DEVELOPING MARKETING STRATEGIES

Summary of discussion
Strategy Set of choices company make about where and how to compete in a market Its a plan to gain competitive advantage or edge over rivals Its about performing set of activities in a different manner that creates unique value to the company and the customer Review of the case SWA, IKEA and Dell How these companies have created unique value to its customers by doing things differently

Key lessons
There should be proper alignment of functional activities with corporate or business level strategy. Functional activities should support corporate strategy. How functional activities are perfectly aligned to achieve low cost in the case of SWA Point to Point, Single fleet, No frills, Rapid turnaround time, WOM, Crew performing varied tasks, Ticketless entry etc

Direct from Dell

Michel Dell redefined how computers were sold by eliminating middle men and directly dealing with customers using internet. Dell sought to differentiate itself through its core business mantra of being direct with customers.
 

But how far this business strategy is sustainable? Cant this strategy be easily imitated by competitors? Bottom line Companies have to constantly rethink or reassess their strategy in the light of changing environmental situations. They should constantly look out for new opportunities and capitalize on them if it deems fit to their business objectives and strengths

Strategy as Transformation

The importance of strategic innovation

Strategic innovation refers to this process of reinventing strategies. In other words, strategic innovation represents the following types of creative departures from historical industry practices

Strategic innovations
Innovations in the design of the end-to-end value chain architecture (e.g., Dell Computer) Innovations in the conceptualization of delivered customer value (e.g., IBMs shift from selling hardware and software products to selling complete solutions) Innovations in the identification of potential customers (e.g., Canons pioneering focus on the development of photocopiers targeted at small businesses and home offices rather than large corporations).

Reverse innovation

Challenge the assumption: Products that address developing countries needs cannot be sold in developed nations

Converting Environmental Opportunities into Organizational Opportunities

Sources of environmental opportunity: Unmet or changing customer needs Unsatisfied buyer groups New means or technology for delivering value to prospective buyers

An Indian Innovation Keeping Senior Citizens Safe

India has a whopping 60 million senior citizens, even though it's a young country overall. (That 60 million represents only 5% of the population.) Providing those seniors with good health care is a growing problem.

Challenges
Health care infrastructure inadequate especially in rural areas Change in family structure From joint to nuclear family leaving less time for youngsters to take care of elders

MUNOTH COMMUNICATIONS

The company came up with a unique mobile phone, costing less than US $50. In case of an emergency, the customer can simply press the red SOS button on the mobile phone to raise an alarm. The phone automatically sends out text messages to 10 preconfigured numbers, including that of the ambulance service, the blood group agency, and the insurance company. Further, the GPS system in the phone helps responders to trace the location of the patient.

After buying the phone, the user can register the mobile phone on the web and store all of his or her medical records. Based on the patient's medical condition, the company sends out pre-programmed reminders about taking medication and maintaining dietary restrictions; this service is free of cost for one year. After the first year, the user is charged just US $0.67 per month for these services. Currently the company offers this service only to diabetes patients, but will soon extend it to cardiac patients.

LEVELS OF STRATEGY

Levels of Strategy

Corporate strategy concerns two different questions: What businesses the corporation should be in How the corporate office should manage the array of business units.


Competitive strategy on the other hand concerns how to create competitive advantage in each of the businesses in which a company competes.

Corporate Strategy
Deciding on the companys objectives and goals, including the determination of which and how many lines of business to engage in. Acquiring the resources needed to attain those objectives. Allocating resources among the different businesses so that the objectives are achieved.

The Strategic Management Process

Assessing growth opportunity

Ansoffs Product-Market Grid

Current products New products

Current Mkts

Mkt penetration strategy

Product development strategy

New Mkts

Mkt development strategy

Diversification Strategy

Ansoffs Product-Market Grid - ITC

Current products
Apparels category Wills Sport Selling more of existing products

New products
FMCG - ITCs Personal care products Shampoo, Soaps, Fragrance, Fairness cream under different brand names Apparels Wills Classic, Club life and Signature

Current Mkts

New Mkts

Wills life style stores in various cities Selling same product to new users or in geography

ITCs Diversification in to various businesses like FMCG, Retail, Agri-biz, Hotels, Paperboards and Packaging

Balanced Scorecard
Balanced Scorecard is a strategic planning and management system used: To align business activities to the vision and strategy of the organization To improve internal and external communications To monitor organization performance against strategic goals.

Balanced scorecard