Professor Jaqueline Pels University of Torcuato Di Tella: Strategic Marketing Management

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 Graduate students come Postgraduate students

typically employ simplistic to appreciate that much come to accpept that
right-wrong positions in knowledge is unknown and knowledge is complex and
which “the truth” exists that a process of contextual so that no
discovery exists to absolute truth exists;
complete “truth”. right and wrong only make
sense within specified
contexts
Role of the lecturer To impart knowledge to To direct students along The lecturer now becomes
passive students. the path of discovery. source of expertise
guiding students.
Type of learning Basic information Students learn how to Students know that they
acquisition is the aim. learn must exercise judgement,
in doing so modifying and
expanding knowledge.
Role of Student Students peers are seen Students peers, aid the Other students become
peers as not offering legitimate search for truth, helping sources of learning and
authorities of knowledge. in the distinguishing diverse opinions, ideas and
between the multiple information
perspectives that are now
recognized to exist.
-ENVIRONMENTAL ANALYSIS-
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.
• 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.
• 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.
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.
3 levels of strategy:
• Corporate level
• Business unit level
• Functional / operational level
3 levels of strategy: the role of marketing
Corporate strategy
Strategic Marketing
Management
Business 1 Business 2 Business 3 Business 4
Production Finance & Human

R&D Marketing
& sourcing accounting resources
Marketing Management
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.
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.
Strategic Marketing Management Process
3 key areas:
Strategic analysis
Strategic choice
Strategic implementation
Elements of Strategic Management
Expectations,
Objectives
The
Resources
environment
Strategic
analysis
Generation
Resource
Of
planning
options
Strategic Strategic
choice implementation
Evaluation
Of
Organisation
options
structure
Selection
People
of
And
strategy
systems
DEBATE:
Strategic versus operative decisions
Strategic Analysis
External Environmental
Appraisal:
Development of
Environmental Impact Matrix
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
Strategic Analysis:
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
Strategic Analysis:
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.
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
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
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
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)
DEBATE:
Chose a firm and a country and
conduct a brief PEST analysis
Strategic Analysis:
Competitive environment
 Competitors
 Suppliers
 Buyers / customers
 Potential substitutes
 Potential new entrants to the industry
Five forces model
POTENTIAL ENTRANTS
Threat of entrants
SUPPLIERS Competitive BUYERS

rivalry
Bargaining power Bargaining power
Threat of substitutes
SUBSTITUTES
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?
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?
Strategic Analysis:
The results of macro and

competitive environmental
analysis should be
summarised in an
environmental impact
matrix to highlight
significant opportunities and
threats.
Environmental Impact Matrix:
Macro Environment
Potential
Factor Impact of Factor Opportunity or
Threat
Political / legal Deregulation Threat
Economic Recession in key

overseas markets Threat
Technological Little innovation

likely from Neutral impact
competitors
Socio-cultural Increased
awareness of Significant
environmental opportunity
protection issues
Environmental Impact Matrix:
Competitive Environment
Potential
Factor Impact of factor opportunity or
threat
Competition Intense rivalry in
industry/market Critical threat
place
Buyers Convergence of
customer Significant
requirements opportunity
worldwide
Suppliers Few suppliers
dominate industry Critical threat
Threat of new Industry barriers
entrants to entry are low Threat
DEBATE:
Analise the Nestle case using an
Environmental Impact Matrix

Professor Jaqueline Pels University of Torcuato Di Tella: Strategic Marketing Management

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Professor Jaqueline Pels University of Torcuato Di Tella: Strategic Marketing Management

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Strategic Marketing Management

Professor Jaqueline Pels

Learning outcome Undergrad students Graduate students come Postgraduate students

International marketer’s task is to:

• Strategic decisions have

The practices and principles of

Business 1 Business 2 Business 3 Business 4

Production Finance & Human

The ultimate aim of strategic

1. Macro environmental appraisal:

The firm’s external environment consists

Stage of business cycle

SUPPLIERS Competitive BUYERS

1. Who are the competitors now; who will

5. What weaknesses make the

The results of macro and

Economic Recession in key

Technological Little innovation

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