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Leadership Skills

Subtopic

ProfessionalTopic

Course Guidebook

Professors Thomas J. Goldsby, Ryan Hamilton, Clinton O. Longenecker, Michael A. Roberto, and Eric Sussman

Critical Business Skills

for Success

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The Teaching Company.

i

Michael A. Roberto, D.B.A. Trustee Professor of Management

Bryant University

Professor, Critical Business Skills: Strategy

Professor Michael A. Roberto is the Trustee Professor of Management at Bryant

where he has taught since 2006. Before joining

Everest Leadership and Team Simulationin the eLearning category at the 16th

Columbia’s Final Mission

ii

Professor Roberto is the author of two books: Why Great Leaders Don’t Know

What You Don’t Know: How Great Leaders Prevent Problems before They Happen Harvard Business Review, MIT Sloan Management Review California Management Review. Professor

Transformational Leadership: How Leaders Change Teams, Companies, and Organizations

iii

Thomas J. Goldsby, Ph.D.

Fisher College of Business

PMichigan State University.

Transportation Journal

of the Quarterly

Transportation JournalJournal of Business

The

iv

The Design and Management of Sustainable Supply Chains

Chain Management: Strategies for Gaining Competitive Advantage.

v

Eric Sussman, M.B.A.

University of California, Los Angeles,

Professor, Critical Business Skills:

Pthe state of California.

Bloomberg Businessweek

by Top Business Degrees

vii

Clinton O. Longenecker, Ph.D.

Professor, Critical Business Skills:

P

MIT Sloan Management Review, Industrial Management, Business Horizons, The European Business Review,

The Wall Street Journal Investor’s Business Daily

viii

Getting Results: Five Absolutes

languages. His latest book is The Two-Minute Drill: Lessons for Rapid

Continuous

Ryan Hamilton, Ph.D.Associate Professor of Marketing

Professor, Critical Business Skills: Marketing

Professor Ryan Hamilton is an Associate

Poets & Quants, an online

, the Journal of , the Journal of Marketing,

The New York Times, The Wall Street Journal, TIME, USA TODAY, Times, New York

Table of Contents

INTRODUCTION

LECTURE GUIDES

Professor Biographies ......................................................................... i

Critical Business Skills: Strategy

Scope .................................................................................................1

LECTURE 1Strategy Is Making Choices ................................................................3

LECTURE 2How Apple Raises Competitive Barriers ...........................................10

LECTURE 3The Danger of Straddling .................................................................17

LECTURE 4What Trader Joe’s Doesn’t Do ..........................................................24

LECTURE 5First Movers versus Fast Followers ..................................................31

LECTURE 6 ..........................................................38

LECTURE 7Anticipating Your Rival’s Response ..................................................44

LECTURE 8..............................................................51

Table of Contents

LECTURE 9 .............................................................58

LECTURE 10Forward and Backward Integration...................................................65

LECTURE 11Mergers and Acquisitions—The Winner’s Curse ..............................72

LECTURE 12Launching a Lean Start-Up...............................................................79

Critical Business Skills: Operations

Scope ...............................................................................................89

LECTURE 13The Power of Superior Operations ...................................................91

LECTURE 14Leaner, Meaner Production ..............................................................98

LECTURE 15 ...........................................................106

LECTURE 16Matching Supply and Demand .......................................................114

LECTURE 17Rightsizing Inventory ......................................................................122

LECTURE 18Managing Supply and Suppliers .....................................................129

LECTURE 19The Long Reach of Logistics ..........................................................136

Table of Contents

LECTURE 20Rethinking Your Business Processes .............................................143

LECTURE 21Measuring Operational Performance..............................................150

LECTURE 22Keeping an Eye on Your Margins ...................................................157

LECTURE 23Leveraging Your Supply Chain .......................................................164

LECTURE 24Reducing Risk, Building Resilience ................................................171

Critical Business Skills: Finance and Accounting

Scope .............................................................................................181

LECTURE 25Accounting and Finance—Decision-Making Tools .........................183

LECTURE 26How to Interpret a Balance Sheet...................................................190

LECTURE 27Why the Income Statement Matters ...............................................198

