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MScIM Intensive Seminars Programme: Sept. 2003 Presenter: Professor Jaqueline Pels
Strategic Marketing Management
Professor Jaqueline Pels
University of Torcuato Di Tella
MScIM Intensive Seminars Programme: Sept. 2003 Presenter: Professor Jaqueline Pels
Type A Type B Type C
Learning outcome Undergrad students typically employ simplistic right-wrong positions in which “the truth” exists
Graduate students come to appreciate that much knowledge is unknown and that a process of discovery exists to complete “truth”.
Postgraduate students come to accpept that knowledge is complex and contextual so that no absolute truth exists; right and wrong only make sense within specified contexts
Role of the lecturer
To impart knowledge to passive students.
To direct students along the path of discovery.
The lecturer now becomes source of expertise guiding students.
Type of learning Basic information acquisition is the aim.
Students learn how to learn
Students know that they must exercise judgement, in doing so modifying and expanding knowledge.
Role of Student peers
Students peers are seen as not offering legitimate authorities of knowledge.
Students peers, aid the search for truth, helping in the distinguishing between the multiple perspectives that are now recognized to exist.
Other students become sources of learning and diverse opinions, ideas and information
MScIM Intensive Seminars Programme: Sept. 2003 Presenter: Professor Jaqueline Pels
Strategic Marketing Management
-ENVIRONMENTAL ANALYSIS-
MScIM Intensive Seminars Programme: Sept. 2003 Presenter: Professor Jaqueline Pels
Strategic Marketing Management
International marketer’s task is to:• identify opportunities for organisation’s
expansion into overseas markets;• match organisation’s capabilities with
opportunities;• formulate appropriate strategies;• build sustainable competitive advantage
in chosen overseas markets.
MScIM Intensive Seminars Programme: Sept. 2003 Presenter: Professor Jaqueline Pels
Strategic Marketing Management
• Effective internationalisation demands a systematic approach to the integration of strategic and tactical decision-making.
• By developing a systematic approach managers reduce risk associated with international expansion and increase probability of success.
MScIM Intensive Seminars Programme: Sept. 2003 Presenter: Professor Jaqueline Pels
Strategic Marketing Management
• Strategic decisions have fundamental implications for the long term future development of the organisation.
• Strategic decisions will determine the scope of the organisation's activities internationally in terms of business areas and target markets.
MScIM Intensive Seminars Programme: Sept. 2003 Presenter: Professor Jaqueline Pels
Strategic Marketing Management
The practices and principles of strategic marketing management provide the strategic framework within which all decisions relating to the international operations of the organisation will be made.
MScIM Intensive Seminars Programme: Sept. 2003 Presenter: Professor Jaqueline Pels
Strategic Marketing Management
3 levels of strategy:
• Corporate level
• Business unit level
• Functional / operational level
MScIM Intensive Seminars Programme: Sept. 2003 Presenter: Professor Jaqueline Pels
3 levels of strategy: the role of marketing
Strategic MarketingManagement
Marketing Management
Business 1
R&DProduction
& sourcing
Finance &
accountingMarketing
Human
resources
Business 2 Business 3 Business 4
Corporate strategy
MScIM Intensive Seminars Programme: Sept. 2003 Presenter: Professor Jaqueline Pels
Strategic business unit (SBU) is an operating
division of an organisation which serves a distinct product / market segment or a well-defined client group, set of customers, or geographic area. The SBU is given authority to make its own strategic decisions within corporate (or organisational) guidelines as long as it meets corporate (organisational) objectives.
MScIM Intensive Seminars Programme: Sept. 2003 Presenter: Professor Jaqueline Pels
Strategic Marketing Management
The ultimate aim of strategic marketing management is to ensure effective positioning of the organisation/SBU within its chosen international markets / industry / business areas / target market segments -based upon clearly identified sources of competitive advantage.
MScIM Intensive Seminars Programme: Sept. 2003 Presenter: Professor Jaqueline Pels
Strategic Marketing Management Process
3 key areas:
Strategic analysis
Strategic choice
Strategic implementation
MScIM Intensive Seminars Programme: Sept. 2003 Presenter: Professor Jaqueline Pels
Elements of Strategic Management
Strategicanalysis
Strategicchoice
Strategicimplementation
Expectations,Objectives
ResourcesThe
environment
Selectionof
strategy
EvaluationOf
options
GenerationOf
options
Organisationstructure
Resourceplanning
PeopleAnd
systems
MScIM Intensive Seminars Programme: Sept. 2003 Presenter: Professor Jaqueline Pels
DEBATE:
Strategic versus operative decisions
MScIM Intensive Seminars Programme: Sept. 2003 Presenter: Professor Jaqueline Pels
Strategic Analysis
External Environmental Appraisal:
Development of
Environmental Impact Matrix
MScIM Intensive Seminars Programme: Sept. 2003 Presenter: Professor Jaqueline Pels
Strategic Analysis:External Environmental Appraisal
1. Macro environmental appraisal: PEST analysis
2. Competitive environmental appraisal: Five forces analysis
3. Identifying competitive position
4. Environmental impact matrix
MScIM Intensive Seminars Programme: Sept. 2003 Presenter: Professor Jaqueline Pels
Strategic Analysis: External Environmental Appraisal
The firm’s external environment consists of all the conditions and forces that affect its strategic options but which are typically beyond its control.
