Marketing Strategy

Implementation
Organizational Issues
I hope you aren’t using this strategy
for your project:

“This report, by its very length,

defends itself against the risk of being
read.”
- Winston Churchill
 “If I had to sum up in one word what
makes a good manager, I’d say
decisiveness. You can use the fanciest
computers to gather the numbers, but
in the end you have to set a timetable
and act.”
- Lee Iacocca
 Implementation
• Recall: A strategy involves the product-market
investment decision, the value proposition, the
selection of functional area strategies and the
identification of bases for SCA.
• Must assess strategy in terms of organizational
risks and any organizational changes required.
Costs? Feasibility?
• Strategy must successfully interact with the 4
organizational components and organizational
performance.
A Framework for Analyzing
Organizations

ExternalAnalysis
External Analysis Internal
Internal Analysis
Analysis

Strategy
Strategy

People
People Structure
Structure

Systems
Systems Culture
Culture

Performance
Performance
Figure 16.1
 Organizational Structure
• Defines lines of authority and communication and specifies
the mechanism by which tasks and programs are
accomplished.
• Decentralization vs. Centralization
– Advantages of Decentralization:
• Managers are close to market and understand customer needs so they
can provide superior value propositions.
• Managers understand and product technology.
• Managers are empowered to act quickly.
• Managers can be held accountable for results.
• Fosters energy and vitality.
– Disadvantages of Decentralization:
• Does not create cross-business synergies.
• What is best for an SBU is not necessarily best for firm.
 Organizational Structure
• Matrix Organization allows a person to
have two or more reporting links.
• Virtual Corporation is a team of people
and organizations specifically designed for
a client or job (e.g., communication firms).
• Alliance Networks with suppliers,
customers, distributors and even
competitors.
 Systems
• Systems can fundamentally influence
strategy:
– Accounting and Budgeting Systems
– Information Systems (e.g., EDI)
– Measurement and Reward System
• Must be sure rewarding desired behaviors.
• Must be sure not based so closely to SBU that
they jeopardize cooperation, communication and
synergy across SBUs.
– Planning System
 People
• Make, Buy or Convert
• Culture involves 3 elements:
1. Set of shared values or dominant beliefs that define an
organization’s priorities.
2. Set of norms of behavior. Can vary on 2 dimensions:
1. Intensity or amount of approval/disapproval attached.
2. Degree of consensus or consistency.
3. Symbols and symbolic activities used to develop and
nurture shared values and norms.
– Founder and Original Mission (e.g., Disney, Shaklee, P&G)
– Modern Role Models
– Activities
– Questions Asked
– Rituals
Organizational Culture

Shared
Shared Normsof
Norms of Behavior
Behavior
Values
Values

Organizational
Culture

Symbols
Symbolsand
and
Symbolic
Symbolic Action
Action
Figure 16.2
 Obtaining Strategic Congruence
• Do the systems fit the structure?
• Do the people fit the structure?
• Does the structure fit the culture?
 Hit Industry Topology
(Figure 16.4)
• Hit Industry is one in which the goal is to
obtain, produce, and exploit a product that
will have a relatively short life cycle (e.g.,
movies, records, fashion, publishing, oil).
– Drillers (e.g., wildcatters, talent scouts, artists)
– Pumpers (e.g., well operators & refiners, DVD
pressers, movie directors, printers)
– Distributors (e.g., pipeline operators, retailers,
distributors)
Organizing for Innovation

• Decentralization - Keeping Business Units Small

• Task Forces

• Skunk Works

• Kaizen – Ongoing improvements

• Reengineering – Breakthrough Results

• Seeking Radical, Disruptive Innovation

14
Strategy Development:
A Discussion Agenda

Customer Analysis
 Who are the major segments?
 What are their motivations and unmet needs?

Figure 16.5
Strategy Development:
A Discussion Agenda
Competitor Analysis
 Who are the existing and potential competitors?
 What strategic groups can be identified?
 What are their sales, share, and profits?
 What are the growth trends?
 What are their strengths, weaknesses, and strategies?

Figure 16.5
Strategy Development:
A Discussion Agenda
Market Analysis
 How attractive is the market or industry and its submarkets?
 What are the forces reducing profitability in the market,
entry and exit barriers, growth projections,
cost structures, and profitability prospects?
 What are the alternative distribution channels
and their relative strengths?
 What industry trends are significant to strategy?
 What are the current and future key success factors?

Figure 16.5
Strategy Development:
A Discussion Agenda

Environmental Analysis
 What environmental threats, opportunities,
and trends exist?
 What are the major strategic uncertainties
and information need areas?
 What scenarios can be conceived?

Figure 16.5
Strategy Development:
A Discussion Agenda

Internal Analysis
 What are our costs, strategy, performance, points of
differentiation, strengths, weaknesses, strategic
problems
and culture?
 What is our existing business portfolio?
 What has been our level of investment in our various
product markets?

Figure 16.5
Strategy Development:
A Discussion Agenda

Strategy Development
 What strategic options should be considered - quality, value,
focus, innovation, global, product attributes, product design,
product-line breadth, corporate social responsibility, brand
familiarity, and customer intimacy.
 What assets and competencies will provide the basis for
an SCA? How can they be developed and maintained?
How can they be leveraged?
 What value proposition will be the core of the offering?

Figure 16.5
Strategy Development:
A Discussion Agenda

Strategy Development
 What are the alternative functional strategies?
 What strategies best fit our strengths, our objectives
and our organization?
 What alternative growth directions should be considered?
How should they be pursued? What investment level is
most appropriate for each product-market withdrawal,
milking, maintaining, or growing?

Figure 16.5