Strategy

Big 5
Amazon, Apple, Microsoft, Google, and FB
How Apple, Google, Facebook, Amazon and Microsoft make their revenue
today shapes the battles they will fight tomorrow
Tech companies each had their own fiefdom
– Bulk of revenue came from these businesses
Market was big enough that each had plenty of areas to expand
As they become enormous, their search for growth led them onto one
another's turf
Amazon and Apple
– Getting more revenue than ever from advertising — the heart of Google's and
Facebook's business
Google is investing heavily to catch Amazon and Microsoft in cloud
computing
 Big 5

Microsoft, Google and Facebook play in different parts of the

gaming market, with Apple and Amazon slowly entering
Amazon, Apple and Google each operate major subscription
streaming services
All five are investing heavily in AR/VR hardware and systems
And all of them see AI as central to their future
Privacy war between Facebook and Apple
Apple trying to wrest the mobile maps market out of Google
 Apple

$365 billion in revenue

– Half from phone, 10% from computer, I-Pad, etc., 20% services
Core business: Hardware
Emerging businesses: Advertising and services, including financial
services (Apple Pay)
I-Phone – 100% ownership
Compete on subscription music to consumer cloud storage
Collaboration – Google search engine as default
 Google (Alphabet)

Alphabet - $161 billion revenue

– Bulk from Google Services
– Some revenue from YouTube ($30 million)
– Google cloud ($10 million)
Core business: Advertising via search
Emerging businesses: Enterprise software, cloud computing,
consumer hardware
Control over search and Play store
– Can make or break new players
 Amazon

$469 billion revenue

– Mostly from e-commerce
– $62 billion from Amazon Web Services
Core businesses: Online retail, web services
Emerging businesses: Advertising, physical retail, health care
Fears that they will become a monopoly
Where should they grow?
 Microsoft

$200 billion revenue

– Mostly office products
– Some from cloud
Core businesses: Windows, Office and other business software;
cloud services
Emerging businesses: Surface and other devices, cloud gaming
PC/Laptop versus Android/Apple phone
 What Is Strategic Planning?

Matching an organization’s
– Resources and capabilities to
– Its market opportunities
– For long-term growth and survival.
Planning is an ongoing process.
Characteristics of strategic plan.
Planning takes place at different levels.
Planning draws from other areas.
 Steps in Organizational Planning

Strategic company planning

– Defining mission.
– Situational analysis
– Determining goals and objectives.
– Selecting strategies.
Strategic marketing planning
– Assessing resources and evaluating risks and opportunities.
– Develop marketing objectives
– Determine positioning and differential advantage.
– Select target market and measure demand.
– Formulating marketing strategy.
Implementing marketing plans.
Feedback
 Defining Mission
Changes over time.
Long-range in nature.
Developing mission - 3 key elements.
– Organization’s history
– Distinctive competencies
– Environment
Effective statement - 4 characteristics
– Focused on customers.
– Benefits that firm will supply.
– Stage in the value-adding process.
– Competencies firm will develop.
 Some Actual Mission Statements

Office equipment manufacturer

– We are in the business of problem solving.
Our business is to help solve administrative,
scientific, and human problems.
 Some Actual Mission Statements

Business school
The school of business is a center of learning embracing
the college tradition of educating the head, heart, and
hands. The school fosters the advancement of
knowledge and practice in broad areas of business. The
school prepares students for citizenship, productive
careers, and additional educational initiatives
 Another B School

To develop future ready business leaders and entrepreneurs

with an analytical mindset, prepared for current and future
market needs, through contemporary and high quality
teaching, research, and social engagement
 One more B School

To generate and disseminate knowledge in all aspects

of management education for sustainable
development and to develop innovative leaders with
strong ethical values.
 Some Actual Mission Statements

Appliance manufacturer
– A willingness to invest in any area of suitable
profit and growth potential in which the
organization has or can acquire the capabilities.
 Some Actual Mission Statements

Akshaya Patra
No child in India shall be deprived of
education because of hunger
 Situational Analysis and Organizational
Strategies

Situational analysis
– Gathering and studying information
Organizational strategies
– Broad plans of action for company.
 Determining Goals and Objectives

Identify desired outcomes.

