Marketing Strategy: A Decision-Focused Approach Chapter 2

Front 1

Guides an organization's managers as to which market opportunities to pursue and which fall outside the firm's strategic domain.

Back 1

Mission

Front 2

It can help instill a shared sense of direction, relevance, and achievement among employees, as well as a positive image of the firm among customer,s investors, and other stakeholders.

Back 2

Mission

Front 3

It answers to:
1. What is our business?
2. Who are our customers?
3. What kinds of value can we provide to these customers?
4. What should our business be in the future?

Back 3

Mission

Front 4

The firm's mission should be compatible with (3):

Back 4

1. Values
2. Resources
3. Distinctive competencies

Front 5

The firm's mission should focus on markets that (3):

Back 5

1. Generate value to customers
2. Advantage over competitors
3. Synergy across its products

Front 6

1. Customer needs to be satisfied
2. Functions that must be performed to satisfy the needs and the products on technologies in which to concentrate
3. Ethics

Back 6

Things that a firm's mission should focus on.

Front 7

They provide decision criteria that guide an organization's business units and employees toward specific dimensions and performance levels.

Back 7

Objectives

Front 8

Objectives should be (2):

Back 8

1. measurable and 2. specific

Front 9

1. Performance dimension or attribute sought
2. Measure or index for evaluating progress
3. Target or hurdle level to be achieved
4. Time frame within which the target is to be accomplished

Back 9

Components of objectives

Front 10

1. Specific
2. Measurable
3. Attainable
4. Relevant
5. Time-bound

Back 10

SMART

Front 11

What are the ultimate objectives of a company (2)?

Back 11

1. Enhancing shareholder value (expressed in MVA)
2. Enhancing customer value

Front 12

1. Prioritizing objectives
2. Constraint of hurdle
3. Trade-off

Back 12

Are the marketing implications of corporate objectives. (3)

Front 13

It is based on company resources, resources that other firms do not have, that take a long time to develop, and that are hard to acquire.

Back 13

Sustainable Competitive Advantage

Front 14

1. Expansion of its current business activities
2. Diversification into new business through internal business development or acquisition
3. Expansion by diversifying through organizational relationships or networks

Back 14

Growth Strategies (3)

Front 15

1. By increasing penetration of current product-markets
2. By developing new products for current customers
3. By selling existing products to new segments or countries

Back 15

Expansion of a business' current activities. (3)

Front 16

1. Vertical Integration (forward & backward)
2. Related (or concentric) diversification
3. Unrelated (or conglomerate) diversification

Back 16

Diversification into new business through internal business development or acquisition (3).

Front 17

Analytical tools for deciding about how to allocate financial and human resources across the firm's various business and product-markets.

Back 17

Allocating Corporate Resources.

Front 18

1. Portfolio Models
2. Value-based planning

Back 18

Analytical tools for allocating corporate resources (2).

Front 19

Enable managers to classify and review their current and prospective business by viewing them as portfolios of investment opportunities and then evaluating each business's competitive strength and the attractiveness of the markets it serves.

Back 19

Portfolio Models

Front 20

It analyzes the impact of investing resources in different business on the corporation's future earnings and cash flows.

Back 20

Boston Consulting Group's (BCG) Growth-Share Matrix

Front 21

What does the vertical axis and the horizontal axis of the BCG Growth-Share Matrix indicate?

Back 21

Vertical - Industry's Growth Rate
Horizontal - Relative Market Share

Front 22

Types of business in the BCG Growth-Share Matrix (4).

Back 22

1. Question Marks
2. Stars
3. Cash Cows
4. Dogs

Front 23

Type of business that require large amounts of cash for expansion, to keep up with the market growth, for marketing activities, to build market share and catch the industry leader.

Back 23

Question Mark or Problem Child

Front 24

Type of business with a high relative share of low-growth markets. They are the primary generators of profits and cash in the corporation.

Back 24

Cash cows

Front 25

Type of business that is the market leader in a high-growth industry. Stars are critical to the continued success of the firm.

Back 25

Stars

Front 26

Type of businesses int he low-growth markets that, although they may throw off some cash, they typically generate low profits, or losses.

Back 26

Dogs

Front 27

1. Market growth rate is an inadequate descriptor of overall industry attractiveness
2. Relative market share is inadequate as a description of overall competitive strength
3. The outcomes of a growth-share analysis are highly sensitive to variations in how growth and share are measured
4. While the matrix specifies appropriate investment strategies fot each business, it provides little guidance on how best to implement those strategies
5. The model implicitly assumes that all business units are independent of one another except for the flow of cash.

Back 27

Limitations of the Growth-Share Matrix

Front 28

Is a resource allocation tool that attempts to address such questions by assessing the shareholder value a given strategy is like to create.

Back 28

Value-based planning

Front 29

It assesses the economic value a strategy is likely to produce by examining the cash flows it will generate.

Back 29

Value-based planning

Front 30

It estimates the shareholder value that a strategy will produce by discounting its forecasted cash flows by the business's risk-adjusted cost of capital.

Back 30

Value-based planning

Front 31

They evaluate strategies based on the likelihood that the investments required by a strategy will deliver returns greater than the cost of capital.

Back 31

Value-based planning

Front 32

The amount of return a strategy or operating program generates in excess of the cost of capital.

Back 32

Economic Value Added (EVA)

Front 33

Calculates the economic return for a prospective marketing inititive based on its likely impact on the firm's customer equity, which is the sum of the lifetime values of its current and future customers.

Back 33

Customer Equity to estimate the Value of Alternative Marketing Actions

Front 34

1. Competencies
2. Knowledge
3. Resources
4. Customer Related Intangibles

Back 34

Sources of Synergy (4)

Front 35

1. Brand-name recognition
2. Reputation

Back 35

Customer Related Intangibles (2) as sources of synergy

Front 36

1. The corporate brand name serves as the brand name for most of the firm's products in markets around the globe.
2. Dual branding strategy where each offering carries both, a corporate identifier and an individual product brand
3. Each product offering might be given a unique brand and identity while the identity of the source company is deemphasized or hidden.

Back 36

Corporate identity and the Corporate Brand as sources of Synergy