• Tapes sector to maintain leadership and

gain more profits, more sales force and less SBUs • Allocate resources Market
ads and efforts for SBUs
• Drug sector spend more on R&D and ads sake
• Alliances to expand Strategy SBUs
• How to compete
• New products in current and new markets
Strategy fit

• 60,000 products Profile Corporate

• New Products
• 6 Major Sectors
Implications
3. Business Strategies and Their Marketing
3.1 Strategic Decisions at the Business-
Unit Level

Corporate Level

Mission
SBU Level
Scope
Marketing Level
Resources
Objective SBU Competition Plan
Deployment
Objectives
3.1.1 How Should Strategic Business Units
Be Designed?
Ideal

NO 2 SBUs
Homogenous compete on
Authority over Responsible for
Markets & same
success factors profitability
Limited techs customers with
same products

Practical
Same customer
Technical compatibility Same customer needs
behaviour
3.1.2 Business-Unit Objectives

SBUs/
Products Sub-
objectives

Stable New

High ROI is not the

High ROI High share
profitability important now
3.1.3 Allocating Resources within the
Business Unit

Resources
between e nt
markets?? es tm
d in v
hare
S

Value-based
Portfolio
planning

Use activity-
based costing
system
3.2 How Do Businesses Compete?

SBU core
Customers Industry Competitive
competencies
characteristics Characteristics Advantage
and resources
3.2.1 Generic Business-Level Competitive
Strategies

Cost Differentiation Focus

(Effective
Design, service (little piece)
Operation)
3.2.1 Generic Business-Level Competitive
Strategies

Analyzer
Attempts to maintain
Prospector Defender a strong position in Reactor
Focus on growth Maintaining their its core product-
through the positions in market(s) No clearly define
development of new
products and markets
established product-
markets
Also seeks to expand strategy .
into new– usually
closely related –
product-markets
3.2.1 Generic Business-Level Competitive Strategies
3.2.2 Do the Same Competitive Strategies Work for
Single-Business Firms and Start-ups?

Yes
 Same set of generic competitive strategies is just as appropriate
for small firms as for business units within larger ones

BUT there are differences

 Marketing and business strategies blur and comes as one
 By definition start-ups do not have an established market
position to defend, they begin as prospectors
3.2.3 Do the Same Competitive Strategies
Work for Service Businesses?
Yes
 AMEX tailored to specific segments of the firm’s credit-card
holders
 Others focus narrowly on defending established positions
in current markets
 Cable &Wireless is considered as differentiated analyzer.
3.2.4 Do the Same Competitive Strategies
Work for Global Competitors?
Analyser
 Defend in home and foreign well-established markets and
prospect in new markets
 This suggests that a single SBU may need to engage in different
functional activities
 Adopt different organisational structures to implement those activities
 Huawei works as defender in China and prospector outside
3.2.5 Will the Internet Change Everything?
Yes
 Price differentiations , but is not the only thing
 Innovation will increase at prime prices
 Excellent communication tool for segments
 Personalization and customization, such as logistical alliances
among organisational buyers and their suppliers

Price Innovation Communication Personalization

3.3 How Do Competitive Strategies Differ
from One another?

Scope Objectives Competitive Resources Synergy

3.3.1 Differences in Scope

Prospector
Wide
range
3.3.2 Differences in Goals and Objectives

Effectivene Adaptabilit
Efficiency
ss y
Profitability &
ROI New successful
Sales Growth
products
3.3.3 Differences in Resource Deployment
3.3.4 Differences in Sources of Synergy
3.4 Deciding When a Strategy Is Appropriate: The Fit
between Business Strategies and the Environment

Prospector Analyser Low cost Differentiated

Defender Defender
Market Newborn Some still Mature or decline Mature or decline
Tech. Undeveloped Basic Developed Fully developed Fully developed
Business Strong R&D Good R&D but Process Sources supply
Relative not the best engineering and process
Strengths and quality engineering to
control and/or in make lower cost
marketing, sales, than competitors
distribution or
customer
services.
Competition Few Many but shaky Few well Few well
established ones established ones
3.4.1 Appropriate Conditions for a
Prospector Strategy
Market
• New products and or/ shifting customer needs

Relative Strengths
• R&D
• Marketing Research

Competition
• Few competitors

Technology
• New on, with many undeveloped applications
3.4.2 Appropriate Conditions for an
Analyser Strategy
Market
• Late growth or early maturity
• One segment are not approached yet

Relative Strengths
• R&D but as good as main competitors
• Marketing Research

Competition
• Many competitors with shaky future
• One or more competitors hold large portion

Technology
• Basic existing technologies
• New Products at the same time
3.4.3 Appropriate Conditions for a Defender
Strategy
 It is most appropriate for units with a profitable share of
one or more major segments in a relatively mature, stable
industry
 Initiate process improvements, product improvements, or
line extensions to help protect and strengthen their
established positions
 Works best in industries where the basic technology is not
very complex
3.4.3.1 Differentiated Defenders
Market
• Maturity or decline stage

Relative Strengths
• Superior product quality >> production, process engineering, quality control
and perhaps product engineering and marketing to develop product
improvements

Competition
• Few well established competitors
• Possibility of acquisition

Technology
• Basic technology fully developed and stable; few major modifications or
improvements likely
3.4.3.2 Low-Cost Defenders
Market
• Maturity or decline stage

Relative Strengths
• Low cost production >> superior sources of supply, R&D, process engineering,
product engineering, sales effort. Mass production … etc.

Competition
• Few well established competitors
• Possibility of acquisition

Technology
• Basic technology fully developed and stable; few major modifications or
improvements likely
3.5 How Different Business Strategies
Influence Marketing Decisions
 Marketing manager monitors and evaluates the product’s
environmental situation and develops a marketing
program suited to it.
 Business unit’s competitive strategy might be a constrain
 SBU’s strategy influences the amount of resources committed
to marketing
 And influences kind of market and competitive situations
 NO 100% mapping between SBU strategy and marketing
components picked, but still some generic observations
could be noticed
3.5.1 Product Policies

Define quality
3.5.2 Pricing Policies
3.5.3 Distribution Policies

Case by case
3.5.4 Promotion Policies
3.6 What If the Best Marketing Programme for a Product Does
Not Fit the Business’s Competitive Strategy?

Analyser
• Low R&D • Eventually
budget • Intermediate • Might cause
• Limited stage cultural shocks
products

Defender Prospector

Old Org New Org

Marketing manager is responsible for pointing
Prospector out any mismatches between what is best for the
Prospector product and the capabilities of the organisational
unit to which it belongs
Defender