university of washington emba program regional 20 marketing management “identifying opportunities...
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University of Washington EMBA ProgramRegional 20
Marketing Management
“Identifying Opportunities in the Marketplace”
Instructor: Elizabeth Stearns
Mission• Definition:
– A description of the business we are in, or should be in, codifying what a firm does well or wishes to do.
– Used to guide strategy development
• Needs to be supported by resources to accomplish the mission
• Marketers should avoid statements that are too narrow or too broad.
Mission• Examples:
– Otis Elevator
•To provide any consumer a means of moving people and things up, down, and sideways over short distances with higher reliability than any similar enterprise in the world.
Mission
–Courtyard by Marriott•To provide economy, and quality-minded frequent business travelers with a premier, moderate-priced lodging facility which is consistently perceived as clean, comfortable, well maintained and attractive, staffed by friendly, attentive and efficient people.
Mission Statements
Co. Key Market Contribution Distinction
Otis To provide any a means of moving with higher
consumer people and things reliability
up, down, and than any
sideways over similar
short distances enterprise in the world
Mission Statements
Co. Key Market Contribution Distinction
??? To offer the fast food prepared in the delivered in
food customer same high quality a consistent
manner world-wide, low-key
tasty and reasonably decor
priced and friendly
atmosphere
Mission
Alternative bases
Natural Resource
Market orMarket Segment
Product/Service
Technology
Needs to beSatisfied
Choosing Among Market Opportunities
• Financial Analysis
– Payback
– ROI (Return on Investment)
– ROE (Return on Equity)
– IRR (Internal Rate of Return)
– NPV (Net Present Value)
– Risk Analysis
Choosing Among Market Opportunities
• Strategic Analysis
– Growth Path
– Portfolio Approaches
• Growth Share Matrix (BCG)
• Multiple Criteria (GE/McKinsey Screen)
Strategic Analysis
• Considerations for analysis: multi-level– Business– Product/Market Segment
• Portfolio Analysis: key dimensions– Market Attractiveness– Business Strengths
Strategic Focus
In cre ase S a lesV o lu m e (u n its)
fro m cus to m e rs
C h an geS a le s M ix
Im p roveP rice
R e du ceC o s ts
R e du ceIn v es tm e nt
Im p roveE ffic ien cy
R O I
Growth Profits
Three Intensive Growth Strategies: Ansoff’s Product/Market Expansion Grid
4. Diversification2. Marketdevelopment
Newmarkets
1. Marketpenetration
Existingmarkets
Existingproducts
3. Productdevelopment
Newproducts
©2000 Prentice Hall
Growth Path Analysis
Products/Technologies
Existing
Customers
Related
New
Existing Related New
Risk
Growth Path Analysis
Products/Technologies
Existing
Customers
Related
New
Existing Related NewRisk
Market Penetration
Product Extension
ConglomerationDiversification
ProductExpansion
MarketExtension
BusinessExtension
BusinessExpansion
Market Expansion
BusinessExpansion
The Boston Consulting Group’s Growth-Share Matrix
20%-20%-18%-18%-16%-16%-14%-14%-12%-12%-10%-10%- 8%-8%- 6%-6%- 4%-4%- 2%-2%- 00L
on
g t
erm
Mar
ke
t G
row
th R
ate
3 ?Question marks
? ??21
Cash cow
6
Dogs
8
710x 4x 2x 1.5x 1x 10x 4x 2x 1.5x 1x
Relative Market Share.5x .4x .3x .2x .1x .5x .4x .3x .2x .1x
Stars
5
4
©2000 Prentice Hall
$ Cash cow Dogs
Problem Children
Stars
Barnyard!
ProfitableHigh Risk
(Customers, Competitors, Technology)
High Investment
Cash Outflows D C
A B
$
High Investment
Frequent Losses
Heavy Cash Outflows
High Risk (Customers, Competitors, Technology)
Low Cost Supplier
Price Premium
High Profits
Relatively Low Investment
High Potential Cash Generation
Low Risk
High Cost
Supplier
Focus of Top Management
Attention
High Managerial Turnover
Lower Profits and Cash
Generation
High Low
Relative Market Share
Long High
RunMarketGrowthRate
Low
The Growth/Share Matrix (BCG)
Developing the Multiple Criteria Matrix
1000High
700
Medium400
Low100
1000 700 400 100 High Medium Low
Business Strengths
Mar
ket
Att
ract
iven
ess
Developing the Multiple Criteria Matrix
GoGo
Go
?
?
Stop
?
Stop
Stop
1000High
700
Medium400
Low100
1000 700 400 100 High Medium Low
Business Strengths
Mar
ket
Att
ract
iven
ess
Market Attractiveness• Given our history, objectives, culture, management style,
successes and failures, we like to be in markets where:
• Examples:
– Profit margins are high
– Exchange rates are stable
– There are few competitors
– Barriers to exit are low
– Government Regulations are Extensive
– The workforce is non-unionized
- Market size is small
- Market growth is high
- Payback period is short
Market Attractiveness Analysis Factor Weight (to firm) Rating (to opportunity) Total Group (must = 100) (1-10) (WxR=T)
1.2.3.4.5.6.7.8.
---------- ---------- 100 Total
======
Business Strengths• To be successful in this market, any competitor must
possess:
• Examples:
– Low cost operations
– Consumer marketing skills
– Established distribution facilities
– Deep pockets
– Ability to innovate new products
– Effective information systems
– A strong sales force
– Commitment to R&D
Business Strengths (required to be successful) Factor Weight (any competitor) Rating (of firm) Total Group (must = 100) (1-10) (WxR=T)
1.2.3.4.5.6.7.8.
---------- ---------- 100 Total
======
Developing the Multiple Criteria Matrix
1000High
700
Medium400
Low100
1000 700 400 100 High Medium Low
Business Strengths
Mar
ket
Att
ract
iven
ess
Thank You!