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34 Cards in this Set
- Front
- Back
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Market Entry and Exit Decisions -- First-Mover
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Entering market first; market pioneer
(when is a good time to enter market?) |
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Market Entry and Exit Decisions -- Advantages
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Technological leadership from learning curve
Capture scarce assets: Distribution channels, Employees, .. Switching costs: Barrier for company to change software |
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Market Entry and Exit Decisions -- Example
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Examine market share after one year
ORNPs: Original New Products (brand new bb -- takes a long time to get mrkt share) RFNPs: Reformulated New Products - (new version of exisiting product -- mrkt will respond as soon as launched) |
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Market Entry Decision Analysis -- Structuring
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Structuring the problem
Define objectives -- (what must we do?) Specify measures of effectiveness Identify restrictions on action—What must we NOT do? |
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Market Entry Decision Analysis -- Probabilities
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Assign probabilities to possible consequences
Subjective, or based on past results |
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Market Entry Decision Analysis -- Payoffs
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Assign payoffs to consequences
Explicitly includes preferences for possible outcomes |
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Market Entry Decision Analysis -- Analyzing
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Analyzing the problem
Decision tree can be used |
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Market Entry Decision Analysis -- Decision Tree
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TREEAGE software included in Marketing Engineering CD
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Shared-Experience Models: The PIMS Approach -- PIMS
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Profit Impact of Market(ing) Strategy
(benchmarking strategy, share knowledge and experience) |
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Shared-Experience Models: The PIMS Approach -- Origin
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1960 at General Electric
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Shared-Experience Models: The PIMS Approach -- Goal
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Pool experiences of different strategic business units (SBUs)
Gain insight on how to achieve profitability |
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Shared-Experience Models: The PIMS Approach -- Size
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1980s: 100 data items, 450 firms, 3000 businesses
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PIMS Approach: Principles for High Profitability -- Market Characteristics
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Growing market
Early life cycle High inflation Few suppliers Small purchase levels Low unionization High exports/ Low imports (companies that have these usually do well, so they look at these factors) |
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PIMS Approach: Principles for High Profitability -- Strategic Factors
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High market share
Low relative costs High perceived quality Low capital intensity Intermediate level of vertical integration (companies that have these usually do well, so they look at these factors) |
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PIMS: Example Limited Information Report -- what is it and disadvantage
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ranks biz against winners and loosers based on certain criteria
(Very short term results, what are you results this quarter) can also show positive things like high R&D as a negative factor look at slide 9 for more detail |
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Product Portfolio Models: BCG -- Vertical
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Market Growth Rate, 10% Reference
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Product Portfolio Models: BCG -- Horizontal
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Share relative to industry’s largest competitor
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Product Portfolio Models: BCG -- Circles
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Size of circles proportional to SBU dollar sales
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Product Portfolio Models: BCG -- Stars
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High-growth, High-share; Need cash to grow (ex IPAD ... using cash from IPOD to fund IPAD)
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Product Portfolio Models: BCG -- Cash Cows
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Low-growth, High-share; Supports company (IPOD)
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Product Portfolio Models: BCG -- Question Marks
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High-growth, Low-share; Need cash, but worth the risk? (new apple laptops)
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Product Portfolio Models: BCG -- Dogs
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Low-growth, Low-share; Liquidate, use funds elsewhere (Rio MP3 player)
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Product Portfolio Models: BCG -- critique
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too simplistic
slide 10 |
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Product Portfolio Models: GE/McKinsey -- Industry Attractiveness
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Weighted factors:
Market size, Growth rate, Competitive intensity |
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Product Portfolio Models: GE/McKinsey -- description
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Multi-Factor Portfolio Matrix
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Product Portfolio Models: GE/McKinsey -- Business Strength
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Weighted factors:
Market share, Share growth, Product quality |
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Product Portfolio Models: GE/McKinsey -- Strategy
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Use matrix to drive strategy (GE would only invest in things that they are both good and and attractive industries, thus the wide range of GE buisiness lines)
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Product Portfolio Models: Analytic Hierarchy -- AHP
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Analytic Hierarchy Process
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Product Portfolio Models: Analytic Hierarchy -- Use
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Complex **non-numerical** ((would not do this for MPG)) issues -> Strategic decisions
(compare alternatives based on user judgement of various vactors and come to a conclusion for best option based on pairwise comparison of the various criteria) |
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Product Portfolio Models: Analytic Hierarchy -- Process
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See example on next few slides (13,14,15,16): Buying a new car
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Competition -- Models
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Dont include directly in model
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Competition -- Reaction Matrix
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Calculate elasticities E(1), etc. based on behavior
Firm 2 responds to price drop of Firm 1 Reaction of Firm 2 lags Firm 1; complex |
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Competition -- Sales vs. Market Share
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Share Effect: Gain sales by increasing market share
Size Effect: Gain sales through growing market (IPAD made mrkt share grow) Direct Effect: Initial action by firm |
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Competition -- Competitive-Response -- (CR) Effect
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Firm 2 responds to Firm 1’s ads by incr. its own ads
CR_Effect(Share): Firm 2’s ads causes its share to grow CR_Effect(Size): More ads causes market to grow |
