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Business Strategies and Their Marketing Implications

Business Strategies and Their Marketing Implications. 3. 3m. SBUs Industrial & Transportation (adhesives & filters) Health Care Consumer & Office Sector Electro & communications sector Display & Graphics sector New Product Devlopment 30% of annuals from new products.

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Business Strategies and Their Marketing Implications

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  1. Business Strategies and Their Marketing Implications 3

  2. 3m • SBUs • Industrial & Transportation (adhesives & filters) • Health Care • Consumer & OfficeSector • Electro & communications sector • Display & Graphics sector • New Product Devlopment • 30% of annuals from new products

  3. Scotch-Brite Never Rust • Invest in new plants • Big Ad budget • Maintain profitability in other lines • Post-it notes • Magic Transparent Tape

  4. Discussion Question 2. On what basis do businesses compete?

  5. Porter’s Generic Strategies • Overall Low Cost Leadership • Differentiation • Focus

  6. Robert Miles & Charles SnowProspector

  7. Defender

  8. Analyzer

  9. Reactor

  10. Exhibit 3.2Combined Typology of Business-Unit Competitive Strategies Emphasis on new product-market growth Heavy emphasis No emphasis Prospector Analyzer Defender Reactor Units with strong core bus.; actively seeking to expand into rel. prod-mkts with differentiated offerings Units primarily concerned with maintaining a differentiated position in mature markets Differentiation Units primarily concerned with attaining growth through aggressive pursuit of new product-market opportunities Units with no clearly defined product-market development or competitive strategy Competitive strategy Units with strong core bus.; actively seeking to expand into rel. prod-mkts with low-cost offerings Units primarily concerned with maintaining a low-cost position in mature markets Cost leadership

  11. Single Business Firms • Belvedere Vodka • Startups • Start Life as Prospectors • Services • EmiratesAirline • Differentiated analyzer • Global Competitors • One of the analyzer strategies

  12. How Business Strategies Differ in Scope, Objectives, Resource Deployments, and Synergy Exhibit 3.4. • Dimensions • Scope • Goals and obj. Adaptability (new product success) Effectiveness • (inc. mrkt share) Efficiency (ROI) • Resource deployment • Synergy Low-cost defender Mature/stable/well-defined domain; mature tech.and cust. segments Very little Low High Generate excess cash (cash cows) Need to seek operating synergies to achieve efficiencies Differentiated defender Mature/stable/well-defined domain; mature tech.and cust. segment Little Low High Generate excess cash (cash cows) Need to seek operating synergies to achieve efficiencies

  13. How Business Strategies Differ in Scope, Objectives, Resource Deployments, and Synergy Exhibit 3.4. • Dimensions • Scope • Goals and obj. Adaptability • (new product success) Effectiveness • (inc. mrkt • share) Efficiency • (ROI) • Resource deployment • Synergy Prospector Broad/dynamic domains; tech. and cust. segments not well-established Extensive High Low Need cash for product dev. (? or *) Danger in sharing operating fac. and programs - better to share tech./mktg skills Analyzer Mixture of defender and prospector strategies Mix. of defender & prospector strats. Mix. of defender & prospector strats. Mix. of def. & prosp. strats Need cash for prod. dev. but < prospectors Danger in sharing operating fac. and programs - better to share tech./mktg. skills

  14. Let’s combine the two perspectives and examine the book retailing industry Emphasis on new product-market growth Heavy emphasis No emphasis Prospector Analyzer Defender Reactor Units with strong core bus.; actively seeking to expand into rel. prod-mkts with differentiated offerings Units primarily concerned with maintaining a differentiated position in mature markets Differentiation Units primarily concerned with attaining growth through aggressive pursuit of new product-market opportunities Units with no clearly defined product-market development or competitive strategy Competitive strategy Units with strong core bus.; actively seeking to expand into rel. prod-mkts with low-cost offerings Units primarily concerned with maintaining a low-cost position in mature markets Cost leadership

  15. Discussion Questions 3. How might the Internet change how firms compete? Are these strategy typologies obsolete?

  16. Discussion Questions 4. What sorts of market, technological, and competitive conditions call for which of these strategies? What strengths are required for success with each?

  17. Prospector Industry & Market

  18. Prospector Technology

  19. Prospector Competition

  20. Prospector Business’s relative Strengths

  21. Analyzer I&M

  22. Analyzer Technology

  23. Analyzer Competition

  24. Analyzer BR strengths

  25. D Defender I&M

  26. D Defender Technology

  27. D Defender Competition

  28. D Defender BR Strengths

  29. LC Defender I & M

  30. LC Defender Technology

  31. LC Defender

  32. LC Defender

  33. Discussion Questions 5. What sort of marketing mix (4 P’s) is typically appropriate for each of these strategies? Can we generalize?

  34. Fit versus Future • Microwave Popcorn • 1970s Pillsbury rejected idea of microwavable food. • ActII

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