LECTURE 28How to Analyze a Cash Flow Statement ........................................206

LECTURE 29Common Size, Trend, and Ratio Analysis ......................................213

LECTURE 30 ...........................................................220

Table of Contents

LECTURE 31Understanding the Time Value of Money ........................................228

LECTURE 32 ........................................236

LECTURE 33How Investors Use Net Present Value ...........................................244

LECTURE 34Alternatives to Net Present Value ...................................................252

LECTURE 35 ..........................................259

LECTURE 36How to Value a Company’s Stock ..................................................267

Critical Business Skills: Organizational Behavior

Scope .............................................................................................279

LECTURE 37Achieving Results in Your Organization..........................................281

LECTURE 38The Value of Great Leadership .......................................................288

LECTURE 39Emotional Intelligence in the Workplace .........................................295

LECTURE 40The Art of Effective Communications .............................................303

LECTURE 41The Motivation-Performance Connection .......................................310

Table of Contents

LECTURE 42Winning with Teamwork ..................................................................317

LECTURE 43Coaching—From Gridiron to Boardroom ........................................324

LECTURE 44Understanding Power Relationships ..............................................331

LECTURE 45 ..........................................................338

LECTURE 46 .............................................345

LECTURE 47Leading Real Organizational Change.............................................352

LECTURE 48Lifelong Learning for Career Success ............................................359

Critical Business Skills: Marketing

Scope .............................................................................................369

LECTURE 49.........................................................................371

LECTURE 50How to Segment a Market ..............................................................377

LECTURE 51Targeting a Market Segment ..........................................................384

LECTURE 52Positioning Your Offering ................................................................391

Table of Contents

LECTURE 53Identifying Sources of Sales Growth ..............................................398

LECTURE 54Deriving Value from Your Customers ..............................................405

LECTURE 55...........................................412

LECTURE 56The Tactics of Successful Branding ................................................419

LECTURE 57Customer-Focused Pricing .............................................................426

LECTURE 58Marketing Communications That Work ..........................................433

LECTURE 59The Promise and Perils of Social Media.........................................439

LECTURE 60Innovative Marketing Research Techniques ...................................446

....................................................................................454

SUPPLEMENTAL MATERIAL

by law.

Disclaimer


Michael A. Roberto, D.B.A.

1


Scope:

S

Scop

e

2

Strategy Is Making ChoicesLecture 1

A

The Field of Business Strategy

an ancient Chinese military treatise, The Art of War, written by Sun

th

Lect

ure

1: S

trat

egy

Is M

akin

g C

hoic

es

Organizational Performance

investors are getting attractive returns, others will try to imitate

Strategic Planning

effect on the weather that follows, but it makes those who engage in

In many corporate strategic planning processes, discussions focus more on

6

Lect

ure

1: S

trat

egy

Is M

akin

g C

hoic

es

sustain it.

but you must begin with a clear set of choices. You must know the

7

The authors of Playing to Win

Competition

the management team or how great the strategy.

8

Lect

ure

1: S

trat

egy

Is M

akin

g C

hoic

es

Industry Structure and Competitive Advantage

9

Playing to Win.

The End of Competitive Advantage.

1.

2.

3.

Suggested Reading

Questions to Consider

10

Lecture 2

R

The Five Forces

11

Applying the Framework: Airlines

12

forces framework is

in a systematic fashion.

tastes or technology are changing in a substantial way, the framework

You can also use the framework to think about how you

centers have been seen as an attractive business, but in fact, overall, this

The Spectrum of Competition

social welfare.

Steps in a Five Forces Analysis

Crafting Strategy with the Five Forces

Common Mistakes with the Framework

the future. Some managers might also ignore the full range of substitutes.

the wine business, while in France, there are more than 200,000

16

Co-opetition.

Porter, Competitive Strategy.

1.

2.

3.

Suggested Reading


17

The Danger of StraddlingLecture 3

Creating Economic Value

create more economic value than your rivals.

that they get.

18

Lect

ure

3: T

he D

ange

r of S

trad

dlin

g

Fundamental Strategy Choices

, offering a

Competitive Advantage

19

to achieve.

or low cost may be able to

to sell a vehicle at a high

achieve lower costs than the

vehicles. Similarly, another A high-end clothing store might generate high gross margins, have higher expenses, and

than a more mainstream retailer.

