Download Strategic Marketing, 3 rd edition

West, Ford, & Ibrahim
Strategic Marketing, 3rd edition
Chapter 4: Strategic marketing
decisions, choices, and mistakes
© Douglas West, John Ford, and Essam Ibrahim, 2015. All rights reserved.
Structure
A. INTRODUCTION
1. Overview and Strategy Blueprint
2. Marketing Strategy: Analysis &
Perspectives
B. WHERE ARE WE NOW?
3. Environmental & Internal Analysis:
Market Information & Intelligence
E. DID WE GET THERE?
14. Strategy Implementation, Control
& Metrics
West, Ford, & Ibrahim: Strategic Marketing, 3rd edition
C. WHERE DO WE WANT TO BE?
4. Strategic Marketing Decisions,
Choices & Mistakes
5. Segmentation, Targeting
& Positioning Strategies
6. Branding Strategies
7. Relational & Sustainability
Strategies
D. HOW WILL WE GET THERE?
8. Product Innovation & Development
Strategies
9. Service Marketing Strategies
10. Pricing & Distribution Strategies
11. Marketing Communications Strategies
12. International Marketing Strategies
13. Social and Ethical Strategies
Learning Objectives
 To define ‘strategic choice’
 To outline strategic decisions taken at the corporate,
SBU and functional levels
 To review the strategic marketing decisions including
products to offer, markets to target and competitive
position strategies
 To review the analytical models and frameworks that
can be used by organisations to make their strategic
choices for the future
West, Ford, & Ibrahim: Strategic Marketing, 3rd edition
Strategic choice involves generating a welljustified set of interrelated strategic alternatives
and choose from them the ones that will
contribute to the achievement of the corporate
overall goals and strategic objectives
West, Ford, & Ibrahim: Strategic Marketing, 3rd edition
Where do we want to be?
Strategic Decisions
 Strategic decisions at corporate level
 Mission statement,
 Directional strategy (Growth, Stability, Retrenchment)
 Resource allocation
 Strategic decisions at SBU level
 Choosing Generic Strategy; cost leadership,
differentiation & focus
 Marketing-related strategic decisions
 Products to offer
 Market segments to target
 Positioning strategy
 Competitive stance to take
West, Ford, & Ibrahim: Strategic Marketing, 3rd edition
Directional (grand) strategies
Growth Strategies Stability Strategies
Retrenchment strategies
Concentration
Turnaround
Captive Company
Sell-Out/Divestment
Bankruptcy/Liquidation
Vertical Growth
Horizontal Growth
Pause/Proceed with
Caution
No Change
Profit
Diversification
Concentric
Conglomerate
West, Ford, & Ibrahim: Strategic Marketing, 3rd edition
Resource allocation: BCG matrix
West, Ford, & Ibrahim: Strategic Marketing, 3rd edition
General electric model
Strong
Business Position
Medium
Weak
Industry Attractiveness
High
Medium
Low
Most attractive: Investment for Growth
Least attractive: Harvesting/Divesting
West, Ford, & Ibrahim: Strategic Marketing, 3rd edition
Medium attractiveness: Selectivity
Porter’s generic strategies
STRATEGIC TARGET
COMPETITIVE ADVANTAGE
Uniqueness perceived
Low cost
by customer
position
Industry
-wide
Specific
segment
Differentiation
Cost
Leadership
Differentiation
focus
Cost focus
West, Ford, & Ibrahim: Strategic Marketing, 3rd edition
Bowman's strategy clock
West, Ford, & Ibrahim: Strategic Marketing, 3rd edition
New
Market
Existing
Market
Ansoff’s product/market matrix
Present Products
New Products
Penetration Strategy
Product Development
Strategy
•Increase share of customer
spending
• Increase market share
• Non-users to users (where
both are in the same segment)
Market Development
Strategy
•New markets
• New distribution channels
• New geographical areas
West, Ford, & Ibrahim: Strategic Marketing, 3rd edition
•Product modification via new
features
• Different quality levels
• New Product(s)
Diversification
Strategy
•Joint ventures
• Mergers
• Acquisitions/takeovers
Competitive position tactics
West, Ford, & Ibrahim: Strategic Marketing, 3rd edition
Strategic advice to managers to avoid failure
Strategic Elements
Poor strategy
performance
Taking strategic actions
statement
Addressing key
stakeholders
Industry dynamics
Resources
Strategic capabilities
Core competences
Domain selection
Implementation
What to do:
Do not confuse a sustained decline with a brief hiccup or a series of hiccups. This delineation is
critical: if confusion leads to oversight or inaction on your part, it may lead to your firm’s
eventual death. Recognise a decline early and that there are elements of the firm’s strategy that
must be changed.
Be serious and judicious in understanding the situation you are up against and prioritise actions
and execute your strategies accordingly.
Know what your firm is all about: what basic customer needs your firm can serve well; the
products you sell; the customers and market segments you serve. Develop a clear identity that
sends a clear signal to customers.
Listen carefully to key stakeholders. Ask for their input and all-out support and mobilize them to
rally around your firm’s chosen course of action.
Be careful about ambiguous and incomplete environmental data, as they might lead to incorrect
interpretation of the industry dynamics. Because of constantly evolving industry dynamics, an
incorrect reading does not let you manoeuvre the external forces well; rather it serves as a booby
trap.
Be steadfast and decisive in the acquisition and use funds needed to make the correct change in a
timely fashion. The same change might need far more resources later, or the opportunity to
change might have been lost for good.
Have marketing to connect with what customers want and the financial acumen to fund needed
changes.
Make a dedicated effort to exploit where the firm can add value with rare, hard to imitate
activities.
Be familiar with your industry’s domain without defining it too broadly. Be ready to quickly
adjust your domain along with changes in customer needs. Do not stick to domains that have
recently seen limited success.
Coordinate implementation of strategy elements to work together in an effective, decisive, and
timely way.
West, Ford, & Ibrahim: Strategic Marketing, 3rd edition
Conclusion
• Strategic choice involves understanding the underlying bases guiding
future strategy, and generating strategic options for evaluation and
selecting from among them.
• Strategic decisions are usually taken at corporate level (e.g.,
directional strategy, resource allocation), at SBU level (e.g., generic
strategy), and at functional level in relation to various functional areas
(e.g., marketing, R&D, finance, HR, production, etc.).
• Strategic marketing decisions include products to offer, market
segments to target, and positioning strategies.
• Organisational failure is arguably a product of repeated strategic
mistakes and unsuccessful interactions between the firm and its
environment.
West, Ford, & Ibrahim: Strategic Marketing, 3rd edition