Market Oriented Strategies: An Overview

Strategic Planning, Implementation & Control Process:

Large companies normally manage quite different businesses, each requiring its own strategy
known as SBUs. GE Model helps in classifying these Strategic Business Units (SBU) separately
and helps assigning appropriate Funds / Resources for such SBUs.
BCG and GE models are used as analytical tools to classify its business by profit potential as
yesterdays has beens and tommorows breadwinners.



STARS
QUESTION
MARKS
CASH
COWS
DOGS
PLANNING IMPLEMENTATION CONTROL
CORPORATE
DIVISION
BUSINESS
PRODUCT
ORGANIZING
IMPLEMENTING
MEASURING RESULTS
DIAGNOSING RESULTS
CORRECTIVE ACTION
RELATIVE MARKET SHARE
M
A
R
K
E
T
G
R
O
W
T
H
Invest /
Grow
Invest /
Grow

Selective /
Earnings
Invest /
Grow

Selective /
Earnings

Harvest /
Divest

Selective /
Earnings

Harvest /
Divest
Harvest /
Divest

BUSINESS STRENGTH
MA
RK
ET
AT
TR
AC
TIV
EN
ESS
Strong Medium Weak
High
Medium
Low
BCG GROWTH SHARE MATRIX GE COMPETITIVE POSITION PORTFOLIO
Market Share
Industry Size
Planning New Businesses, Downsizing Older Businesses:
The companys plans for its existing businesses allow it to project total sales and profits. If there
is a Gap between future desired sales and projected sales Corporate Management will have to
develop or acquire new business to fill it.
The Strategies that are adopted to do so are:
1. The first is to identify opportunities to achieve further growth within current business
INTENSIVE GROWTH OPPORTUNITIES. Ansoff proposed a framework for detecting new
intensive growth opportunities called a PRODUCT-MARKET EXPENSION GRID.
The company first considered whether it could gain MORE MARKET SHARE either with
its current product or by moving into new market else by offering NEW PRODUCT FOR
NEW MARKET PRODUCT DIVERSIFICATION STRATEGY.











Examples:
MARKET PENETRATION STR: - Starbuck start selling coffee beans to local coffee lovers in
Seattle then later on it started Selling cafes servings directly to the customers.

MARKET DEVELOPMENT STR:- Starbuck started selling if Coffee in other tows / cities in
the Pacific Northwest, North America and then across globe.

PRODUCT DEVELOPMENT STR:- Along with Coffee Servings, Starbuck started offering
Compilation CDs and Joe Lifestyle Magazines to its customers visiting its Coffee parlors

PRODUCT DIVERSIFICATION STR:- Then Starbuck started offering Starbuck Brand of Ice
Creams and the purchases of Tea retailer Tazo Tea through its Grocery stores along
with aisles with Frappuccino bottled drinks.

Market
Penetration
Market
Development

Product
Development

Diversification

New Products Current Products
Current Markets
New Markets


2. The second is to identify opportunities to build or acquire business that are related to
current business INTEGRATIVE GROWTH OPPORTUNITIES.
Often the business profits can be increased through-
BACKWARD INTEGRATIVE STR:- Like a TV Mfr company starts Mfring Picture Tubes.
(Samtel a picture Mfr company started Mfring PC Monitors, Videocon acquired Thomson, a
Picture Tube Mfring Company)
FORWARD INTEGRATIVE STR:- The Companies Like Sony, Samsung came up with the
concept of having Company Owned Stores, besides Mfring electronic items and gained
strategic capabilities of being near to the customers and serve better.
HORIZONTAL INTEGRATIVE STR:- Acquiring Competitors Business as it happened with
Daewoo Motors got acquired by Coverlet for passenger cars in India.

3. The Third is to identify opportunities to add attractive businesses that are unrelated to
current business DIVERSIFICATION GROWTH OPPORTUNITIES.
It makes sense when good opportunities can be found outside the present business. A
good opportunity is one in which the industry is highly attractive and the company has
mix of Business strengths to be successful.
The Company can diversify as follows:
a. The company could seek new products that have technological or marketing
synergies with existing product lines, even though the new product themselves may
appeal to a different group of customers CONCENTRIC DIVERSIFICATION.
Example: Tata manufacturing Small Passenger Cars starts manufacturing MUVs and
Small Carriage Vehicles like Tata 407 utilizing same technological synergies.
b. The company might search for new products that could appeal to current customers
even though the new products are technologically UNRELATED to its current product
line HORIZONTAL DIVERSIFICATION.
Example: Tata start Manufacturing Shock Absorbers for replacement market of its
own TATA Brand of Vehicles / Customers.
c. The company might seek new businesses that have no relationship to its current
technology, products or markets CONGLOMERATE DIVERSIFICATION





DOWNSIZING OF OLDER BUSINESS:
Companies must not only develop new businesses, but must also carefully prune, harvest or
divest old businesses in order to release needed resources and reduce cost.
THE BUSINESS UNIT STRATEGIC PLANNING:







STRATEGIC FORMULATION:
PORTERS GENERIC STRATEGIES:-



Keep the price low & win Seek Differentiation in
Large market share product, may be based on Te-
Focus on niche / narrow markets chnology i.e INTEL.
TATA
TATA Tisco TATA Motors TATA Trucks Titan Tanishq
1. Business
Mission
2. Ext. Env.
Analysis
3. Int. Env
Analysis
4. Goal
Formulation
5. Str.
Formulation
6. Program
Formulation
7.
Implementation
8. Feedback
& Control
SWOT
Overall Cost Leadership Differentiation
Focus
McKinsey 7-S Frame Work:




STEPS OF PLANNING PROCESS:
1. Analyzing Market opportunities.
2. Developing Marketing Strategies
3. Planning Marketing Programs.
4. Managing the Marketing Efforts.
PRODUCT PLANNING: THE NATURE & CONTENTS OF MARKETING PLAN-
1. Current Market Situation
2. Opportunities & Issues Analysis
3. Objectives
4. Marketing Strategy
a. Positioning (Building Image in the Minds of Customer, eg. Lets Go.Alto, From
Thought to Finish E&Y.)
b. Product Management. (Managing Product Mix, Line and Width to optimize
production & Profits)
c. Pricing (Affordable to the Targeted Segment)
d. Distribution (Taking Decisions regarding Channels of distribution and Availability of
the Product in the Market eg. Franchising, Company Owned Outlets like Bata,
Strategic Partners like Pantaloon Stores, Big Bazar etc )
e. Marketing Communication (All about Media Planning related to ADs and
Developing PR)
f. Marketing Research (For Value Addition and New Product Development and
Keeping / tracking the Customer to fight with Intense Competition)