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Dr.

SR
Sun Tzu Six
Strategic Principles
• Win All Without Fighting
• Avoid Strength, Attack Weakness
• Deception and Foreknowledge
• Speed and Preparation
• Shape Your Opponent
• Character-Based Leadership
Porter’s Model
Porter’s Model
Competitive Advantage
Lower Cost Differentiation

Broad
1. Cost Leadership 2. Differentiation
Target

Competitive
Scope
3A. Cost Focus 3B. Differentiation
Narrow
Focus
Target
Porter’s Model
Competitive Advantage
Lower Cost Differentiation

Broad 1. Cost Leadership 2. Differentiation


Target VIDEOCON BOSE REVLON

RELIANCE ROLEX
Competitive
Scope 3A. Cost Focus 3B. Differentiation
Focus
Narrow NIKE JOGGER
POLAROID
PEPSI
Target
Kotler Model(1996)
• Market Leader

• Market Challenger

• Market Follower

• Market Nicher
Howard-ShethModel of Consumer
Behaviour
INPUT INFORMATION PROCESSING DECISION PROCESS INFLUENCES

Environmental
Influences
Exposure Problem
Recognition • Culture
• Social Class
Stimuli: • Personal
Attention Internal Information • Family
Marketer Search Search • Situation
Dominated
& Other Comprehension Memory Evaluation of Individual
Alternatives Differences

Acceptance • Resources
Purchase • Motivation &
Involvement
Post-Purchase • Knowledge
Retention Evaluation • Attitudes
• Personality, Values
& Lifestyle
External Dissatisfaction Satisfaction
Search
Ansoff’s Matrix (Product/Market Matrix)

Existing Markets New Markets


Products

Market Market Development


Existing

Penetration
New Products

Product Development Diversificatio


n
Ansoff’s Matrix (Product/Market Matrix)

Existing Markets New Markets


New Products Existing Products

E.g. Realignments E.g. Geographical


of the marketing expansion
mix

Same outlets and Diversification -


sales strategy related or unrelated
- new product
• 1. Mission Statement
• Firm’s long-term vision based on careful analysis of
• benefits sought by present and potential customers
and
• analysis of existing and anticipated environmental
• conditions
• “What business are we in and where are we going?”
• 2. SWOT Analysis
• Strength, Weaknesses (internal)
• - What is an SBU?
• An SBU is a strategic business unit.
• An SBU has 3 distinct characteristics:
• 1. It is a single business that can be planned
independently of other businesses.
• 2. It has its own competitors.
• 3. It has one manager with profit responsibility.
• BCG Product Portfolio Analysis
• A. The Growth-Share Matrix
• The Boston Consulting Group (BCG)
developed a portfolio analysis method using
the growth/share matrix.
• The growth share matrix has four quadrants
within which SBUs are plotted.
• The vertical axis shows market growth rate,
the horizontal axis shows relative market
share.
• B. Portfolio Classification
• 1. Problem Child / Question Mark
• * Low share – high growth SBUs.
• * Poor profit margins.
• * Large cash requirements just to maintain their current
mkt share.
• 2. Star
• * High growth – high share SBUs.
• * Need heavy investments to finance rapid growth.
• * May not generate enough cash to support own growth
needs.
• 3. Cash Cow
• * Low growth – high share SBUs.
• * Profitable products that help finance stars and problem
children.
• * Generates high amounts of cash.
• 4. Dog
• * Low growth – low share SBUs.
• * Operates at a cost disadvantage, with few opportunities
for growth.
• * Not likely to be large sources of cash.
• * Most businesses in this category.
GE Multifactor Portfolio Matrix

• The GE approach uses a matrix with 2 dimensions:


• a) Business Strength
• relative market share, price competitiveness,
product quality,customer knowledge, sales
effectiveness, geographic advantages,
.
• b) Industry Attractiveness
• market size, market growth, industry profit margin,
amount of competition, seasonality and cyclicality
of demand, industry cost and structure
• The GE grid is divided into three zones:
• The upper left cells show strong SBUs in which
companies should invest and grow.
• The lower right cells indicate SBUs low in
attractiveness which they should harvest or
divest.
• The diagonal cells contain SBUs that are
medium in overall attractiveness.
• The GE approach is a more subjective approach
than the BCG one.
Boston Consulting Group Matrix
Relative Market Share
BCG Matrix High Medium Low
10 1 .1
High 20%
Stars (II) Question Marks (I)

Market
Growth
Rate Medium 10%
(Percent)
Cash Cows (III) Dogs (IV)

Low 0%
The GE Business Screen

High Winner Winner Question


mark
Industry growth rate

Medium Winner Average Loser


business

Low Profit Loser Loser


producer
Good Medium Poor
Competitive position
Competitive position Industry attractiveness
1.Market share 1.Market growth
2.Technological KH 2 Market size
3.Product quality .
4.Service network .3.Capital requirement
5.Price competitiveness
6.Operating costs 4.Competitive
intensity

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