Define a business firm
An organization that serves its customers in order to earn a profit
What are the 3 levels of strategy in organizations
- Corporate level
- business unit level
- Functional level
Describe the corporate level
- top management directs overall strategy for the entire organization
- management at the corporate level focuses on the interests of the shareholders of the firm, as measured by stock performance and profitability
Describe the business unit level
- has business unit managers who set the direction for individual products and markets
- strategic direction is more specific at the business unit level of an organization
Describe the functional level
- each business unit has marketing and other specialized activities such as finance, manufacturing, or human resources.
- The name of a department generally refers to its specialized function, such as the marketing department or information systems department.
- At the functional level, the strategic direction becomes very specific and focused
Which level would each scenario go to
- In a large corporation with multiple business units, marketing may be called on to assess consumer trends
- Marketing may be asked to provide leadership in developing a new, integrated customer service program across all business units
- Marketing may implement an advertising campaign
1 = corporate level
2= business unit level
3 = functional level
Organizations need a reason for their existence - and direction. This is where their business, mission, and goals converge. What applies to which organizational level in businesses
Business and mission apply to the corporate and business unit levels, while goals relate to all levels
Define strategy
An organizations long term course of action that delivers a unique customer experience while achieving its goals
What do business plans do
- The business plan is a valuable tool for organizations to get ideas and goals down on paper, It is a document that can help convey the value of your company to investors, employees, and future partners.
- business plans help identify strengths, weaknesses, opportunities, and threats of a business, as well as help develop accurate financial forecasts
In the article Marketing Myopia what happened
Railroads as organizations were cited to have narrow, production oriented statement of their business: “We are in the railroad business” - this narrow definition of their business lost sight of wo their customers were and what their needs were
–> railroads only saw other railroads as competitors and failed to design strategies to compete with airlines, barges, pipelines, trucks etc.
–> would have fared better recognizing that they are in the transportation business
Define mission
Statement of the organization’s purpose and direction
Define goals/objectives
Targets of performance to be achieved within a specific time frame.
- take a mission and translate it into targeted levels of performance to be achieved within a specific time frame
How can marketing managers tell if they are making progress towards their strategic direction for their organization
- can measure performance by using marketing dashboards
The digital age we are in right now allows us to execute marketing plans with an aim-fire-adjust approach - after we execute a part of the marketing plan, we use the metrics to quickly adjust our plan and get closer to our desired result
define a marketing dashboard
A visual computer display of essential marketing information.
Each variable in a marketing dashboard is called a
Marketing metric - A measure of the value or trend of a marketing activity or result.
Asking an organization where it is at the present time involves
- identifying its customers, competencies, and competitors
–> Strategic directions must be customer focused and provide genuine value and benefits to existing and prospective customers. There should be clear competency for the organization and a good understanding of competition
Knowing where the organization is at a present time enables managers to set a direction for the firm and commit resources to move in that direction. Two techniques that aid in these decisions are
- business portfolio analysis
- market product analysis
Describe business portfolio analysis
- developed by Boston Consulting Group (BCG)
uses quantified performance measures and market growth rates to analyze a firm strategic business units as though they were a collection of separate investments
- used at the business level, has also been applied to the product line or individual product or brand level
If you are looking at the current market and current product, what market product strategy would be used
Market penetration - Ex. Selling more Ben and Jerry’s super premium ice cream in North America
If you are looking at the current market and a new product, what market product strategy would be used
Product development - Ex. selling a new product such as frozen yogurt under the Ben and Jerry’s bran in North America
If you are looking at a new market and a current product, what market product strategy would be used
Market development - Ex. selling Ben and Jerry’s super premium ice cream in Brazil for the first time
If you are looking at a new market and a new product, what market product strategy would be used
Diversification - Selling a new product such as breakfast cereal in China for the first time
After an organization assesses where it
s at and where it wants to go, it must work out how it will get there. What must it decide
- how to allocate resources
- how to convert plans into actions
- how results compare with plans, and whether deviations (results that differ from expectations) require new plans and actions
Define the strategic market process
Approach whereby an organization allocates its marketing mix.
