues
nts
Every organization should be guided by a set ofEvery organization should be guided by a set ofvalues and beliefsvalues and beliefs Provides an underlying framework for makingProvides an underlying framework for making
decisions part of the organizations culturedecisions part of the organizations culture Values are often rooted in ethical themes, such asValues are often rooted in ethical themes, such as
honesty, trust, integrity, respect, fairness, . . . .honesty, trust, integrity, respect, fairness, . . . . Values should be applicable across the entireValues should be applicable across the entire
organizationorganization Values may be appropriate for certain bestValues may be appropriate for certain best
management practices best in terms of quality,management practices best in terms of quality,exceptional customer service, etc.exceptional customer service, etc.
Examples ofG idi P i i l d
Compone
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Guiding Principles andValues
nts
We obey the law and do not compromise moral or ethical principles ever!
We expect to be measured by what we do, as well as what we say.
We obey the law and do not compromise moral or ethical principles ever!We expect to be measured by what we do, as well as what we say.
We treat everyone with respect and appreciate individual differences.
We carefully consider the impact of business decisions on our people and we
recognize exceptional contributions.
We treat everyone with respect and appreciate individual differences.
We carefully consider the impact of business decisions on our people and we
recognize exceptional contributions.
We are strategically entrepreneurial in the pursuit of excellence, encouraging original thought
and its application, and willing to take risks based on sound business judgment.
We are strategically entrepreneurial in the pursuit of excellence, encouraging original thought
and its application, and willing to take risks based on sound business judgment.
We are committed to forging public and private partnerships that combine diverse strengths,
skills and resources.
We are committed to forging public and private partnerships that combine diverse strengths,
skills and resources.
GoalsCompone
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Goals nts
Describes a future end-state desired outcomeDescribes a future end-state desired outcomethat is supportive of the mission and vision.that is supportive of the mission and vision. Shapes the way ahead in actionable terms.Shapes the way ahead in actionable terms. Best applied where there are clear choices aboutBest applied where there are clear choices about
the future.the future.
Puts strategic focus into the organization specificPuts strategic focus into the organization specific
ownership of the goal should be assigned toownership of the goal should be assigned to
someone within the organization.someone within the organization. May not work well where things are changing fastMay not work well where things are changing fast
goals tend to be long-term for environments thatgoals tend to be long-term for environments thathave limited choices about the future.have limited choices about the future.
Developing GoalsCompone
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Developing Goals nts
Cascade from the top of the Strategic Plan Cascade from the top of the Strategic Plan Mission, Vision, Guiding Principles.Mission, Vision, Guiding Principles. Look at your strategic analysis SWOT,Look at your strategic analysis SWOT,
Environmental Scan, Past Performance, Gaps . .Environmental Scan, Past Performance, Gaps . . Limit to a critical few such as five to eight goals.Limit to a critical few such as five to eight goals.
Broad participation in the development of goals:Broad participation in the development of goals:
Consensus from above buy-in at the executionConsensus from above buy-in at the execution
level.level. Should drive higher levels of performance andShould drive higher levels of performance and
close a critical performance gap.close a critical performance gap.
Examples of GoalsCompone
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Examples of Goals nts
Reorganize the entire organization for better responsiveness to customersReorganize the entire organization for better responsiveness to customers
We will partner with other businesses, industry leaders, and government agencies in order to
better meet the needs of stakeholders across the entire value stream.
We will partner with other businesses, industry leaders, and government agencies in order to
better meet the needs of stakeholders across the entire value stream.
Manage our resources with fiscal responsibility and efficiency through a single comprehensiveprocess that is aligned to our strategic plan.
Manage our resources with fiscal responsibility and efficiency through a single comprehensive
process that is aligned to our strategic plan.
Improve the quality and accuracy of service support information provided to our internal
customers.
Improve the quality and accuracy of service support information provided to our internal
customers.
Establish a means by which our decision making process is market and customer focus.Establish a means by which our decision making process is market and customer focus.
Maintain and enhance the physical conditions of our public facilities.Maintain and enhance the physical conditions of our public facilities.
