3. Business Drivers ?
The Business Drivers can be used as a performance
measurement system that considers not only financial measures, but also customer, business
process and learning measures. It can be used as a management system to implement strategy at
all levels of the organisation by facilitating the following functions:
• Clarifying strategy – the translation of strategic objectives into quantifiable measures
• Communicating strategic objectives – it can serve to translate high level objectives into
operational objectives and communicate the strategy effectively throughout the organisation
• Planning, setting targets and aligning strategic initiatives – achievable targets are set for each
perspective and initiatives are developed to align efforts to reach the targets
• Strategic feedback and learning – management receives feedback on whether the strategy
implementation is proceeding according to plan and on whether the strategy itself is
successful
Strategy workshop
4. Market Position
• The percentage of a specific market or market segment currently held by you, i.e.
your turnover in percent of the total turnover of the entire market. Your Ideal
Market Position indicates where you want to go; your strategy will answer how to
get there. Your current market share is an indication of whether an offensive or a
defensive strategy is the best strategy for your company. But your strategy will also
depend on your desired market position. Different marketing challenges and
strategies face market leaders, challengers, followers and market penetrators.
Strategy workshop
5. Market Position
• A Market Leader can generally strive to expand the total market generally through:
new users, new uses and more usage (e.g. Johnson and Johnson produced an
advertising campaign for their baby shampoo aimed at adults), defend or protect
its market share, increase its market share even further.
• The Challenger will often in the pursuit of greater profitability aim to increase its
market share by attacking other players within the market and exploring new
opportunities. The Challenger may position its product to compete head-on with
another brand. To successfully do so the challenger must have some advantages
over the leader, either with regards to resources, competence, strength or
endurance etc.
Strategy workshop
6. Market Position
• The Follower is generally not as aggressive as the Challenger but seeks its growth
path through cloning, imitation or adaptation. The Follower must know how to
retain current customers while attracting new customers.
• The Market Penetrator will generally aim to get a foothold on the market and may
aim to expand sales of present products in the present market or specialise in
some way in order to become a Niche Player. Improving quality or productivity and
increasing marketing activities could all be means of achieving market penetration.
Strategy workshop 1.
7. Estimate your Market Share (The Four Factors)
• Market Awareness
Out of 100 potential customers how many of these know of you and could
potentially do business with you? The figure below illustrates that in this
example out of 100 potential customers, 70 know of you. You can thus
exclude 30% of the total market.
Strategy workshop 1.
8. • Product Acceptance
"If our product/service does not meet customers‘ requirements they will
not buy from us”. Of the remaining market, 90% feel that your product
meets their requirements. Product Acceptance is thus estimated at 90%
and you can exclude 10% of the remaining market.
Strategy workshop 1.
Estimate your Market Share (The Four Factors)
9. • Company Ability
“If we do not match the customers‘ expectations they will not do business
with us”. Of the remaining market, 60% feel that you match their
expectations as a supplier. Consequently, you can exclude 40% of the
remaining market.
Strategy workshop
Estimate your Market Share (The Four Factors)
10. • Competitive Edge
"If our price and trading conditions are not competitive the customer will
not do business with us". Of the remaining market, 50% consider your
price and trade conditions competitive. Consequently, you can exclude
50% of the remaining market.
Strategy workshop 1.
Estimate your Market Share (The Four Factors)
11. • The Estimated Market Share
The market share is calculated by multiplying the four factors as illustrated
below. Understanding how the 4 factors influence– your market share and
evaluating– your performance accordingly, provides you with a clear
overview of company‘s strengths and weaknesses. In the example below
you perform a lot stronger on Product Acceptance (PA) than you do on
Competitive Edge (CE).
Strategy workshop 1.
Estimate your Market Share (The Four Factors)
12. • To increase your market share at least one of the drivers need to show an
improvement. The method also enables you to assess the strategic
capability of your segment, e.g. can you realistically improve any of the
Market Share Drivers? Such considerations are necessary if sensible
choices of future strategies are to be made.
Strategy workshop 1.
Estimate your Market Share (The Four Factors)
13. Analysis Basics
• Company Ability
Reflects the company‘s ability to fulfill the demands of the market. It
involves services, distribution, references, image, etc
• Competitive Edge
The company‘s ability to create an advantageous position for the
customer by fulfilling criteria such as price, payment, delivery terms and
warranty.
• Competitive Rivalry
If entry to an industry is easy then competitive rivalry is likely to be high. If
it is easy for customers to move to substitute products then again rivalry
will be high. Generally competitive rivalry will be high if:
– There is little differentiation between the products sold between
customers Competitors are approximately the same size of each other If the
competitors all have similar strategies It is costly to leave the industry hence they fight
to just stay in ( exit barriers)
Strategy workshop
14. Analysis Basics
• Competitor Analysis
The ultimate aim of competitor analysis is to determine how a competitor
might behave when faced with various environmental and competitive
changes. Competitors represent a major determinant of corporate success
and any failure to take detailed account of their strengths, weaknesses
and strategies is likely to lead not just to a sub-optimal performance, but
also to an unnecessary greater exposure to aggressive and unexpected
competitive moves. Competitor analysis seeks to:
– Provide an understanding of your competitive advantage/disadvantage relative to your
competitors‘ position Help in generating insight into competitors‘ strategies – past,
present and future Give an informed basis for developing future strategies to
sustain/establish advantages over you competitors
Strategy workshop
16. BMG
This material belongs to BMG – Business Media Group and may not
without consent from BMG be spread, copied our used for other
purpose than was agreed.