20

Lect

ure

3: T

he D

ange

r of S

trad

dlin

g

categories. Target has lower inventory turns because it sells

Competitive Strategies

strategies:

a much narrower target market than major airlines.

21

Competitive Advantage as a System

22

Lect

ure

3: T

he D

ange

r of S

trad

dlin

g

environment changes.

judo strategy

Threats to Competitive Advantage

Montgomery, The Strategist.

Porter, Competitive Advantage.

Judo Strategy.

1.

2.

3.

Suggested Reading


Lect

ure

4: W

hat T

rade

r Joe

’s D

oesn

’t D

o

What Trader Joe’s Doesn’t DoLecture 4

S

The Importance of Trade-Offs

Preventing Imitation

Mitigating Negative Forces

26

Lect

ure

4: W

hat T

rade

r Joe

’s D

oesn

’t D

o

The Growth Trap The growth trap

sales aggressively.

27

A Dual Advantage Strategy?

28

Lect

ure

4: W

hat T

rade

r Joe

’s D

oesn

’t D

o

confuse the term differentiation with the general notion of being

generic strategies framework, differentiation meant creating a larger

Blue Ocean Strategy

29

Homogenization

but in the end, the products are just commodities; they’re not truly differentiated.

Lect

ure

4: W

hat T

rade

r Joe

’s D

oesn

’t D

o

.

Moon, Different.

1.

2.

3.

Suggested Reading


Lecture 5

F

Sources of First-Mover Advantage

however, the lower costs are not the result of more units being

value to offer.

array of customers.

Countering Conventional Wisdom

Such costs are known as

Fast followers

begins to evolve.

. They

if the cost of imitation is high.

Economies of Scale

believe that bigger is better because that has

much of the 20th century.

Large companies may sometimes overestimate the importance of economies of scale and fail to realize the disadvantages they have relative to start-ups and entrepreneurs.

Learning Curves

what scholars call

Network Effects

starts to turn negative.

Diminishing First-Mover Advantage?

freemium business model

Free.

Information Rules.

1.

2.

3.

Suggested Reading


Lecture 6

Disruptive versus Incremental Innovation

.

disruptive innovation

from 1976 through 1992, watching as a series of technological

one generation of technology often were not able to maintain

Challenges in the Face of Disruption

research focuses on gathering

make to increase customer

think in terms of totally new

criteria for allocating their As Blockbuster learned, conducting market research

result in incremental innovation; it doesn’t help you foresee disruptive innovation.

strongly resistant to giving this new technology the resources

The Long Tail The long tail

of Wired

any song or movie available even if there is only one customer who wants it.

same network effect.

Reacting to Disruptive Innovation

The Long Tail.

Christensen, The Innovator’s Dilemma.

1.

2.

3.

Suggested Reading


Lect

ure

7: A

ntic

ipat

ing

Your

Riv

al’s

Res

pons

e

Anticipating Your Rival’s ResponseLecture 7

Analyzing Competitors

Economic Motives

to move into the market or not. The incumbent also faces a choice:

Lect

ure

7: A

ntic

ipat

ing

Your

Riv

al’s

Res

pons

e

the incumbent will retaliate aggressively, then entering the market

. Ask yourself what

of customers.

Rynair and British Airways

for the incumbent.

Lect

ure

7: A

ntic

ipat

ing

Your

Riv

al’s

Res

pons

e

such situations.

aggressively to one segment of customers but maintain higher

NutraSweet and Holland Sweetener

Lect

ure

7: A

ntic

ipat

ing

Your

Riv

al’s

Res

pons

e

The Art of Strategy.

1.

2.

3.

Suggested Reading


Why Did Disney Buy Pixar?Lecture 8

T

Horizontal and Vertical Integration

refers to a situation in which a

Lect

ure

8: W

hy D

id D

isne

y B

uy P

ixar

?

Forward integration

economists call

leveraging them to enhance the value of its television

Put another way, economies

business unit enjoys either a

or lower costs because of its Disney believes that its theme

as part of the Disney family than

company.

its own.

of businesses.