ObjectivesCompone
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Objectives Relevant - directly supports the goalRelevant - directly supports the goal
Compels the organization into actionCompels the organization into action
Specific enough so we can quantify andSpecific enough so we can quantify andmeasure the resultsmeasure the results
Simple and easy to understandSimple and easy to understand
Realistic and attainableRealistic and attainable Conveys responsibility and ownershipConveys responsibility and ownership
Acceptable to those who must executeAcceptable to those who must execute
May need several objectives to meet a goalMay need several objectives to meet a goal
nts
Goals vs Objectives
Compone
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Goals vs. Objectives
GOALS OBJECTIVES
Very short statement, few
words
Longer statement, more
descriptiveBroad in scope Narrow in scope
Directly relates to theMission Statement
Indirectly relates to the MissionStatement
Covers long time period(such as 10 years)
Covers short time period (such 1year budget cycle)
nts
Examples of Objectives
Compone
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Examples of Objectives
Develop a customer intelligence database system to capture and analyze patterns in purchasingbehavior across our product line.
Develop a customer intelligence database system to capture and analyze patterns in purchasingbehavior across our product line.
Launch at least three value stream pilot projects to kick-off our transformation to a leaner
organization.
Launch at least three value stream pilot projects to kick-off our transformation to a leaner
organization.
Centralize the procurement process for improvements in enterprise-wide purchasing power.Centralize the procurement process for improvements in enterprise-wide purchasing power.
Consolidate payable processing through a P-Card System over the next two years.Consolidate payable processing through a P-Card System over the next two years.
Monitor and address employee morale issues through an annual employee satisfaction survey
across all business functions.
Monitor and address employee morale issues through an annual employee satisfaction survey
across all business functions.
nts
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Down toSpecifics
What are Action Plans? Down toSpecifics
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Objectives
Initiatives
Action Plans
The Action Plan identifies the specific steps that will be taken to achieve the initiatives and strategic objectives where the rubber meets the road
Each Initiative has a supporting Action Plan(s) attached to it
Action Plans are geared toward operations, procedures, and processes
They describe who does what, when it will be completed, and how the organization knows when steps are completed
Like Initiatives, Action Plans require the monitoring of progress on Objectives, for which measures are needed
Specifics
Characteristics of Down toSpecifics
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Action Plans Assign responsibility for the successful completion of the Action Plan. Who
is responsible? What are the roles and responsibilities? Detail all required steps to achieve the Initiative that the Action Plan is
supporting. Where will the actions be taken?
Establish a time frame for the completion each steps. When will we need totake these actions?
Establish the resources required to complete the steps. How much will ittake to execute these actions?
Define the specific actions (steps) that must be taken to implement the
initiative. Determine the deliverables (in measurable terms) that shouldresult from completion of individual steps. Identify in-process measures toensure the processes used to carry out the action are working as intended.Define the expected results and milestones of the action plan.
Provide a brief status report on each stepbrief status report on each step, whether completed or not. Whatcommunication process will we follow? How well are we doing in executing ouraction plan?
Based on the above criteria, you should be able to clearly define youraction plan. If you have several action plans, you may have to prioritize.
Specifics
Action Plan Execution
Down toSpecifics
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Action Plan ExecutionSpecifics
Requires that you have answered the Who, What, How,Where, and When questions related to the project or initiativethat drives strategic execution
Coordinate with lower level sections, administrative andoperating personnel since they will execute the Action Plan inthe form of specific work plans
Assignaction responsibility and set timelines Developworking plans and schedules that have specific action steps
Resource the project or initiative and document in the form ofdetail budgets (may require reallocation prior to execution)
Monitorprogress against milestones and measurements Correct and revise action plans per comparison of actualresults against original action plan
Quantify from Action LevelUp
Down toSpecifics
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Upin terms of Measurements
Spec cs
Measure your milestones short-term outcomes atMeasure your milestones short-term outcomes atthe Action Item level.the Action Item level.
Measure the outcomes of your objectives.Measure the outcomes of your objectives.
Try to keep your measures one per objective.Try to keep your measures one per objective. May want to include lead and lag measures toMay want to include lead and lag measures to
depict cause-effect relationships if you aredepict cause-effect relationships if you are
uncertain about driving (leading) the desireduncertain about driving (leading) the desired
outcome.outcome.
