2. What is the Value Chain?
The value chain is a tool for identifying ways to
create more customer value because every firm is a
synthesis of primary and support activities performed
to design, produce, market, deliver, and support its
3. Core Business Processes
• Market-sensing process
• New-offering realization process
• Customer acquisition process
• Customer relationship management process
• Fulfillment management process
4. Characteristics of Core Competencies
• A source of competitive advantage
• Applications in a wide variety of markets
• Difficult to imitate
5. Holistic Marketing
Key management questions are:
•Value exploration —How a company identifies new value
•Value creation —How a company efficiently creates more
promising new value offerings?
•Value delivery —How a company uses its capabilities and
infrastructure to deliver the new value offerings more
Holistic Marketing sees itself as integrating the value
exploration, value creation, and value delivery activities
with the purpose of building long-term, mutually satisfying
relationships and co-prosperity among key stakeholders.
6. What is a Marketing Plan?
A marketing plan is the central instrument for
directing and coordinating the marketing effort. It
operates at a strategic and tactical level.
7. Levels of a Marketing Plan
• Target marketing
• Value proposition
• Analysis of
• Product features
• Sales channels
11. Rubbermaid Commercial Products, Inc.
“Our vision is to be the Global Market Share
Leader in each of the markets we serve. We
will earn this leadership position by
providing to our distributor and end-user
customers innovative, high-quality, cost-
effective and environmentally responsible
products. We will add value to these products
by providing legendary customer service
through our Uncompromising Commitment
to Customer Satisfaction.”
“The purpose of Motorola is to honorably
serve the needs of the community by providing
products and services of superior quality at a
fair price to our customers; to do this so as to
earn an adequate profit which is required for
the total enterprise to grow; and by doing so,
provide the opportunity for our employees and
shareholders to achieve their personal
“We help people trade anything on earth.
We will continue to enhance the online
trading experiences of all—collectors,
dealers, small businesses, unique item
seekers, bargain hunters, opportunity
sellers, and browsers.”
15. Product Orientation vs. Market Orientation
Company Product Market
We run a railroad We are a people-
Xerox We make copying
We improve office
Standard Oil We sell gasoline We supply energy
Columbia Pictures We make movies We entertain
16. Characteristics of SBUs
• It is a single business or collection of related
• It has its own set of competitors
• It has a manager responsible for strategic planning
17. Assigning Resources to Each SBU
Several investment planning models provide ways to make
investment decisions as follows:
•The GE/McKinsey Matrix classifies each SBU by the extent of
its competitive advantage and the attractiveness of its industry.
Management can decide to grow, “harvest” or draw cash from,
or hold on to the business.
•Another model, BCG’s Growth-Share Matrix, uses relative
market share and annual rate of market growth as criteria to
make investment decisions, classifying SBUs as dogs, cash
cows, question marks, and stars.
23. Business Mission
• Each business unit needs to define its specific mission
within the broader company mission. Thus, a television-
studio-lighting-equipment company might define its mission
as, “To target major television studios and become their
vendor of choice for lighting technologies that represent the
most advanced and reliable studio lighting arrangements.
25. Market Opportunity Analysis (MOA)
• Can the benefits involved in the opportunity be articulated
convincingly to a defined target market?
• Can the target market be located and reached with cost-
effective media and trade channels?
• Does the company possess or have access to the critical
capabilities and resources needed to deliver the customer
• Can the company deliver the benefits better than any
actual or potential competitors?
• Will the financial rate of return meet or exceed the
company’s required threshold for investment?
26. Goal Formulation
Once the company has performed a SWOT analysis, it can
proceed to goal formulation, developing specific goals for the
planning period. Goals are objectives that are specific with
respect to magnitude and time. Most business units pursue a
mix of objectives, including profitability, sales growth, market
share improvement, risk containment, innovation, and
reputation. The business unit sets these objectives and then
manages by objectives (MBO). For an MBO system to work,
the unit’s objectives must meet four criteria:
•Unit’s objectives must be hierarchical
•Objectives should be quantitative
•Goals should be realistic
•Objectives must be consistent
27. Strategic Formulation:
Porter’s Generic Strategies
• Overall cost leadership. Firms work to achieve the lowest
production and distribution costs so they can underprice
competitors and win market share.
• Differentiation. The business concentrates on achieving
superior performance in an important customer benefit
area valued by a large part of the market.
• Focus. The business focuses on one or more narrow
market segments,gets to know them intimately, and
pursues either cost leadership or differentiation within the
28. Strategic Formulation :
• Product or service alliances —One company licenses
another to produce its product, or two companies jointly
market their complementary products or a new product.
• Promotional alliances —One company agrees to carry a
promotion for another company’s product or service
• Logistics alliances —One company offers logistical
services for another company’s product.
• Pricing collaborations —One or more companies join in a
special pricing collaboration.