Lect

ure

8: W

hy D

id D

isne

y B

uy P

ixar

?

Transaction Costs Just looking at synergy alone is not enough in thinking about

Lect

ure

8: W

hy D

id D

isne

y B

uy P

ixar

?

Toy Story

Corporate Strategy.

.

1.

2.

3.

Suggested Reading


Lecture 9

C

in focus.

its market value to its breakup value

A results when the whole is worth less than

60

classify its business units by looking at two basic measures:

mainstream business.

Low Market Share High Market Share

Slow Growth Dog Cash Cow

Fast Growth Question Mark Star

61

Governance Economies

using a common management system across all the businesses. The

so on.

th

but each of its businesses was in manufacturing, each was in a fairly

62

institutional voids

Intermediaries are economic entities that insert themselves between

Consumer Reports, may enable

the U.S. economy bore a closer resemblance to an emerging

Competing for Advantage.

Winning in Emerging Markets.

Stewart, The Quest for Value.

1.

2.

3.

Suggested Reading


Lecture 10

C

economic sense.

Types of Vertical Integration

66

Disney’s Integration Decision

st century, the chain

67

Rationale for Vertical Integration

information that they might otherwise not have access to, such as

68

Costs of Vertical Integration

Partial Integration

chosen tapered or partial integration

69

Declining Trends in Integration

Case Study: Zara

small batches for its stores.

71

Harrigan, .

1.

2.

3.

Suggested Reading


72

Lect

ure

11: M

erge

rs a

nd A

cqui

sitio

ns—

The

Win

ner’s

Cur

se

Mergers and Acquisitions—The Winner’s CurseLecture 11

M

Overview of Mergers and Acquisitions (M&A)

Valuing Target Firms

Lect

ure

11: M

erge

rs a

nd A

cqui

sitio

ns—

The

Win

ner’s

Cur

se

The Winner’s Curse

acquisition of a business—inevitably pays more than the underlying real value of the asset up for sale.

Cost versus Revenue Synergies

brought together.

76

Lect

ure

11: M

erge

rs a

nd A

cqui

sitio

ns—

The

Win

ner’s

Cur

se

Herd Behavior

77

those three.

78

Lect

ure

11: M

erge

rs a

nd A

cqui

sitio

ns—

The

Win

ner’s

Cur

se

Bruner, Deals from Hell.

Thaler, The Winner’s Curse.

1.

2.

3.

Suggested Reading


79

Launching a Lean Start-UpLecture 12

MThe Marshmallow Challenge

80

Lect

ure

12: L

aunc

hing

a L

ean

Star

t-Up

to a taller structure.

Peter Skillman, the creator of the marshmallow challenge, once

in launching new ventures, as well.

The Lean Start-Up

81

about it.

82

Lect

ure

12: L

aunc

hing

a L

ean

Star

t-Up

The MVP Strategy in Large Firms

Lean Start-Ups in Today’s Environment

launch your business. Further,

has generally become easier.

research over the years on

start-

launching new ventures.

Yelp pivoted from its initial incarnation as a system for emailing recommendation requests to

of restaurants and local businesses.

Lect

ure

12: L

aunc

hing

a L

ean

Star

t-Up

Gaining Investors

.

Breakthrough Entrepreneurship.

Ries, The Lean Startup.

Suggested Reading

1.

2.

3.



Thomas J. Goldsby, Ph.D.

89


Scope:

T

Scop

e

90

91

Lecture 13

Vision and Market Strategy

market strategies from which a business might choose: low cost,

92

Some high-end carmakers employ a differentiation strategy, seeking to distance themselves from competitors based on higher levels of comfort, performance, and aesthetics.

Operations Strategy

age of the business. Businesses in their infancy usually start with

behalf (

97

Operations Management in the Supply Chain.

Operations Rules.

1.

2.

3.

Suggested Reading


98

Lect

ure

14: L

eane

r, M

eane

r Pro

duct

ion

Leaner, Meaner ProductionLecture 14

Aactivity in all of business, transforming the useless into the useful.

The “Make-vs.-Buy” Decision

charge for its services.

investments with the increasing sales volume, but you might

99

It’s estimated that the global market for contract manufacturing in electronics is more than $450 billion.