Establish measures using a template to captureEstablish measures using a template to capture
critical data elementscritical data elements
Measurement Template
Down toSpecifics
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Measurement Templatep
(Insertorganizationname)
(Insert divisionname)
(Insert departmentname)
Risk Frame areaobjective supports
(Insert objectiveowner)
(Insertmeasurementowner)
(Insert reportingcontact info)
Objective Description description of objective purpose, in sufficient detail for personnel notfamiliar with the objective to understand its intent. Objective descriptions are typically two orthree paragraphs long. This will appear in the pop-up window when you mouse over theobjective in the Balanced Scorecard System.
References sourcedocumentation for objective andobjective description
Comments additional information about the objective not covered in above blocks, such as recommendations for further
revision, additional organizations objective impacts, recommendations for coordination / alignment with other objectives, etc.
Measure Name - The nameexactly as you want it toappear in the BalancedScorecard, including themeasure number (i.e. PercentEmployees Satisfied, etc.)
Measure Description description of the measure,include its intent, data source, and organizationresponsible for providing measure data. This willappear in the pop-up window when you mouse overthe measure in the Balanced Scorecard.
Measure Formula formula used tocalculate measurevalue (if any)
Data Source - Thesource of the data manual, dataspreadsheet, ordatabase name andcontact familiar withthe data
Measure Weight - the relative weight of the measure based on the impact it has onthe overall objective. The total weights for all measures for an objective must add to100
Measure Reporter Person responsiblefor providing measure data. Include thename, organization and email.
Target Maximum Maximum expected value for the measure. Effective Date Date the target firstbecomes effective
Frequency How oftentarget data will be reported
Units Unitsof measure
Target Point where the measure goes from green to amber
Criteria for Good Down toSpecifics
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Integrity Complete; useful; inclusive ofseveral types of measure; designed tomeasure the most important activities ofthe organization
Reliable: Consistent
Accurate - Correct
Timely Available when needed: designed touse and report data in a usable timeframe
Confidential and Secure: Free from
inappropriate release or attack
Measuresp
Examples of MeasurementsLead Indicators
Down toSpecifics
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Lead Indicators
Average time to initiate customercontact => shorter time should lead tobetter customer service
Average response time to incident =>
below average response times shouldlead to increased effectiveness indealing with incident
Facilities that meet facility qualityA1 rating => should lead to improvedoperational readiness for meetingcustomer needs
p
Examples of Measurements
Down toSpecifics
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Lag Indicators
Overall customer satisfaction rating =>how well you are doing looking back
Business Units met budgeted servicehour targets => after the factreporting of service delivery volume
Number of category C safety accidentsat construction sites => historicalreport of what has already taken place
p
TargetsDown toSpecifics
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Targets For each measurement, you should have atleast one target
Targets should stretch the organization tohigher levels of performance
Incremental improvements over current
performance can be used to establish yourtargets
Targets put focus on your strategy
When you reach your targets, you have
successfully executed your strategy
Examples of Targets
Down toSpecifics
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Average Time to Process New
Employee Setups in DB
65 days Year
2007
60 days Year
2008
55 days Year
2009
Utilization Rate for RentalHousing Units
90% for
Year 2007
92% for Year2008
95% for Year2009
Toxic Sites meeting in-servicecompliance
55% for Year2007
70% for Year2008
95% for Year2009
Personnel Fully Trained inSafety and Emergency
65% by 2rd Quarter
75% by 3thQuarter
90% by 4thQuarter
Open Positions Filled after 30day promotion period
75 positionsSept 2007
100 positionsJan 2008
135 positionsJuly 2008
% Reduction in Orders FilledShort in 1st Cycle
50% by Year2008
65% by Year2009
85% by Year2010
Sanity CheckDown toSpecifics
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Sanity Check . . .
Make sure everything is linked andconnected for a tight end-to-end modelfor driving strategic execution.
