Strategic Marketing

Management
Presented By :

Asad Bin Sohail

Husnain Ali
Abdul Rehman Amjad
 What is strategy ?

• The origin of strategic • Strategic fit

• 3 principles of strategy
positioning • Types of Fit
• Operational effectiveness
• PEST Analysis • Sustainability & Fit
• Strategy rests on Unique
• SWOT Analysis
activities
• Rediscovering strategy
• Role of leadership
 Principles of Strategic positioning
?
Strategy is the creation of a unique & valuable position,
involving a different set of activities

Strategy requires you to make trade-offs in competing

Strategy involves creating “fit” among a company’s

activities
1. Strategy- Creation of unique & valuable position
Emerges from three distinct sources:

Few needs of Many Broad needs of Few

customers – Jiffy Lube customers- Bessemer
(auto lubricant) Trust (wealthy clients)

Broad needs of Many

customers –
Emporium, Carrefour
2. Strategy – requires trade off in competing

To choose what not to do.

Competitive activities-
incompatible

Gain in particular area

At the expense of other

Example : Medicam
 3. Strategy- Creating “Fit” among company
activities

Creating Fit Leadership Difficult to imitate Interaction &

Reinforcement of
company activities
I. Operational Effectiveness Strategic positioning
Performing similar activities better than
rivals perform the

Refers to any practices that allow a

Performing different activities from rivals’
company to better utilize its inputs in different ways

Example, reducing defects in products or

developing better products faster.
 I. Operational Effectiveness

Flexible

Must Benchmark
continuously

Aggressive
outsourcing

Core competencies
HYPER COMPETITION
Copying market positions, temporary
competitive advantage, mutually destructive
competition
 II. Strategy Rests on Unique Activities

Strategy is the creation

It is choosing to of a unique and
Competitive strategy is
perform activities valuable position,
about being different.
differently than rivals. involving a different set
of activities
 II. Strategy Rests on Unique Activities

South West
Low cost service
Airlines

Based on tailored
set of activities, Price sensitive
unique and customers
valuable.

Stacked Valuable
& unique strategic
position.
 The Origins of Strategic Positions

Strategic positions emerge from three sources, & often overlap.

Variety-based
positioning
Need-based
positioning
Access-based
positioning
 1. Variety-Based Positioning

“Do what you do best”

• It is based on the choice of
product/service varieties rather
than customer segments.
• Only meets a subset of their needs.
• It is economically feasibly when a
company produces particular
products using distinctive sets of
activities.
 2. Need-Based Positioning

“Do everything, but only for a

particular group of customers”
• Serves most needs of a particular group of
customers.
• It is based on targeting a segment of
customers.
• It arises when there are a group of customers
with differing needs.
• And when a tailored set of activities can serve
those needs best.
 3. Access-Based Positioning
“Go where your customers are”
• Segmenting customers who are
accessible in different ways.
• The best configuration of activities
to reach them is different.
• Access can be a function of
customer geography or customer
scale
• Reach customers in the best way.
 PEST Analysis

Polictical Economical

Social Technological
Can Differentiation and Cost
strategy be implemented at
the same time?
 Strategic Fit
Fit = seeing the company as a system not just a
collection of core competencies, critical
resources, and key success factors
• Fit Drives Both Competitive Advantage and
Sustainability
• Operational effectiveness focuses on
individual activities, strategy concentrates on
combining activities.
• Fit locks out imitators by creating a chain that
is as strong as its weakest link
• Fit, is the central component of competitive
advantage
 Types of Fit

3 types of strategic fit (the whole matters more than any

individual part):
First Order Fit
Simple consistency between each activity and the overall
strategy.
Makes it easier to communicate and implement strategy
through single-mindedness in the corporation
Second Order Fit
Occurs when activities are reinforcing
Third Order Fit
Optimization of effort, coordination and information
exchange
 Fit &
Sustainability
As fit becomes more complex (multiple interrelationships)
within a firm, the more difficult imitation is.

Far more sustainable than those built on individual activities

Second- and third-order fit, the more sustainable its advantage

will be
Fit among activities creates pressures and incentives to improve
operational effectiveness
Poor performance in one activity will degrade the performance
in others

Continuous improvement allows to build unique capabilities

 Rediscovering Strategy

Failure to Choose The Growth Trap

• External and Internal threat
• Misguided view of competition
• Desire to grow
• “Best-practice" mentality of the managers
• Pressures of growth and Compromises
• Companies have compromised their
way to homogeneity with their rivals
• Pursuit of growth erode the competitive
advantage of a company
 Rediscovering Strategy

Profitable Growth
• Concentrate on deepening a strategic position
• Offering features or services that rivals would
find impossible
• Globalization often allows growth that is
consistent with a company’s strategy
• Making the company’s activities more
distinctive, strengthening fit, and
communicating strategy better to those
customers who value it
 SWOT Analysis

Strengths Weakness

Opportunities Threats
 Role of Leadership

Focus on creating distinctiveness

Make tough decisions on trade-offs

Define the company’s position

Focus on the long term

Manage the entire system to create
fit
Stewardship of corporate strategy