1. The document discusses key elements of a strategic plan including determining the product market, level of commitment to resources, and objectives and plans for each functional area. 2. It also outlines the strategic planning process including collecting data, analyzing the situation, developing objectives and strategies, and measuring progress toward goals. 3. Finally, it provides examples of strategic planning tools like the wants-gets grid, conceptual map, value chain analysis, five forces of competition, and requisites for a learning organization.

1. 6-1

2. Chapter Six
Market Strategy
McGraw-Hill/Irwin Copyright © 2006 The McGraw-Hill Companies, Inc. All rights reserved.

3. CRITICAL ELEMENTS IN A STRATEGIC PLAN
Determining the (What markets do we
1 product market serve with what
to serve products)
Determining the (What level of
2
level of commitment investment in the
to provide resources product market are
we willing to make)
Determining the (What are the
3 objectives and plans detailed aims and
for each functional action plans)
area
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4. STRATEGY PROCESS
Update
MODEL
historical data
Collect current
situation data
Data analysis
Develop objectives,
strategies programs
Develop financial
documents
Negotiate final plan
Measure progress
toward objectives
Audit 6-4

5. 1. Define 2. Develop 3. Define 4. Define Strategic
Track 1 mission statement of vision goals planning
operating foundation
principles and
values
Environmental scanning Strategy development
5. Define planning 6. Define 7. Define 8. Select Business
Track 2 assumptions & total leadership segments strategy
implications: market & requirements, and define
Develop consensus most assess long-term corporate
re: environment attractive strengths & & segment
(customer/market, segments weaknesses in strategy
competition, attractive
suppliers, etc.) segments
Gap analysis Strategy integration and capability development
9. Define capability 10. Formulate 11. Appraise, 12. Modify goals Strategy
Track 3 gaps by assessing strategies test & if required, integration
strengths/ that yield reconcile set capability
weaknesses against competitive strategy functional development
current capabilities advantage with and
& specific
functional business
competitors in
selected segments plans/ objectives
needs
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6. WANTS-GETS GRID
HIGH PERFORMANCE
Assistance
Consistent product
in cost control
quality and appearance
OVERACHIEVEMENT Reliable
delivery
Sales
support
UNDERACHIEVEMENT
Fast order
cycle
Access to top
Lead management
generation
HIGH IMPORTANCE
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7. CONCEPTUAL MAP
The Business to Business Marketplace--Now
Percent of
all products
Pure Highly
Commodity Customized
The Business to Business Marketplace--Future
Percent of
all products
Pure Highly
Commodity Customized
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8. VALUE CHAIN ANALYSIS
Share of user $
Manufacturers Specialty Dealers Users 2000 2005
1 wholesalers
120 150 300 40% 50%
Manufacturers Distributors Users 60% 50%
2 100% 100%
101 130 200
Total spending by users $10mm $15mm
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9. FIVE FORCES OF COMPETITION
Threat of
substitutes
Bargaining Struggles Bargaining
power of between power of
suppliers industry rivals customers
Threat of
potential
entrants
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10. Vision for disruption
Identifying and creating oppor-
tunities for temporary advantage
through understanding
•Stakeholder satisfaction
•strategic soothsaying
Directed at identifying new ways
to serve existing customers
better or new customers
that no one else
serves now
Tactics
Capability
for disruption
for disruption Market
Seizing initiative to gain
disruption
Sustaining the momentum by advantage by
developing flexible capacities for: •Shifting the rules
•Speed •Signaling
•Surprise •Simultaneous & sequential
strategic thrusts
that can be applied across
with actions that shape, mold,
many actions to build a
or influence the direction of
series of temporary
nature of the competitors’
advantageous
responses
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11. Arena 1 Arena 2 Arena 3 Arena 4
Cost & Quality Timing & know-how Strongholds Deep pockets
Disrupt Cat’s strategic strengths Outmaneuver Cat’s strengths (“Encircle Cat)
Boost Lower Timing Know-how Geographic
Channels Komatsu
quality cost Rolls out Aggressive Komatsu
Komatsu builds
one R&D and moves
moves to resources,
product new product out of
direct sales, new plants
at a time program Japanese
dealers, and user
stronghold to
then alliances to
Asia, Europe,
regional gain
South America,
centers strengths
and lastly
North America initially
Erodes Cat’s Picks off Undermines Erodes Maneuvers Erodes
premium price, Cat’s full Cat’s Cat’s World around Cat’s deep
global volume, line one Advantage Dominance Cat’s strong pockets
low costs by one On product One place dealer
innovation at a time network
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12. REQUISITES FOR THE LEARNING
ORGANIZATION
Visionary Target & Creating &
X X Information X X Execution
leadership trajectory systems striving
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