topic 2 corporate strategy
TRANSCRIPT
Topic 2
Corporate Strategy
Corporate Strategy• Long term aims and objectives of a company
and ways of achieving them by allocation of resources
• The overall plan that integrates the strategies of all the businesses within the corporation. It usually describes the overall mission, the financial and human resource strategies and policies that affect all businesses within the corporation, the organization structure, the management of the interdependencies among businesses, and major initiatives to change ...
Product Champion• A person who takes an inordinate interest
in seeing that a particular process or product is fully developed and marketed
• The role varies from situations calling for little more than stimulating awareness of the item to extreme cases in which the champion tries to force the item past the strongly entrenched internal resistance of company policy or that of objecting parties
Pioneering• Pioneering means being ahead of the
competitors by introducing a new product first. It is the most risky (costly) strategy but one with the potential for the largest gains
• A pioneering company requires a strong research and development (R&D) capability, which is expensive
• A pioneering company needs to be financially secure and requires product champions to push new ideas
• Consider the Sony or Apple companies and their various pioneering developments
• Good market research can offset some risk, but is problematic for novel products.
Pioneering
• New products: • The mini• Sinclair zx spectrum• Walkman• Discman• Ipod• Blackberry
Imitative• An imitative strategy relies on the designs
of other companies in creating its designs • The imitative company also may base its
accompanying product marketing strategy on the strategy of the market leader or pioneer
• Imitative strategies frequently are used in the fashion goods, furniture, entertainment, and food products industries.
Imitative• Any product released by a
competitor: reverse engineering
• I-phone• Clone IBM pc’s• Mp3 players• A Class Mercedez Benz• mini MPV other
manufacturers
Hybrid Strategy• Companies that use a mixture of imitative
and innovative strategies in order to maximize profit and sales and results in a quick turn around, and the benefits are there will be less disruption within the company should something go wrong
• That is hybrid strategies are an optimal solution for expanding these sales volumes
Hybrid Strategy• Innovations that are neither uniquely services
nor uniquely goods• “the exploitation of an idea that combines
good(s) and service(s), creating more customer benefits than if the good(s) and service(s) were available separately” (Shankar, Berry, and Dotzel)
• The advantage of hybrid innovations is that, as compared to goods, the number of units that must be sold before the unit price exceeds the total unit cost is decreased, while compared to services overall margins are wider thus creating a larger “sweet spot zone”.
Market Penetration• These are either proactive moves designed to
identify and target changing customer requirements, or reactive moves for market defense triggered by competitive actions
• A move by management to increase its market share held by current products in currently serviced markets.
• Market share may be increased by some combination of 1. attracting users of competitive brands2. persuading current users to increase usage3. attracting nonusers of the product category
Market Development• The expansion of the total market
served by a business, achieved by 1. Entering new segments-by expanding the
geographic base of the business ...2. Conversion of nonusers-by lower prices or
increased (or specially designed) promotion3. Increasing usage by present users-by
developing and promoting new uses for the product
4. For example, the videotext market is in the market crystallization phase. It appears to have some market benefits, but those benefits have not been fully developed
Task – Victorinox• Examine the corporate strategies
used:
Traditional Innovative
Task - Nylon
Product Development• One example of how a company
undertakes product development by considering the addition of variations to a product to develop a range of products building on an established brand, for example, ice cream, snack food products, chocolate products (Kit Kat, Mars bars).
Task - Kit Kat• How many variations can you find on the
basic Kit Kat chocolate bar?
Diversification• Involves a company both in the
development of new products and in the selling of those products to new companies
• For example: A company manufacturing three-pin electrical plugs may consider producing them in a range of colours or from materials of different textures and/or material properties
Market Sector• A broad way of categorizing the kinds of
market the company is aiming for• For Example: Non alcoholic beverages ref: World Market of Soft Drinks
2005…
Market Segment• Markets divided up into smaller
segments where the purchasers have similar characteristics and tastes
• Examples of ways in which markets may be segmented are:• Consider income, age, lifestyle,
geographical location, and so on
Market Segment
Robust Design• Flexible designs that can be adapted to
changing technical market requirements• Robust designs can evolve into product
families• An example would be a mobile phone
where its form has evolved over a period of time yet the majority or components have stayed the same.
Example of Robust Design
Product Family• A group of products having common
classification criteria. • Members normally have many common
parts and assemblies
Task• Find examples of robust design that
has evolved into a product family• http://www.onesixsigma.com/article/
applying-design-for-six-sigma
Links• http://www.marketingpower.com• http://www.onesixsigma.com/article/applying-design-for-six-
sigma• http://www.businessstudiesonline.co.uk• http://www.packagingtoday.com/intronylon.htm• http://www.accenture.com/NR/rdonlyres/23C157D5-01E2-
493A-91C7-02EA290CB15D/0/10Sectors.gif• http://www.market-modelling.co.uk/MMS/
MMS_Segment.htm• http://www.kitkat.com/about_kitkat• http://www.snogear.com/coldwavesnoicegloves.htm• http://www2.dupont.com/DuPont_Home/en_US/