– Clear and specific
– Stated in writing
– Ambitious, but realistic
– Consistent with one another
– Measurable
– Evaluative
– Tied to a particular time period.
 Sample Objectives

Market standing
– To make our brands number one in their field in terms of market
share.
Innovations
– To be a leader in introducing new products by spending no less
than 7 percent of sales for research and development
Productivity
– To manufacture all products efficiently as measured by the
productivity of the work force.
 Sample Objectives

Physical and financial resources

– To protect and maintain all resources - equipment, buildings, inventory, and
funds.
Profitability
– To achieve an annual rate of return on investment of at least 15 percent.
Social responsibility
– To respond appropriately whenever possible to social expectations and
environmental needs.
Akshaya Patra
– To feed 5 million children by 2025
 Strategic Marketing Planning

Conduct situation analysis

Develop marketing objectives
Determine positioning and differential advantage
Select target markets and measure market demand
Design a strategic marketing mix
Assessing Resources and Evaluating Risks and Opportunities

Assessing resources
– What are resources?
» External Vs internal analysis
Evaluating risks and opportunities
– SWOT analysis
 Formulating Marketing Strategy

Result of SWOT analysis - formulation of marketing

objectives.
Marketing strategies should be
– Resource efficient
– Flexible
– Adaptable
Positioning and differential advantage
Target market and marketing mix
 Tools in Marketing Planning

Strategic business units.

Market share/market growth (BCG) matrix.
Market attractiveness/business strength matrix.
Product-market growth matrix.
Porter’s generic strategy model.
 Strategic Business Units

Divisions within multi-product companies with

– Distinct mission
– Own managers
– Identifiable customer segments
– Specific competitors
– Ability to plan independently

Back
 Characteristics of Strategic Plan

Broad in scope.
Typically long range.
Focus on overall objectives.
Most often conducted by top management.
Serves as the basis for tactical planning.

Back
 Planning At Different Levels
Strategic planning
– Top – Board of Directors, President, Operating Division Vice-Presidents
» Objectives of organization, fundamental strategies, total budget
Tactical planning
– Middle – GSM, MR Director, Head of Ad Dept.
» Quarterly and semi-annual plans, subdivision of budgets, policies and procedures for each dept.
Tactical planning
– Supervisory – District Sales Manager, Supervisors
» Daily and weekly plans, unit budgets

Back
 SWOT Analysis
Strength’s Opportunities

Cost advantages Leverage Add product line

Financial resources Enter new markets
Customer loyalty Acquire firms with
Production facilities new technology
Patents

Weaknesses Threats

Narrow product line Changing buyer tastes

Lack of mgmt depth Likely entry of new
High cost operation Problems competitors
Inadequate financing Adverse government
Weak image policies
Back
 BCG Matrix
Relative Market Share
High Masala Grill
Low
Fanta
Question Marks
Stars
Have potential to become

High

Industry Growth Rate

Generate considerable
a star or cash cow
income
McAloo Tikki Strategy – either invest
Strategy – invest more
more funds or consider
Diet Coke funds for future growth
disinvesting

Cash Cows
Dogs
Generate strong cash flow
Strategy – use profits to
Generate little profit McSpicy

Low
Strategy – consider Chicken
McFlurry finance growth of stars and
withdrawing
Sprite question marks Tab
Back
 Product-Market Growth Matrix

Present New
Products Products

Present
Market Penetration Product Development
Markets

New Market Development Diversification

Markets

Back
 Porter’s-Generic Strategy Model

Broad Narrow
Tgt Mkt Tgt Mkt

Product
Cost Leadership Cost Focus
Cost

Product Product Differentiation Differentiation

Differentiation Focus

Back