Marketing for MOST Module 03 - Market Oriented Strategic Planning

1. Marketing for MOSTModule 03 - Market Oriented Strategic Planning 技術経営コンソーシアム 開発担当者 ：Ritsumeikan Asia Pacific University　教授: Takamoto, Akihiro 更新日 October, 2003

2. Module 03: Market Oriented Strategic Planning • What is Market-Oriented Strategic Planning? • Defining the Mission of the Organisation • Analysing the Business Environment • Defining the Business Domain • Defining Objectives and Goals • Strategy Formulation • Program Formulation, Implementation, Evaluation and Control • Oriental Philosophy of Strategy

3. What is Market Oriented Strategic Planning • Market oriented strategic planning is the managerial process of developing and maintaining a viable fit between the organization’s objectives, skills, and resources and its changing market opportunities. The aim of strategic planning is to shape and reshape the company's businesses and products so that they yield target profits and growth.

4. What is Market Oriented Strategic Planning • Q1: Why is Market Oriented Strategic Planning needed? • Mega Competition • Only the fittest survives • Q2: What is the alternative to being ‘market oriented’? What are the other things to which a company can be oriented?

5. What is Market-Oriented Strategic Planning? • Market Oriented Strategic Planning according to MUANGSUWAN A-non. Organization Organization Objectives And Resources Customer Needs & Wants Changing market environment Objectives And Resources Customer Needs & Wants Changing market opportunity

6. Defining the mission of the Organization • Ask: • What is our business? • Who is the customer? • What do customers value? • What should our business be?

7. Defining the mission of the Organization • A clear mission statement acts as an “invisible hand” that guides people in the organisation.

8. Defining the mission of the Organization • Good Mission Statements according to P. Kotler: • Focus on a limited number of goals • Stress the major policies and values • Define the major competitive scopes • (industry, products, competence, market-segment, vertical integration, geographical scope)

9. Defining the mission of the Organization • P. Kotler says: • “Mission statements are at their best when they are guided by a vision, an almost impossible dream that provides a direction for the company for the next 10 to 20 years.”

10. Defining the mission of the Organization An excellent mission statement has: • Uniqueness which the employees can feel proud of. • A tangible quality to which the employees can relate daily. • A reflection of the leadership vision.

11. Defining the mission of the Organization • Case 3-1: “Our Credo” by Johnson and Johnson • Case 3-2: Mission Statement of Starbucks • Case 3-3: Mission Statement of the Japan Industrial Daily. • Case 3-4: Mission Statement of Kaiser Sand and Gravel (see left)

12. Defining the mission of the Organization • Concerning the Mission Statement by the Japan Industrial Daily: • I liked it; • I think people are a lot like water. • Dimitrova, Elitza • I realized how powerful and inspiring a good mission statement could be. Thought I could not fully understand the Japanese words, I felt the strength in it • FUN, Yee Luh • Though it appeared philosophical, it was crystal clear and struck my heart. Each and every line said what the firm wanted to say. It is a fantastic mission statement. • DOGRA, Shinjani.

13. Defining the mission of the Organization • Exercise: • Produce your own Mission Statements: • For your Business / Project • For your Professional Ccareer • For your Life.

14. Defining the mission of the Organization • My Mission Statement for Daily Life: • Wake up early. • Get a good, healthy breakfast. • Get out. • The outside world is pretty tough. • But show a pretty face all the time. • Be positive • PERERA, Sumudu.

15. Company Internal Environment Analysing the Business Environment Micro-Environment Macro-Environment

16. Analysing the Business Environment • Micro-Environment • The forces close to the company that affect its ability to serve its customers – the company, suppliers, marketing channel firms, customer markets, competitors, and public.

17. Analysing the Business Environment • Macro-Environment • The Larger societal forces that affect the microenvironment – demographic, economic, natural, technological, political, and cultural forces.

18. Analysing the Business Environment • The Organisations Internal Environment: • Top Management • Marketing • Finance • Accounting • R & D • Purchasing • Manufacturing • Distribution • Customer Relations • Human Resource Development • Corporate Culture • ETC…

19. Analysing the Business Environment • A Public: • Any Group that has an actual or potential interest in or impact on an organisation’s ability to achieve its objectives. • Demography: • The study of human population in terms of size, density, location, age, gender, race, occupation, and other statistics. • Compare: • Psychographics: • The study and classification of people according to their attitudes, aspirations, etc, especially in market research.

20. Analysing the Business Environment

21. Analysing the Business Environment • Exercise: • Do a SWOT Analysis of yourself at APUBS • Do a SWOT Analysis of any organisation or team you now belong to.

22. Defining the Business Domain • What is your business? • Who is the customer? • What is value to the customer? • What will be your business? • What should be your business?

