“Success today

requires the
agility and drive
to constantly
rethink,
reinvigorate,
react, and
reinvent.”
– Bill Gates
 Initiatives by Apple

https://www.youtube.com/watch?v=gFWWP
ECmp64
 “FedEx is proud to play an
active role in improving lives
and creating possibilities,
whether it's by donating
critical relief supplies or
helping locally through our
volunteering initiatives. We
are committed to supporting
the communities in which
we live and work,”
said Jack Muhs, regional
president, FedEx Express
Middle East, Indian
Subcontinent and Africa.
 Strategy

Developing the right marketing

strategy requires a blend of
discipline and flexibility
 Value Chain

A series of consecutive steps that go into the

creation of a finished product, from its
initial design to its arrival at a customer's
door.
 The concept was conceived by Value Chain Steps:
Harvard Business School
Professor Michael Porter in his 1.Determine the business' primary
book The Competitive and support activities.
Advantage: Creating and
2.Analyze the value and cost of
Sustaining Superior
Performance
Value Chain the activities.
3.Refer to your competitors' value
chains.
4.Understand your customer
base's perception of value.
It works by breaking an 5.Identify opportunities to gain a
organization's activities down competitive advantage.
into strategically relevant
pieces, so that you can see a
fuller picture of the cost
drivers and sources of
differentiation, and then make
changes appropriately.
6
 Value Chain Analysis

Firm Infrastructure Management, finance, legal, planning

SUPPORTING ACTIVITIES

Professional development, employee relation, performance appraisal,

HR Management wages etc.

Technology
Integrated supply chain system, real-time sales information
Development

MARGINS
Real-time inventory, communication with suppliers, purchase supplies &
Procurement materials

Inbound Logistics Operations Outbound Logistics Marketing & Sales Services

PRIMARY ACTIVITIES

• Real-time inbound • Standardized • Order processing • Pricing • Delivery

inventory data model • Full delivery • Communication • Installation
• Location of • Access to trucks • Promotion • Repair
distribution facilities real-time sales • Product based • Greeters
• Trucks and inventory on community • Customer service
• Warehouse system needs focus
• Material Handling • Low prices
 Some Examples of Master Marketers
Amazon.com Enterprise Rent-A-Car Red Bull
Apple Google Ritz-Carlton
Bang & Olufsen Harley-Davidson Samsung
Best Buy Honda Southwest Airlines
BMW IKEA Starbucks
Caterpillar LEGO Target
Club Med McDonald’s Tesco
Costco Nike Toyota
Disney Nordstrom Virgin
eBay Procter & Gamble Walmart
Electrolux Progressive Insurance Whole Foods
 Marketing Plan

The central instrument for directing and

coordinating the marketing effort
Marketing Plan

Strategic Marketing
It lays down the target markets and firm’s value proposition,
based on the analysis of the best market opportunitites Plan

Tactical
This specifies the marketing tactics, including product features,
Marketing Plan promotion, merchandising, pricing, sales channels and services
Central Role of Strategic Planning

Managing the businesses as an

investment portfolio

Assessing the market’s growth rate

and the company’s position in that
market

Establishing a strategy
Organizational Levels

Corporate

Division
Business

Product
Strategic Planning, Implementation, and
Control Processes
Corporate and Division Strategic Planning

Assessing growth
opportunities

Assigning resources to each

SBU
Establishing SBU’s

Defining the corporate

mission
 Defining the Corporate Mission

According to Peter Drucker, to

define mission, a company should
describe following points
• What is our business?
• Who is the customer?
• What is of value to the
customer?
• What will our business be?
• What should our business be?
Good Mission Statements

• Focus on a limited number of goals

• Stress the company’s major policies and values
• Define the major competitive spheres within
which the company will operate
• Take a long-term view
• Are as short, memorable, and meaningful as
possible
Apple's mission statement is: “to bring the best user experience
to customers through innovative hardware, software, and
services.”

Amazon's mission is "to be Earth's most customer-centric

company”

Netflix's mission statement - “We want to entertain the world”

Google’s mission statement – “to organize the world's

information and make it universally accessible and useful”
Strategic Business Unit

An independently managed
division of a large
organization with its own
vision, mission and
objectives responsible for
planning, developing,
producing and marketing its
own goods or services
Characteristics of SBU’s

• A single business or collection of related businesses

• Has its own set of competitors
• Has a leader responsible for strategic planning and
profitability
• Has a unique objective that differentiates it from the
rest of the organization or other business units
• Has a well-defined and well-researched target
market
• They have responsibility for their own profit
Important Point

General Electric (GE) was one of the first

companies to implement Strategic Business
Units(SBUs) in the 1960's. Today, the company has
approximately 49 separate strategic business units
in energy, finance, software, water, and healthcare
Coca Cola is geographically split into five geographic
operating segments, also known as strategic business units
(SBU's). The five SBU's are North America, Africa, Asia,
Europe, Eurasia and Middle East and finally Latin America.
 Assigning Resources to SBU’s
Two of the most widely used portfolio planning approaches

BCG Growth Share Matrix

General Electric Approach

Boston Consulting Group (BCG) growth-share matrix

A chart designed by Bruce Henderson for the Boston Consulting Group in

1968

A BCG matrix helps businesses understand their current and future

competitive landscapes.