The external environment consists of two interacting segments: Macro environment Competitive environment
MScIM Intensive Seminars Programme: Sept. 2003 Presenter: Professor Jaqueline Pels
Strategic Analysis: External Environmental Appraisal
Opportunities The political / legal, economic, socio-cultural,
technological, events and trends that may significantly benefit the firm in the foreseeable future.
Threats Corresponding trends and events which may
adversely affect the firm’s progress towards achieving its long-term targets and which may even threaten the very existence of the firm.
MScIM Intensive Seminars Programme: Sept. 2003 Presenter: Professor Jaqueline Pels
Macro environment: Political / legal considerations
Government stability / political risk
Government regulation / deregulation
Competition policy, monopolies/mergers legislation
Environmental protection legislation
Taxation policies (personal and corporate)
Employment law, contract law
Government subsidies
Foreign trade regulations
MScIM Intensive Seminars Programme: Sept. 2003 Presenter: Professor Jaqueline Pels
Macro environment: Economic considerations
Stage of business cycle
Interest rates, inflation
Disposable income, distribution of income
Foreign exchange rates, value of currency
Unemployment, availability of skilled labour
Infrastructure
Geographical factors, climate
MScIM Intensive Seminars Programme: Sept. 2003 Presenter: Professor Jaqueline Pels
Macro environment: Socio-cultural factors
Demographics
National / sub-national cultures
Values / attitudes / lifestyles
Buying habits
Attitudes to work and leisure
Levels of literacy and education
MScIM Intensive Seminars Programme: Sept. 2003 Presenter: Professor Jaqueline Pels
Macro environment: Technological considerations
e-business
Information technology / communications
Government spending on R&D
Technological breakthroughs
Speed of technology transfer
Shortening life cycles / obsolescence
Product / process technologies (CAD, CAM)
MScIM Intensive Seminars Programme: Sept. 2003 Presenter: Professor Jaqueline Pels
DEBATE:
Chose a firm and a country and conduct a brief PEST analysis
MScIM Intensive Seminars Programme: Sept. 2003 Presenter: Professor Jaqueline Pels
Strategic Analysis: External Environmental Appraisal
Competitive environment Competitors Suppliers Buyers / customers Potential substitutes Potential new entrants to the industry
MScIM Intensive Seminars Programme: Sept. 2003 Presenter: Professor Jaqueline Pels
Five forces model
POTENTIAL ENTRANTS
BUYERSSUPPLIERS
SUBSTITUTES
Competitive rivalry
Bargaining power
Threat of substitutes
Bargaining power
Threat of entrants
MScIM Intensive Seminars Programme: Sept. 2003 Presenter: Professor Jaqueline Pels
Competitor analysis
Types of questions to address:
1. Who are the competitors now; who will be our competitors in the future?
2. What are competitors’ objectives and strategies?
3. How important is each market segment to each competitor; level of commitment?
4. What are competitors’ relative strengths and limitations?
MScIM Intensive Seminars Programme: Sept. 2003 Presenter: Professor Jaqueline Pels
Competitor analysis
5. What weaknesses make the competition vulnerable?
6. Future strategies of competitors?
7. So what? What will the effects be of existing and potential competitors’ strategies on industry dynamics, the market, and our strategy?
MScIM Intensive Seminars Programme: Sept. 2003 Presenter: Professor Jaqueline Pels
Strategic Analysis: External Environmental Appraisal
The results of macro and competitive environmental analysis should be summarised in an environmental impact matrix to highlight significant opportunities and threats.
MScIM Intensive Seminars Programme: Sept. 2003 Presenter: Professor Jaqueline Pels
Environmental Impact Matrix:Macro Environment
Factor
Impact of Factor
Potential Opportunity or
Threat Political / legal Deregulation Threat
Economic Recession in key overseas markets
Threat
Technological Little innovation likely from competitors
Neutral impact
Socio-cultural Increased awareness of environmental protection issues
Significant opportunity
MScIM Intensive Seminars Programme: Sept. 2003 Presenter: Professor Jaqueline Pels
Environmental Impact Matrix:Competitive Environment
Factor Impact of factorPotential
opportunity orthreat
Competition Intense rivalry inindustry/marketplace
Critical threat
Buyers Convergence ofcustomerrequirementsworldwide
Significantopportunity
Suppliers Few suppliersdominate industry Critical threat
Threat of newentrants
Industry barriersto entry are low Threat
MScIM Intensive Seminars Programme: Sept. 2003 Presenter: Professor Jaqueline Pels
DEBATE:
Analise the Nestle case using an Environmental Impact Matrix