[ ]Marketing StrategyBusiness Strategy Decisions and Their Marketing Implications
Marketing StrategyBusiness Strategy Decisions and Their Marketing Implications
Welcome to
Business-Unit Competitive Strategies
Com
petitive strategy
Differentiation
Cost leadership
Emphasis on new product-market growthHeavy emphasis No emphasis
Prospector Analyzer Defender Reactor
Units primarily concerned with attaining growth
through aggressive
pursuit of new product-market opportunities
Units with strong core bus.;;
actively seeking to expand into rel. prod-mkts
with differentiatedofferings
Units with strong core bus.;;
actively seeking to expand into rel. prod-mktswith low-costofferings
Units primarily concerned with maintaining a differentiated position in
mature markets
Units primarily concerned with maintaining a low-cost position in
mature markets
Units with no clearly defined product-market development or competitive strategy
How Business Strategies Differ in Scope, Objectives, Resource Deployments, and Synergy
Dimensions•Scope•Goals and obj. Adaptability (new product success) Effectiveness (inc.mrkt share) Efficiency (ROI)•Resource deployment•Synergy
Low-cost defenderMature/stable/well-defined domain;; mature tech.and cust. segments
Very little
Low
HighGenerate excess cash (cash cows)Need to seek operating synergies to achieve efficiencies
Differentiated defenderMature/stable/well-defined domain;; mature tech.and cust. segment
Little
Low
HighGenerate excess cash (cash cows)Need to seek operating synergies to achieve efficiencies
How Business Strategies Differ in Scope, Objectives, Resource Deployments, and Synergy
Dimensions•Scope•Goals and obj. Adaptability (new product success) Effectiveness (inc.mrkt share) Efficiency (ROI)•Resource deployment•Synergy
ProspectorBroad/dynamic domains;; tech. and cust. segments not well-established
Extensive
HighLowNeed cash for product dev. (? or *)Danger in sharing operating fac. and programs - better to share tech./mktg skills
AnalyzerMixture of defender and prospector strategies
Mix. of defender & prospector strats.Mix. of defender & prospector strats.Mix. of def. & prosp. stratsNeed cash for prod. dev. but < prospectorsDanger in sharing operating fac. and programs - better to share tech./mktg. skills
Combination of the two perspectives
Com
petitive strategy
Differentiation
Cost leadership
Emphasis on new product-market growthHeavy emphasis No emphasis
Prospector Analyzer Defender Reactor
Units primarily concerned with attaining growth
through aggressive
pursuit of new product-market opportunities
Units with strong core bus.;;
actively seeking to expand into rel. prod-mkts
with differentiatedofferings
Units with strong core bus.;;
actively seeking to expand into rel. prod-mkts with low-costofferings
Units primarily concerned with maintaining a differentiated position in
mature markets
Units primarily concerned with maintaining a low-cost position in
mature markets
Units with no clearly defined product-market development or competitive strategy
The Role of Internet towards Firms’
Competition
The Internet makes it easier for buyers and sellers to compare prices, reduces the number of middlemen necessary between manufacturers and end users, cuts transaction costs, improves the functioning of the price mechanism, and thereby increases competition.
The Role of Internet towards Firms’
Competition
One possible outcome is that it will be harder for firms to differentiate themselves on any basis other than low price.
The Role of Internet towards Firms’
Competition
All business-level competitive strategies focused on differentiation will become less viable.
The Role of Internet towards Firms’
Competition
Unique new products and services will continue to emerge and provide a way for the innovator to gain a competitive advantage.
The Role of Internet towards Firms’
Competition
Firms with the resources and competencies necessary to produce a continuing stream of new product or service offerings that appeal to one or more customer segments-that is, to effectively implement a prospector strategy-should be successful regardless of whether they are lowest-cost producers in the industries.
The Role of Internet towards Firms’
Competition
If a firm offers unique benefits that a segment of customers perceive as meaningful, it should still be able to differentiate its offering and command a premium price.
The Role of Internet towards Firms’
Competition
The Internet will make it easier for firms to customize their offerings and personalize their relationships with their customers. Such personalization should differentiate the firm from its competitors in the customer’s eyes and improve customer loyalty and retention.