The matrix enables to determine which assets could produce future revenues
and make investment decisions that ensure funds are allocated to the right
assets.

Two dimensions: Relative Market share and Growth rate

 The BCG Matrix

STARS QUESTION MARKS

• Businesses with low share in high growth

• Businesses have large share of
Future Market Growth Rate market
high growth market.
• Potential to grow & become market
• Although stars are profitable, they
leaders/stars
usually consume considerable cash to
• May need to eventually be divested if
continue growth
(%)

they cannot grow without significant

financial investment
• Businesses have high share of low
growth market • Business units with low share in
• Often highly profitable and established low growth market
leaders • Often marginal business that in
• Usually have excess cash which can cur small profit or losses
be utilized in star and question mark
business units
CASH COWS DOGS

Relative Market Share

The BCG Matrix and Product Life Cycle
 The BCG Matrix and Strategies

• Managers must think also about their

Build strategy performance in long term.

• For cash cows products

• Build means invest in them if they are

worthy to the future to transfer them to

stars Harvest strategy

• For question market products

• For dogs’ products to remove or

withdrawal them from the market to

Hold strategy
stop loses or think about the cost to

• The aim is to preserve market share revive them again.

and consider transferring them to cash

cows.
Divest strategy
• For stars products
 Boston Consulting Group - Advantages

The BCG-Matrix is helpful for managers to evaluate balance in the companies

current portfolio of Stars, Cash Cows, Question Marks and Dogs.

BCG-Matrix is applicable to large companies that seek volume and experience

effects.

The model is simple and easy to understand.

It provides a base for management to decide and prepare for future actions.
 Boston Consulting Group - Disadvantages

The model neglects small competitors that have fast growing market shares.

The distinction between high and low is highly subjective.

The BCG matrix is a great starting point, it’s not enough on its own to guide
the future of a company.

It won’t provide enough information for handling complex business problems.

 General Electric Approach
General Electric introduced a comprehensive portfolio planning tool called a
strategic business-planning grid.

Like the BCG approach, it uses a matrix with two dimensions – one
representing industry attractiveness (the vertical axis) and the other one
representing company strength in the industry (the horizontal axis).

The GE matrix was developed by Mckinsey and Company consultancy group

in the 1970s.

The nine cell grid measures business unit strength of the SBU’s against
industry attractiveness and this is the key difference.
 General Electric Approach
The GE Matrix is plotted in a two-dimensional, 3 x 3 grid.

The Y-axis measures market attractiveness based on a high, medium, or low

score.

The X-axis measures business unit strength on a high, medium, or low score.
 General Electric Approach
High Medium Low
A mixture of solid business
performance and an
High attractive industry. They are
primed for growth and
should be allocated
resources and capital.
These blocks aren’t
performing optimally or
operate in an unattractive
Medium industry. These business
units require a more
conservative approach to
either growth or divestment
strategies.
A business should be
Low
closed, further investment
should be withheld, or the
company should be run for
cash.
BCG Matrix - General Electric Approach Similarities
Both use a two-dimensional graph to plot a company's business units or
products.
Both divide the business units or products into different categories based on
their performance.
Both are used to help a company make decisions about which areas of its
business to invest in and which to divest from.
Both are used to evaluate the company's portfolio of products, business units
or investments.
Both are based on the idea of analyzing the performance of a company's
different products or business units in order to identify those that are doing
well, those that need improvement, and those that should be divested.
BCG Matrix - General Electric Approach Difference
Assessing Growth Opportunities
The Strategic- Planning Gap
 Ansoff Matrix
The Ansoff Matrix was originally developed by H. Igor Ansoff in 1957

The Matrix is used to evaluate the relative attractiveness of growth strategies

that leverage both existing products and markets vs. new ones, as well as the
level of risk associated with each.

Portfolio planning tool to analyze and plan their strategies for growth.

It is called as the Product/Market Expansion Grid

Ansoff Matrix
 Ansoff Matrix
Each box of the Matrix corresponds to a specific growth strategy. They are:

• Market Penetration – The concept of increasing sales of existing products into

an existing market
• Market Development – Focuses on selling existing products into new markets
• Product Development – Focuses on introducing new products to an existing
market
• Diversification – The concept of entering a new market with altogether new
products