INITIATIVE
Employee
Productivity
Improvement
Program
Employee
SatisfactionSurvey Rating
90% favorable
overall
Measure
Target
Target Actual
90%
45%
PercentSatisfaction
gap
MEASURE / TARGET
OBJECTIVE
Improve Employee
Satisfaction
ACTION PLAN
Identify issues per a
company wide survey
International Marketing
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International Marketing
Trade policy Culture
Consumer buying
power Productstrategies
Obstacles to Trade:
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Protectionism
Differing interests ofconsumers and manufacturers
Benefits of trade tend to be
more diffused than benefits tospecific groups ofprotectionism
Approaches to
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Protectionism Tariffs Quotas
Voluntary exportrestrictions
Subsidies todomesticproducers/exporters
Non-tariff barriers
legal obstacles differential
treatment
Cultural Lessons
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Cultural Lessons
Diet Coke is named Light Coke inJapan--dieting was not well regarded
Red circle trademark was unpopularin Asia due to its resemblance of
Japanese flag Packaging of products is moreimportant in some countries than inU.S.
Advertisement featuring man and dogfailed in Africa--dogs were not seemas mans best friend
More Cultural
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Lessons...
Cologne ad featuring a man attackedby women failed in Africa
Food demonstration did well inChinese stores but not in Koreanones--older women were insulted bybeing taught by youngerrepresentatives
Pauses in negotiations Level of formality
Definitions
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Definitions
Culture: That complexwhole which includesknowledge, belief, art,morals, custom, and anyother capabilities and
habits acquired by man as amember of society.
Alternative definition: Meanings that areshared by most people in a group
[at least to some extent]. (Adapted from Peter and
Olson, 1994)
Hofstedes Cultural
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Dimensions Individualism (vs.collectivism)
Power distance
Masculine vs. feminine
Strong vs. weakuncertainty avoidance
Short vs. long termorientation
(Confucianist dynamics) The Foolish Old Man WhoMoved the Mountain
Based on interviews withIBM executives throughout
the World--1980s
Negotiation Content
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Negotiation Content
Non-task sounding Task-related exchange ofinformation
Persuasion
Concessions and agreements
Geography--Surprisinglyf l
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Impactful
U.S. and most Western Europeanareas are highly generallyaccessible
Compare to areas in thedeveloping World: China
Russia
Latin America (even Mexico), Africa
Communication vs. shipping
Climate and Topography:Th C f L ti A i
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The Case of Latin America
4,500 by 3,000 miles (at widest) 48% forests
West coast dominated by mountainranges
5% of land arable
Natural barriers inhibiting growth
Large proportion of residents in
cities; people in rural areas often donot associate themselves withcountries
Climate and Topography:Th C f L ti A i
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The Case of Latin America
4,500 by 3,000 miles (at widest) 48% forests
West coast dominated by mountainranges
5% of land arable
Natural barriers inhibiting growth
Large proportion of residents in
cities; people in rural areas often donot associate themselves withcountries
China: Geography
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China: Geography
Very rapidprogress onShanghaiinfrastructure
Rural villages aredifficult toaccess
Strong regional
differences evenwithin the country
Some Issues in Culture
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Some Issues in Culture
Time monochronic vs.
polychronic
meanings
Personal space preferred distance
territoriality
interactionwith/ignoring peoplein close proximity
Symbols colors
historicalassociations
Friendship andacquaintance
Agreements
Etiquette
Eastern vs. WesternC lt
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Culture
Differences in Values
Perceptions of Objects
Reality
Stability vs.change
Control
Perceived roles
pain mana
Perceived Control OverR lit
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Reality
World is not generally seen aspredictable
Trends are not expected to
continue Individual has little controlover the world
BUT Outcome is believed to be tied toeffort, not individual skill
More Tendencies
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More Tendencies
Westeners tend to ratethemselves
More unique than average and what
they are Above average in ability
Easteners tend to ratethemselves
Less unique than they really are
Below average
Proverbs
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Proverbs
Western: The early bird getsthe worm
Eastern:
The first bird in the flock getsshot
A nail that stands out will be
hammered down.
Values
Source: Richard E. Nisbett, The Geography of Thought: How Asians and
Westeners Think Differently and Why,New York, 2003, The Free Press
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Values
Issue Western Value Eastern ValueDistinctiveness ofpeople
Want to be distinctive Not valued; emphasis ontie to group
Perceived control Significant; values determinechoices
Modestsocietal valuesare already established
Emphasis Success and achievement;relationships may get in the way
Best outcome for relevantgroup (e.g., family, workgroup)
Self-esteem Strive to feel good; assuranceswanted
Tied to belonging withgroup
Relationships Equality or superior position Clearly defined;hierarchical
Rules Same rules apply to all Depend on context andrelationship
Some implications
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So e p ca o s
Thanking peoplefor things theyare clearly supposed to do?
