1 / 16

Strategic Positioning

Strategic Positioning. Chapter 2. Target market May result in different treatment of different customers All employees must understand target market Service concept Why customers choose a particular firm Motivation can be emotional or physical. Strategic Service Vision.

Rita
Download Presentation

Strategic Positioning

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Strategic Positioning Chapter 2

  2. Target market May result in different treatment of different customers All employees must understand target market Service concept Why customers choose a particular firm Motivation can be emotional or physical Strategic Service Vision Chapter 2 - Strategic Positioning 1

  3. Strategic Service Vision • Operating strategy • How should the firm be structured to produce the service concept? • How should resources be allocated? • Service delivery system • Specific decisions made by the firm regarding personnel, procedures,equipment, capacity, facilities, etc. Chapter 2 - Strategic Positioning 2

  4. Target Market Service Concept Operating Strategy Service Delivery System Strategic Service Vision • Ideally, a service delivery system should support the operating strategy, which should support the service concept, which supports the target market Chapter 2 - Strategic Positioning 3

  5. Capacity Strategies • Capacity issues in services are: • More complex than in manufacturing • Timing may be important, for example if there are peaks in demand at different times of day • More critical than in manufacturing • Often no backorders can occur • Excess capacity may be perishable • An imbalance in supply and demand can result in lost sales or idle employees Chapter 2 - Strategic Positioning 4

  6. Capacity Strategies • Provide: Ensure sufficient capacity at all times • High quality/high cost; greater amount of idle time for employees • Match: Change capacity as needed • Balance quality/cost; part-time workers • Influence: Alter demand patterns to fit firm capacity • Pricing, marketing and appointment systems • Control: Maximize capacity utilization • Compete on cost by driving idle time to zero Chapter 2 - Strategic Positioning 5

  7. Techniques for managing capacity • Work-shift scheduling • Increased customer participation • Adjustable (surge) capacity • Shared capacity • Partitioned demand • Price incentives for and promotion of off-peak demand • Development of complementary services • Yield management Chapter 2 - Strategic Positioning 6

  8. Retail Design Strategies • Store sizes have been increasing over the last decade • Supermarkets: • 50K sq. ft. now vs. 20K in the 1980s • 40,000 SKUs vs. 6,000 in the 1980s • WalMarts • 200K sq. ft. vs. 70K in the 1980s Chapter 2 - Strategic Positioning 7

  9. Why larger stores? • Marketing Motivation • Increased revenue/sq. ft. due to a greater pull of customers • “One stop shopping” for dual income families • Grocery stores have banks, pharmacies, flowers, etc. • Operational Motivation • Fewer employees per customer are required for a given service quality. • Lower inventory carrying costs and distribution costs Chapter 2 - Strategic Positioning 8

  10. An Alternative: A Small Store Strategy • Managing stores as a network is critical • Blanket a given geographical area • Multiple locations reduce travel time for customers • Small stores reduce shopping times • Distribution costs are low because stores are close to one another • Labor can move from location to location • Flexible job descriptions reduce idle time Chapter 2 - Strategic Positioning 9

  11. Managing for Growth Multi-site Service Firm Life Cycle Entrepreneurial Multi-siteRationalization Growth Maturity Decline/Regeneration Chapter 2 - Strategic Positioning 10

  12. Managing Growth – Skill Sets Chapter 2 - Strategic Positioning 11

  13. Growth Strategies • Industry Roll-Ups • Use stock to buy up dozens of small firms in a fragmented industry • Gain synergies when once-competing firms share facilities, supplies, marketing expenses and operational expertise Chapter 2 - Strategic Positioning 12

  14. Franchising • A self-financing growth strategy • Franchisees pay an up-front fee and a percentage of gross revenue • Can limit profitability because a large portion of the profits go to the franchisee • Firms may buy back mature franchises • Common in international expansion • Bypass “ethical walls”/US Foreign Corrupt Practices Act Chapter 2 - Strategic Positioning 13

  15. Challenges of Franchising • Channel conflict • For example, retail outlets may oppose the introduction of on-line channels • Operational control issues • Franchisees may oppose changes initiated at the firm level • Franchisers cannot dictate retail prices or require that franchisees purchase supplies from the franchiser • Franchisers providing on-going value Chapter 2 - Strategic Positioning 14

  16. Franchising Agreements • Passive ownership • Franchisees are not actively involved in the operations of the franchise • Master franchise agreements • Allows an individual or corporate group other than the firm to award franchises • Fee structure • Average of $20,000 fee + 7% royalties • Can affect the ability to monitor free-riders or brand shirkers • Geographic protection for franchisees Chapter 2 - Strategic Positioning 15

More Related