pel presentation

MScIM Intensive Seminars Programme: Sept. 2003 Presenter: Professor Jaqueline Pels

Strategic Marketing Management

Professor Jaqueline Pels

University of Torcuato Di Tella


Type A Type B Type C

Learning outcome Undergrad students typically employ simplistic right-wrong positions in which “the truth” exists

Graduate students come to appreciate that much knowledge is unknown and that a process of discovery exists to complete “truth”.

Postgraduate students come to accpept that knowledge is complex and contextual so that no absolute truth exists; right and wrong only make sense within specified contexts

Role of the lecturer

To impart knowledge to passive students.

To direct students along the path of discovery.

The lecturer now becomes source of expertise guiding students.

Type of learning Basic information acquisition is the aim.

Students learn how to learn

Students know that they must exercise judgement, in doing so modifying and expanding knowledge.

Role of Student peers

Students peers are seen as not offering legitimate authorities of knowledge.

Students peers, aid the search for truth, helping in the distinguishing between the multiple perspectives that are now recognized to exist.

Other students become sources of learning and diverse opinions, ideas and information



-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

Strategic MarketingManagement

Marketing Management

Business 1

R&DProduction

& sourcing

Finance &

accountingMarketing

Human

resources

Business 2 Business 3 Business 4

Corporate strategy


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

Strategicanalysis

Strategicchoice

Strategicimplementation

Expectations,Objectives

ResourcesThe

environment

Selectionof

strategy

EvaluationOf

options

GenerationOf

options

Organisationstructure

Resourceplanning

PeopleAnd

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: External Environmental Appraisal

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



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



Competitive environment Competitors Suppliers Buyers / customers Potential substitutes Potential new entrants to the industry


Five forces model

POTENTIAL ENTRANTS

BUYERSSUPPLIERS

SUBSTITUTES

Competitive rivalry

Bargaining power

Threat of substitutes

Bargaining power

Threat of entrants


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?



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

Factor

Impact of Factor

Potential Opportunity or

Threat Political / legal Deregulation Threat

Economic Recession in key overseas markets

Threat

Technological Little innovation likely from competitors

Neutral impact

Socio-cultural Increased awareness of environmental protection issues

Significant opportunity


Environmental Impact Matrix:Competitive Environment

Factor Impact of factorPotential

opportunity orthreat

Competition Intense rivalry inindustry/marketplace

Critical threat

Buyers Convergence ofcustomerrequirementsworldwide

Significantopportunity

Suppliers Few suppliersdominate industry Critical threat

Threat of newentrants

Industry barriersto entry are low Threat


DEBATE:

Analise the Nestle case using an Environmental Impact Matrix

pel presentation

Documents

integration of strategic

strategic framework

direct students

passive students

type cpostgraduate students

type bgraduate students

terms of business areas

levels of strategy