Why the need for a choice
between 40 different brands ofcereal?
Socialization
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Western textbook: See Dickrun. See Dick play. See Dickrun and play.
Chinese: Big brother takescare of little brother. Bigbrother loves little brother.
Little brother loves bigbrother.
Perception of People
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p p
Western: People have characteristicsindependent of the situation Fundamental attribution error: Peopleattribute their own behavior to thecircumstances but that of others toinnate characteristics.
Eastern: Person is connected;behavior is the result of specificroles played at the time
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INTERNATIONAL BUSINESS WHY ?
Highly competitive business environment competition
from multi-nationals.
Business firms should increase their top lines and reduce
costs to retain their bottom lines.
One of the options, which some feel is a must, is to
internationalize the business operations.
Business firms should therefore develop proper strategies
to globalize operations.
INTERNATIONAL MARKETING WHY?
INTERNATIONAL MARKETING WHY?
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INTERNATIONAL MARKETING WHY?
Completion from MNCs in Domestic Market.
To increase Top line in order to keep steadybottom line with rising costs.
Maximize profits.
Global sourcing by multinationals has made exportof components and products more lucrative.
Reduction of duty and barriers by members of theWTO has made has made global markets moreattractive.
Convergence of tastes of customers globally hasresulted in development of global
products/services. The growth of buying power worldwide, includingdeveloping countries.
International Marketing: Marketingproducts/services across national borders by a
national or multinational company.
3 Stages of International Marketing:
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Depends on involvement of the firm -
Export Marketing
marketing across political boundaries
Multinational Marketing
marketing activities include other
operations in more than one country.
International Business
where organizations focus on globalcompetitive advantage and spread their value
creation activities globally.
Environment
Trade Barrier By many countries earlier to protect
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Trade Barrier By many countries earlier to protectdomestic Industry.
Tariff Barriers Barriers by imposition ofDuties (import duty) and taxes.
India once has duty of 300% on some imported itemsbut today reduced to 30 - 20%.
Non-Tariff Barriers Other than tariff such as:
Licensing Import Quota
Voluntary Export Restraints
Administrating protections.
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Some of the Administrative Barriers Safeguards against import surgesthreatening domestic industry.
Health Standards as NTB. Foreign Exchange Regulations notreleasing FE for import.
Trading Blocks Line
A S E A N European Union, etc. S A A R C
Market Selection:
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Decide Marketing Objective Define Parameters of Market Selection Preliminary Screening
Detailed study
and short
listing
Evaluation by
Metrix &
Selection
Normal Marketing Objectives:
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Profit More profitable inInternational Market.
Sales Volume To increase salesvolume and grow.
CompetitionTo beat domesticcompetition, compete globally evencounter competition.
Government Policy Incentives for
export or government policy not toallow volume exclusion of someindustries.
Evaluation Attributes: General: Political Economy
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Currency
Infrastructure Government Regulations/Bureaucracy
Tax
Can it be a market hub?
Specific: Demand Competition/Price Sensivity
Manufacturing cost
Government Policy/Incentives for business
Cultural influence on Marketing Mix.
Strategic International Market Entry ChoicesLeveraging Internal
CompetencyManaging Uncertainty
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- Asset Specificity
- Strategic Resource
- Context Specificity
Choice of International
Mode of Entry
Internalization
Direct Exports
Greenfield Investments
Acquisitions
Indirect Exports
Contractual Agreements
-Licensing- Franchising
- Syndication
- Turnkey Projects
Equity Joint Ventures
- Minority
- Equal
- Majority
Collaboration
Managing Uncertainty
- Environmental
- Behavioral
Entry Mode Selection
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Entry Mode Selection
Tradeoffs Risk Return
Control Investment
Market Entry Strategies
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y g
I di t E ti
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Indirect Exporting
Exporting via intermediariesin domestic market
Via domestic clients Export houses/ trading companies
Piggybacking
Co-operative export venture Clients buying offices in homemarket
Direct Exporting
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1. Exporting via intermediariesin foreign market
2. Direct selling to firms
within the foreign market(e.g. large companies-industrial goods)
3. Mail order
4. Via local sales office
5. Direct to government body
Contrasting AdvertisingPerspectives (Aithison 2002)
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Perspectives (Aithison 2002)
Western Atomisticbroken
down to smallestcomponent parts
Unique selling
propositions
How to
Positioning
May be dull and
boring Copy focused
Asian Holistic
Everythingrelates to
everything else
How things fittogether andrelate
Visual and oral
Jim Aitchison, How Asia Advertises,New York: Wiley, 2002.
