Chapter 2: Company & Marketing Strategy
Strategic Business Unit (SBU)
a company division, product line within a division, or sometimes a single product or brand
Value Delivery Network
a network composed of the company, suppliers, distributors, and, ultimately, customers who partner with each other to improve the performance of the entire system in delivering customer value
The Product/Market Expansion Grid (Market Growth Strategies)
a portfolio planning tool for identifying company growth opportunities through market penetration, market development, product development, or diversification
BCG (Boston Consulting Group) Matrix
a portfolio-planning method that evaluates a company's SBUs in terms of market growth rate and relative market shared
Positioning
arranging for a market offering to occupy a clear, distinctive, and desirable place relative to competing products in the minds of target consumers
Differentiation
differentiating the firm;s market offering to create superior customer value
Market Targeting
evaluating each market segment's attractiveness and selecting one or more segments to enter
Product Development (Market Growth Strategy)
existing market/new product; offering modified or new products to current markets; ex: Starbuck's K-Cup
Market Penetration (Market Growth Strategy)
existing market/product; making more sales to current customers without changing its original products; ex: selling in bulk
Star (BCG Matrix)
high-growth, high-share businesses or products; need heavy investments to finance their rapid growth; eventually turn into cash cows
Cash Cows (BCG Matrix)
low-growth, high-share businesses or products; need less investment, thus produce a lot of cash that the company is able to use to pay bills and support other SBUs
Dog (BCG Matrix)
low-growth, low-share business and products; may generate enough cash to maintain themselves, but do not promise large sources of cash
Question Marks (BCG Matrix)
low-share, high-growth markets; require a lot of cash to hold their share, or increase it; debate on what question marks to build into stars or phase out
Market Development (Market Growth Strategy)
new market/existing product; same product sold in a different way to a new group
Customer Value Driven Marketing Strategy
segmentation, targeting, differentiation, positioning
Business Portfolio
the collection of businesses and products that make up the company
Mission Statement
- a statement of the organization's purpose - market oriented - defined in terms of satisfying basic customer needs - emphasizes the company's strengths - focus on customers and customer experience
Marketing Segmentation
Dividing a market into distinct groups of buyers who have different needs, characteristics, or behaviors, and who might require separate products or marketing programs
Diversification (Market Growth Strategy)
New Market/New Product; starting up or buying businesses beyond its current products or markets