100

Lect

ure

14: L

eane

r, M

eane

r Pro

duct

ion

Outsourcing Considerations

offshoring

Manufacturing Strategies

, or a strategy

101

.

by with lower inventories.

assemble-to-order, , or

102

Lect

ure

14: L

eane

r, M

eane

r Pro

duct

ion

their cars.

The fourth manufacturing strategy is the make-to-order strategy.

the buy-to-order strategy

investments other than inventory.

having more than enough inventory to cover any shortfalls or

Developments in Production Operations

form-on-the-spot.

Lect

ure

14: L

eane

r, M

eane

r Pro

duct

ion

nearshoringreshoring

to serve.

Nearshoring

Reshoringback home.

1.

2.

3.

Suggested Reading


106

Lecture 15

Services The term

concrete.

107

Assessing Services

108

Process Improvement: Lean Thinking

has

Arguably, building relationships is of much greater importance in service

109

standard work. This involves

takt time. Takt

refers to the amount of time

110

customers in 8 hours.

services knows is that if you have to staff a business at all times

heijunka

111

will be variation in outcomes.

Service-Dominant Logic (SDL)

is

112

outcomes reliably.

.

.

Suggested Reading

1.

2.

3.


Lect

ure

16: M

atch

ing

Supp

ly a

nd D

eman

d

Matching Supply and DemandLecture 16

SBackground on Sales and Operations Planning (S&OP)

S&OP suggests, the key function

The goal of the monthly S&OP team meeting is for all parties to arrive at

116

Lect

ure

16: M

atch

ing

Supp

ly a

nd D

eman

d

Sales Forecasting

one to three months. Sales forecasts come in one of two varieties:

117

absence of this information, they might use historical sales of

simple average

The moving average

Exponential smoothingalpha

value, or

The regression analysis

118

Lect

ure

16: M

atch

ing

Supp

ly a

nd D

eman

d

Capacity Planning

the sales forecast.

119

Integrated S&OP

,

Demand

InventoryPlan.

120

Lect

ure

16: M

atch

ing

Supp

ly a

nd D

eman

d

of integrated business planning

Demand

Capacity

InventoryPlan

planning; in the event of increases in Demand, moving the Plan closer to

Capacity and Inventory.

121

B Time Series Analysis.

Sales and Operations Planning.

1.

2.

Suggested Reading


122

Lect

ure

17: R

ight

sizi

ng In

vent

ory

Rightsizing InventoryLecture 17

Inventory Management Metrics

of , or . The more inventory a

inventory turns. This measure can be

generate more sales on lower inventory has a higher number of

as gross margin return on inventory

Product Proliferation

Lect

ure

17: R

ight

sizi

ng In

vent

ory

Inventory Management Strategies There are four basic inventory management strategies. These

With today’s inventory-tracking technologies, many companies monitor inventory at all times and manage accordingly.

.

, or P-system, where P period of review. This strategy is also

.

Q-system,

is known as the

just-in-time strategy.

126

Lect

ure

17: R

ight

sizi

ng In

vent

ory

kanban

versions of these systems are known as e-kanbans.

Choosing the Best Strategy

127

Finally, C items are those that are on their way out. They

becoming .

Innovations in Inventory Management

128

Lect

ure

17: R

ight

sizi

ng In

vent

ory

about inventory.

RFID.

.

1.

2.

3.

4.

Suggested Reading


129

Managing Supply and SuppliersLecture 18

The Evolution of Supply Management

Lect

ure

18: M

anag

ing

Supp

ly a

nd S

uppl

iers

outsource activities that they no longer view as their strengths,

Centralized and Decentralized Supply Management

locations controlling the buying actions. Such arrangements try

Supplier Relationship Strategies

Lect

ure

18: M

anag

ing

Supp

ly a

nd S

uppl

iers

Selecting Suppliers

Total Cost of Ownership

known as the

Keeping Suppliers Engaged

Lect

ure

18: M

anag

ing

Supp

ly a

nd S

uppl

iers

customer. Such assessments

supply

Providing a scorecard for supplier performance should serve as a conversation starter, enabling both parties to see the potential for improvement and

relationship.