Advertising ContentComparisons
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Comparisons
American: Individual benefit and pleasure(e.g., Make your way through the
crowd) Korean
Collective values (e.g., We havea way of bringing people together)
Debate and Conflict
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The first person to raise his voice haslost the argument. (Chinese proverb)
Use of indirection and projection
Face-to-face vs. anonymous comments
Western adversarial rule of law basedon consistent universal ideals vs.solution for the case at hand in context
Relationships, Education,
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and Work Western
Standing out; being better
Self perceived favorably
Self-esteem building
Work longer on successful job
Eastern Harmony
Must weed out personal characteristics thatmight annoy others
Taught self-criticism
Not recognized in profession until after manyyears of practice
Work longer on unsuccessful job
Physical Product vs.Communication Adaptations
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Communication
adaptations not
needed
(extension)
Communication
adaptations
needed
Product
adaptations not
needed
(extension)
Some industrial
equipment; some
electrical
equipment
Bicycle; fast food;
chewing gum
Product
adaptations
needed
Gasoline; laundry
detergent
Greeting cards
Domestic
equivalent does
not exist(product
invention)
Compass-equipped prayer rug; hand
powered washing machine
CONSUMER INCOMES ANDBUYING POWER
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BUYING POWER
Measuring country wealth
gross domestic product
purchase parity vs. nominal
Government role in the economy
Tax burden
Services provided by the Governmente.g., health care, education
Country of OriginEffects
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Effects
Perception of product quality (e.g., Japan, Germany)
elegance and style (e.g., France, Italy)
Historical associations
Positioning strategies
Emphasis on origin (e.g., French wine)
De-emphasis/obfuscation of of country oforigin (e.g., French beer, Americanproducts with French language labels)
Nominal vs. Purchase ParityAdjusted GNPsExamples (2003)
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Adjusted GNPs Examples (2003)
Countr
U i d SSource: World Bank (http://www.worldbank.org/data/databytopic/GNIPC.pdf)
The Hamburger Standard (fromthe Economist)
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the Economist)
Country Local Price in US$ Buying power relative to U.S.
U.S. $2.71 1.00
Britain 3.14 .75
Egypt 1.35 2.00
Mexico 2.18 1.24China 1.20 2.26
Switzerland 4.59 0.59
Market Entry Strategies
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Exporting Low investment Low control of
promotion
Licensing
Low investment Low control of
promotion,positioning, andquality
Able to benefit fromexistingdistribution andmarket knowledge
Joint venture Considerable investment More control
Able to benefit frompartners experience
Must work with partner
Direct investment Large investment
Risky
Greater control
May lack knowledge of
market
Market Positioning StrategiesAcross Countries
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c oss Cou es
Hagen-DazsU.S. vs. Japan Corona BeerMexico vs. U.S.
Mercedes-BenzEurope vs. U.S.
McDonalds U.S.
Europe
Developing countriese.g., China
U.S. Laws of Interest tofirms with U.S.I l t
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Involvement Anti-trust Foreign CorruptInfluences
Anti-boycott laws Trading With the Enemy
The International Lifel
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Cycle Market for older technologytends to exist in lessdeveloped countries Manufacturing of older
generation technology--e.g.,Pentium I computers
Resale of capital equipmente.g., DC 8 aircraft, old threepart canning machines
Some countries tend to bemore receptive toinnovation than others
Leap frogging Going directly from
old technology to thevery newest, skippingintermediate step(e.g., wireless ratherthan wired technology)
Shorteningof productlifecycles