23. Defining the Business Domain Product Oriented ()vs. Market-Oriented() Definitions: Company and Definitions of their Business • BMW • A car maker () • “Frende am Fahren” () • Dentsu • Advertising Firm () • Communications Excellence () • Sony • Electronics manufacturer () • “Dreams come true” () • Shiseido • We sell cosmetics () • We offer lifestyle, health, hopes and dreams ()

24. Defining the Business Domain Defining the Business à la D. Abell (Your Customer) WHO? Here is your Business! How? WHAT? (needs to be satisfied)

25. Defining the Business Domain Core Competence: • Is a source of Competitive Advantage • Has a potential breadth of applications • It is difficult for competitors to imitate (C.K Prahalad & Gary Hamel)

26. Defining the Business Domain What is Marketing Myopia? See Ref: What is Marketing Myopia And also: Marketing Myopia – By Theodore Levitt

27. Defining the Business Domain What are the causes of Marketing Myopia? • Misreading the customer want as their need. • Because of their product oriented definition (perception) of their business – they are not market oriented.

28. Defining Objectives and Goals • Some Managers use the term goals to describe objectives that are specific with respect to magnitude and time. • How do you use the following terms: • Aims, Goals, Objectives, Purposes?

29. Strategy Formulation • The essence of strategy formulation is coping with competition • The state of competition in an industry depends on five basic forces …Michael E. Porter

30. Strategy Formulation Potential Entrants Threat of New Entrants Industry Competitors Rivalry Among Existing Firms Buyers Suppliers Bargaining power of buyers Bargaining power of suppliers Substitutes The Five Forces governing competition in an Industry (Michael E. Porter)

31. STRATEGIC ADVANTAGE Uniqueness perceived by the customer Low Cost Position DIFFERENTIATION OVERALL COST LEADERSHIP Industry Wide STRATEGIC TARGET FOCUS Particular Segment Only Three Generic Strategies by Michael Porter Strategy Formulation

32. Strategy Formulation • Practice: • What do you think ofMichael Porters three Generic Strategies and five forces? • Do they help you sharpen your strategy?

33. Strategy Formulation • By the Way, What is Strategy? • How about tactics? • According to the Concise Oxford Dictionary: • Strategy = a plan of action or policy in business or politics etc. • Tactics = the plans and means adopted in carrying out a scheme or achieving some end. • Very Ambiguous!!!

34. Strategy Formulation • How about: • Strategy is concerned with broad and long-term policy and direction. • Tactics are concerned with opportunism and day to day conditions. The tactics have two purposes: to carry forward the overall strategy and to respond to the situation of the moment. The strategy is carried out by means of the tactics.

35. Strategy Formulation • Strategy is a deliberate search for a plan of action that will develop a business’s competitive advantage and compound it. -o0o- • The objective is to enlarge the scope of your advantage, which can happen only at someone else's expense. (Bruce D. Henderson)

36. Strategy Formulation • “Some make the deep-seated error of considering the physical conditions of a country as the most important for its inhabitants; whereas it cannot, I think, be disputed that the nature of the other inhabitants with which each has to compete is generally a far more important element of success.” Charles Darwin.

37. Strategy Formulation • Natural Competition is evolutionary • Strategic competition is revolutionary (Bruce D. Henderson)

38. Napoleon’s retreat from Moscow portrayed by Ernest Meissonier (1815-91) Strategy Formulation • Case Study:Napoleon succumbs to the strategy of Kutuzov • See Ref: napoleon.pdf

39. Program Formulation, Implementation, Evaluation and Control • Marketing Programs, and Action Plans • What will be done ? • When will it be done ? • Who is responsible for doing it? • How much will it cost?

40. Program Formulation, Implementation, Evaluation and Control • Peter Drucker said: • “Be effective rather than efficient”. • Effectiveness means the ability to get the right things done. • Efficiency is the ability to do things right.

41. Program Formulation, Implementation, Evaluation and Control • What is “McKinsey 7-S framework? • Why is it so important?

42. Program Formulation, Implementation, Evaluation and Control • Marketing Control • Marketing Control is the process of measuring and evaluating the results of marketing strategies and plans and taking corrective action to ensure that marketing objectives are achieved. • Don’t forget contingency plans!

43. Oriental Philosophy of Strategy • Strategic Philosphies of Sun Tzu • Sun Tzu said: The art of war is of vital importance to the State. It is a matter of life and death, a road to either safety or to ruin. Hence it is a subject of inquiry, which can on no account be neglected. • (Laying Plans, Sun Tzu) • If you know the enemy and you know yourself, you need not fear the result of a hundred battles. • (Attack by Stratagem, Sun Tzu) • Marketing is the contemporary art of war. • (Aki Takamoto)

44. Oriental Philosophy of Strategy

45. Oriental Philosophy of Strategy • Sun Tzu Said: • “Water shapes its course according to the nature of the ground over which it flows; the soldier works out his victory in relation to the foe whom he is facing. Therefore, just as water retains no constant shape, so in warfare there are no constant conditions. (weak points and strong).

46. Oriental Philosophy of Strategy

47. Oriental Philosophy of Strategy

48. Oriental Philosophy of Strategy • Reminder: • There is no definite form for managementAct just like water,Which follows the shape of any container,While retaining the power to break downa thousand feet high dam.

49. Oriental Philosophy of Strategy

50. Oriental Philosophy of Strategy Sun Tzu Said: • In the practical art of war, the best thing of all is to take the enemy’s country whole and intact; to shatter and destroy it is not so good. • Hence to fight and conquer in all your battles is not supreme excellence; supreme excellence consists in breaking the enemy’s resistance without fighting. • (Attack by Stratagem)