Chain Management.

Tate, .

1.

2.

3.

4.

Suggested Reading


Lect

ure

19: T

he L

ong

Rea

ch o

f Log

istic

s

The Long Reach of LogisticsLecture 19

L

Distribution

The business of logistics is substantial: About $1.4 trillion is spent each year in the United States alone to support the storage and transportation of goods.

intensive distribution

distribution

Logistics Networks The term refers to the locations from which a

Lect

ure

19: T

he L

ong

Rea

ch o

f Log

istic

s

just science but art.

to customers by establishing a store or warehouse location

greatest reach with the fewest facilities. The goal here is the

gravity from military strategists.

of vulnerability.

locations to a logistics network. For instance, more facilities means

its network.

, which is

The

a market is

Lect

ure

19: T

he L

ong

Rea

ch o

f Log

istic

s

Operational Factors

to customers or store locations. Here, the focus is on the , or lead time

intermodal transportation.

Lect

ure

19: T

he L

ong

Rea

ch o

f Log

istic

s

2014.

.

.

1.

2.

3.

Suggested Reading


Rethinking Your Business ProcessesLecture 20

use

defensible value

The Voice of the Customer and the Voice of Business

voice of the business. The voice of the customer tells us what

therefore, value

Lect

ure

20: R

ethi

nkin

g Yo

ur B

usin

ess

Proc

esse

s

Process Mapping

a

swim lane

Cus

tom

er

Research Ticket

Buy Ticket

Prepare and Pack

Get Luggage

PT: 10 minWT: 2 daysFTQ: 80%Avail.: 98%Value: NO

PT: 10 minWT: 3 wksFTQ: 95%Avail.: 99%Value: NO

PT: 1 minWT: 0–30 minFTQ: 98%Avail.: 98%Value: YES

Tick

et C

ount

er Get Boarding Pass

PT: 5 minWT: 0–1 hrFTQ: 98%Avail.: 95%Value: NO

Secu

rity

Clear Security


Con

cour

se

Walk to Gate


Boa

rdin

g G

ate Board

PlaneFly to

DestinationPT: 3 minWT: 0–30 minFTQ: 99.9%Avail.: 99%Value: NO

PT: 2 hrWT: 0FTQ: 100%Avail.: 99%Value: YES

c

DD

Lect

ure

20: R

ethi

nkin

g Yo

ur B

usin

ess

Proc

esse

s

Process Time, Wait Time, and Cycle Time

for

FTQ refers

refers to the

availability suffers somewhat at the ticket counter, the security

Lect

ure

20: R

ethi

nkin

g Yo

ur B

usin

ess

Proc

esse

s

is not out of the norm for such an analysis.

value stream map

future state map

.

Martichenko, Everything I Know about Lean I Learned in First Grade.

Learning to See.

1.

2.

3.

Suggested Reading


Lect

ure

21: M

easu

ring

Ope

ratio

nal P

erfo

rman

ce

Measuring Operational PerformanceLecture 21

A

The Balanced Scorecard

that

Financial Performance

of inventory, on average, then you achieve 10

inventory while still serving the customer well allows you to

in the business. Retail

a similar measure for

insights, both for those outside and inside a business.

Lect

ure

21: M

easu

ring

Ope

ratio

nal P

erfo

rman

ce

Customer Assessment Customer satisfaction is the most common measure for the

.

to others.

these measures almost always involve asking the customer how

of satisfaction.

Internal Business Processes

Lect

ure

21: M

easu

ring

Ope

ratio

nal P

erfo

rman

ce

that seeks to eliminate waste in its various forms throughout the

DMAIC method

measure

million opportunities

Learning and Growth

Cannibals with Forks

to sustain itself economically.

Lect

ure

21: M

easu

ring

Ope

ratio

nal P

erfo

rman

ce

Making Sustainability Work.

1.

2.

Suggested Reading


Keeping an Eye on Your MarginsLecture 22

T

is what marketers call

marketers may still have a customer count that numbers in the

Lect

ure

22: K

eepi

ng a

n Ey

e on

You

r Mar

gins

80-20 rule

not sales.

