Professional Documents
Culture Documents
value? How is strategic planning carried out at different levels of the organization? What does a marketing plan include?
3 Vs Approach to Marketing
Define the value segment
Benchmarks
Organizational costs and performance measures Competitor costs and performance measures
Fulfillment management
Define the corporate mission Establish SBUs Assign resources to each SBU Assess growth opportunities
Vertical channels
Customer groups
Customer needs
Technology
FEEDBACK
Operating Strategies
Functional Managers
Functional Strategies
Two-Way Influence
Operating Managers
Operating Strategies
GE / McKinsey Matrix
The GE / McKinsey Matrix is a model to perform a business portfolio analysis on the strategic Business Units of a corporation
A Business Portfolio is the collection of Strategic Business Units that make up a corporation
Analyse its current business portfolio and decide which SBUs should receive more or less investments Develop growth strategies for adding new products and businesses to the portfolio Decide which businesses or products should no longer be retained
BCG Matrix is the best-known portfolio planning framework - the GE / McKinsey Matrix is a later and more advanced form of the BCG Matrix
The GE / McKinsey Matrix is more sophisticated than the BCG Matrix in three aspects: Market / Industry attractiveness replaces market growth as the dimension of industry attractiveness
GE / McKinsey Matrix works with a 3x3 Grid while the BCG Matrix
has only 2x2 Grid (allows for more sophistication)
Strategic Business Units are portrayed as a circle plotted in the GE / Mckinsey Matrix, whereby:
The size of the circles represent the market size The size of the pies represent the market share of the SBUs Arrows represent the direction and the movement of the SBUs in the future
The 7-S framework of McKinsey is a Value Based Management (VBM) model that describes how one can holistically and effectively organize a company. Together these factors determine the way in which a corporation operates.
Shared Value
The interconnecting center of McKinsey's model is: Shared Values. What does the organization stands for and what it believes in - Central beliefs and attitudes.
Strategy
Plans for the allocation of a firms scarce resources, over time, to reach identified goals, Environment, competition, customers
Structure
The way the organization's units relate to each other: centralized, functional divisions (top-down); decentralized (the trend in larger organizations); matrix, network, holding, etc.
System
The procedures, processes and routines that characterize how important work is to be done: financial systems; hiring, promotion and performance appraisal systems; information systems
Staff
Numbers and types of personnel within the organization
Style
Cultural behaviour of the organization and how key managers behave in achieving the organizations goals - Management Styles.
Skills
Distinctive capabilities of personnel or of the organization as a whole - Core Competences.
Grand Strategies
strategies, provide basic direction for strategic actions Indicate the time period over which long-range objectives are to be achieved Any one of these strategies could serve as the basis for achieving the major long-term objectives of a single firm Firms involved with multiple industries, businesses, product lines, or customer groups usually combine several grand strategies
Product Development
Innovation Horizontal Integration Vertical Integration Concentric Diversification Consortia
Divestiture
Liquidation Bankruptcy Joint Ventures Strategic Alliances
Differentiation
Focus
-Were initially used in early 1980s and seem to be popular even today. -They outline the three main strategic options open to organization that wish to achieve a sustainable competitive advantage
Cost Leadership
The low cost leader in any market gains competetive
advantage from being able to produce at the lowest cost. No Frills Cost is driven down through all the elements of the Value Chain
Differentiation
D means providing something unique that is valuable
to the buyer beyond simply offering a low price..Porter Differentiated goods & services satisfy the needs of customers through a sustainable competitive advantage. This allows companies to desensitize price and focus on value that generates a comparatively higher price and a better margin
Differentiation
Incurs additional cost in creating competitive
advantage Could be copies by competitors Key to Successful Differentiation Understanding customer needs & preferences Commitment to customers Knowledge of companys capabilities innovation
Intangible
Subjective Related to image &
Materials
Performance Packaging
Complementary services
Pitfalls
Uniqueness that is not valuable
Too much differentiation Too high a premium price Easy imitation Dilution of brand Different perceptions
Characteristics of SBUs
It is a single business or collection of related businesses
Integrative growth
Backward Integration Forward Integration Horizontal Integration
businesses
SWOT Analysis
Strengths Weaknesses Opportunities Threats
Opportunity Matrix
Threat Matrix
Logistics Alliances
Pricing Collaborations