MARKET DEVELOPMENT STRATEGY
Find new markets for current products)
ENTER NEW GEOGRAPHICAL MARKETS
FIND NEW USES FOR EXISTING product
Find new TARGET MARKETS
PRODUCT DEVELOPMENT STRATEGY
(Develop new products for existing markets)
IMPROVE FEATURES
IMPROVE
QUALITY/RELIABILITY/DURABILITY ENHANCE AESTHETICS/STYLING ADD MODELS DIVERSIFICATION STRATEGY
(Develop new products for new markets)
THE 4 PS OF MARKETING
MARKETING MIX ISSUES
- Product Strategy
Specifying the exact product or service to be offered
New or existing product?...for new or existing customers?
- Promotion Strategy
How the product or service is to be communicated n customers
Push - spend $$$ on promotions and discounts to push products
Pull - spend $ to build brand awareness so consumer* will ask for it by name
- Channel or Place Strategy
Selecting the method for distributing the product or service
Distribute through dealer networks or through mas merchandisers?
Sell directly to consumers through own stores or througt internet?
- Price Strategy
Establishing a price for the product or service
Skim pricing (high) when you are a pioneer
Penetration pricing (low) builds market shares
Dynamic pricing (prices vary frequently) based on demand/availability
FINANCIAL MANAGEMENT STRATEGIES
CAPITAL ACQUISITIONS
- Debt Leverage, Stock Sales, & Gains from Operations
Equity financing is preferred for related diversification
Debt financing is preferred for unrelated diversification
Leveraged buyouts (LBOs) make the acquired firm pa off the debt
CAN WE GROW BY RELYING ON ONLY INTERNA CASHFLOWS?
DO STOCK SALES DILUTE OWNERSHIP CONTROL?
DOES A LARGE DEBT RATIO CRIPPLE FUTURE
DOES STRONG LEVERAGE BOOST EARNINGS PER dare?
DOES HIGH DEBT DETER TAKEOVER ATTEMPTS? DO MOST LBOs UNDERPERFORM 3-4 YEARS ~TER THE BUYOUT?
RESOURCE ALLOCATIONS
Dividends, Stock Price, & Reinvestment
Reinvest earnings in fast-growing companies
Keeping the stockholders contented with consistentdividends
Use of stock splits (or reverses) to maintain high stock prices
Tracking stock keeps interest in company, but doesnt allow takeover
RESEARCH & DEVELOPMENT STRATEGIES
LEVEL OF INNOVATION
- Pioneer (Leader) v. Copy Cat (Follower)
Technological leadership fits well with differentiation A follower strategy makes sense with cost-leader strategies Are we better at finding applications and customer adaptations than actually inventing something really new?
- Different types of R & D (basic, product, process)
Where is the firms historic expertise / advantage?
How competent are the R & D Personnel?
ACQUISITION OF TECHNOLOGY
- Internally developed v. acquired from outside
- T echnology Scouts
- Strategic Technology Alliances
- Acquire minority stake in promising high-tech ventures
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OPERATIONS STRATEGIES
MANUFACTURING LOCATION
- Internal Production v. Outsourcing
- Domestic Plants v. International Locations
- SYSTEM LAYOUT
- Product v. Process Layouts Job Shops v. Mass Production
Job shop/small batch production fits well with a differentiation strategy
Continuous production / dedicated transfer lines helps achieve cost leadership
Use of robots and CAD/CAM v. Labor intense manufacturing Modular Manufacturing and just-in-time delivery of sub- assemblies
Continuous improvement systems lower costs and increase quality
PURCHASING STRATEGIES
SOURCING COMPONENTS AND SUPPLIES WHERE
CAN THE HIGHEST QUALITY COMPONENTS BE FOUND?
- Outsourcing (our firm buys everything)
Buying on the Open Market (Spot) (prices fluctuate)
Long-Term Contracts with Multiple Suppliers (low bid)
Sole Sourcing (only one supplier) improves quality
Parallel Sourcing (two suppliers) provides protection
- Backward Integration (our firm has an ownership stake in the suppliers we use)
Quasi-integration (minority ownership position in a supplier)
Tapered (produce some of what we need, but not all)
Full (produce all of our own needs)
- Use of Component Inventories v. Just-in-time supph delivery
LOGISTICS STRATEGIES
DO WE GOODS THAT MUST BE TRANSPORTEL OR DELIVERED?
TYPE OF MATERIALS TRANSPORTED (Bulky or Compact?)
- Raw Materials, Supplies, & Components
- Finished Goods
BEST MODE OF TRANSPORTATION
- AIR
- RAIL
- TRUCK
- BARGE
DO WE WANT DEPENDABILITY, LOW COST, OI HIGH QUALITYSER VICE?
OUTSOURCE TRANSPORTATION OR DO IIYOURSELF?
- CONTRACT WITH OTHERS
Use Multiple Shippers v. Just One (UPS)?
Consider batch deliveries v. Just-in-time arrangements?
- OWNERSHIP IN DISTRIBUTION CHAIN
Quasi
Tapered
Full
HUMAN RESOURCES STRATEGIES
TALENT ACQUISITION
- Recruit from Outside v. Internal Development
- Require experienced, highly-skilled workers v. we wi train you
Offer top dollar wages & benefits v. mentoring and career
wORK ARRANGEMENTS Individual Jobs v. Team Positions
Narrowly-defined jobs v. Positions with discretion and
autonomy
- On-premises Work v. Telecommuting Options MOTIVATION & APPRAISAL
- Extrinsic v. Intrinsic Reward Systems Assessment for development v. assessment for rewards Incentives for ideas & originality v. incentives for conformity?
INFORMATION SYSTEMS STRATEGIES
WORKER PRODUCTIVITY & CONNECTIVITY Employees can be networked together across the globe Instant translation software for global firms Follow the Sun Management...pass projects on to the next team
SALES & INVENTORY MANAGEMENT Internet sales and development of customer databases Instant sales reports allow immediate inventory reorders
SHIPPING & TRACKING GOODS
FEDEX PowerShip software...stores addresses, prints labels, etc.
Tracking the progress of package shipment...FEDEX &
UPS
2.2. Strategies for enterprises of different industries
Strategies in Fragmented Industries
Fragmented industry characteristics:
- Localized markets with low entry barriers.
Few economies of scale opportunities exist.
High transportation costs for products.
Focus strategies predominate (customer group, region).
Competing in fragmented industries requires strategic c onsolidation by:
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- Chaining (Wal-Mart)
- Franchising (McDonalds) v
- Horizontal mergers (Dillards) v
- Using the Internet (eBay)
