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Business Strategy - Elements Business Strategy
BU481 Chapter 2
Instructors: T. Dominguez, L. Gazzola, P. Lemieux
Goals

Strategic Manageme ent

Value Proposition Product Market Focus Core Activities



Analysis: Degree of linkage and coherence between the elements.

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Pat Lemieux P.Eng

BU481

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Goals

Goals

Goals
HARD GOALS
PROFITABILITY - ROS, - ROCE, - ROE MARKET POSITION - Rank by: Sales, Assets - Market share - Proportion of new products GROWTH - Increase in: Sales, Assets, Earnings - Growth in Earnings Per Share (EPS) RISK - Financial risk - Operating risk MANAGEMENT - Autonomy - Status

Product Market Focus

Value Proposition

Core Activities

Product /Market Focus
PRODUCT

Product Market Focus

Value Proposition

Core Activities

SOFT GOALS

Strategic Manageme ent

Strategic Manageme ent

EMPLOYEES - Economic security - Advancement opportunities - Working conditions COMMUNITY (local) - Contribution to community - Control of externalities SOCIETY (broad) - Benefits of innovation - Contribution to political stability and representation

EXISTING

NEW

EXISTING MARKET NEW

Market penetration

Product development

Market development

Diversification

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Pat Lemieux P.Eng

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Goals

Goals

Value Proposition


Product Market Focus

Value Proposition

Core Activities

Value Proposition – Examples
PRICE
DIRECT List price Discount structure Rebates Credit t C dit rates INDIRECT Financial assistance Capital VS operating costs Life cycle cost Cost absorption (delivery, training)

Product Market Focus

Value Proposition

Core Activities

Strategic Manageme ent

1.

2.

Valued by customer in the “Target Market ”. Differentiator 

Set a product or service apart from competition within the “Target Market”

Strategic Manageme ent

A product / service attribute is an element of the value proposition when it is:

FEATURES
TANGIBLE Quality Performance Proprietary properties Pre Post l P & P t sales service i Options, choice Guarantees INTANGIBLE (IMAGE) Design Fashion Prestige Association (person or event)

EXECUTION
AVAILABILTY Timing Convenience Delivery RELIABILITY When promised Where Promised As promised INTENSITY Friendliness Sales relationship Service relationship

Pat Lemieux P.Eng

BU481

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Goals

Goals

Core Activities


Product Market Focus

Value Proposition

Core Activities

Competitive Advantage


Product Market Focus

Value Proposition

Core Activities

Activities within the firm that add value.


Value proposition that is:
1.
1.

Strategic Manageme ent



Contributes directly to the value proposition. Need to distinguish between necessary activities and those that add value.

Strategic Manageme ent

Important to targeted customers customers.
Need to distinguish between valued and important.

2.

Hard for competition to match / copy.

Pat Lemieux P.Eng

BU481

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Pat Lemieux P.Eng

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Goals

Business Strategy


Product Market Focus

Value Proposition

Core Activities

Assessment steps:
1.

Strategic Manageme ent

Do the four elements complements and reinforce each other ?


Clarity, Logical, Clarity Logical Coherence

2.

3.

Does the value proposition resonate in the target market? Does the Business Strategy fits with the other elements of the business ? 

Organization, Resources, Management Preference and Environment. BU481 9

Pat Lemieux P.Eng

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