Differential Resource Consumption

out which customers force a business to consume what resources. To

arrive at an average cost.

Cost-to-Serve Analysis

160

Lect

ure

22: K

eepi

ng a

n Ey

e on

You

r Mar

gins

activities consume resources.

Activity-Based Costing

follows suit.

161

the cost object went away.

162

Lect

ure

22: K

eepi

ng a

n Ey

e on

You

r Mar

gins

Using the Analysis

where your business is

transaction for which you

unless you have other

waiting in the wings. A better solution is to make

the service more cost effectively.

memberships represent one approach to offering differential pricing in business-to-consumer marketing.

.

.

1.

2.

Suggested Reading


Lect

ure

23: L

ever

agin

g Yo

ur S

uppl

y C

hain

Leveraging Your Supply ChainLecture 23

A

Supply Chain Management as a Team Sport

reach the market until almost two years after Truvia.

Understanding the Network Structure

of its customers.

166

Lect

ure

23: L

ever

agin

g Yo

ur S

uppl

y C

hain

PAB BA

167

Forming Strategic Relationships

whether to work with Starbucks, the coffee giant was a small, local

168

Lect

ure

23: L

ever

agin

g Yo

ur S

uppl

y C

hain

but into the future.

returns management.

involvement of all business functions if an SCM team is to make

169

makes internal integration more challenging. However, they may

that warrant the investment.

customers include improved economic returns, innovation,

170

Lect

ure

23: L

ever

agin

g Yo

ur S

uppl

y C

hain

Lambert, Supply Chain Management.

1.

2.

3.

Suggested Reading


171

Reducing Risk, Building ResilienceLecture 24

A

Internal Risks

business strategists often use a SWOT analysis

failure

172

Lect

ure

24: R

educ

ing

Ris

k, B

uild

ing

Res

ilien

ce

failure mode

is an outcome or

factors that call for the greatest attention.

three scores is the risk priority number

risk factors.

Your Organization

Supplier 1 Customer 1

Customer 2

Customer 3

Customer 4

Customer 5

Customer 6

Customer 7

Supplier A

Supplier A

Supplier BCustomer ACustomer B

Customer A

Customer A

Customer B

Supplier ASupplier BSupplier C

Supplier 2

Supplier 3

Supplier 4

Lect

ure

24: R

educ

ing

Ris

k, B

uild

ing

Res

ilien

ce

these materials here.

in China, where environmental laws are not so stringently

176

Lect

ure

24: R

educ

ing

Ris

k, B

uild

ing

Res

ilien

ce

tier 2.

Environmental Risks

177

The name of the game in risk management is usually to offset an

1.

2.

3.

Suggested Reading



Eric Sussman, M.B.A.

181


Scope:

A

Scop

e

182

Accounting and Finance—Decision-Making ToolsLecture 25

T

Lect

ure

25: A

ccou

ntin

g an

d Fi

nanc

e—D

ecis

ion-

Mak

ing

Tool

s

more.

Standard Accounting Disclosures

.

In addition to public companies, many other organizations, including

186

Lect

ure

25: A

ccou

ntin

g an

d Fi

nanc

e—D

ecis

ion-

Mak

ing

Tool

s

Although the income statement tells us about an

be material.

187

also serves as a crucial link to valuation.

Accounting Myths

accounting rules.

Unfortunately, there is no single measure that allows an overall

188

Lect

ure

25: A

ccou

ntin

g an

d Fi

nanc

e—D

ecis

ion-

Mak

ing

Tool

s

sheet entirely.

189

in life.

Analysis

Valuation

1.

2.

recent year.

Suggested Reading


190

Lecture 26

Balance Sheet Overview

statements, can be

website, in the investor relations section.

Even individual households should have a sense of their assets and debts to

appropriately, and plan for the future.

191

the .

of the balance sheet.

Current Assets

192

from a bank, or a U.S. treasury bill.

sheet.

as a reserve against those receivables.

Long-Term Assets

is greater than current liabilities.

196

Analysis

Valuation

1.

2.

Suggested Reading


197

Consolidated Balance Sheet: IntelDecember 28, 2013 and December 29, 2012 (In Millions, Except Par Value) 2013 2012

AssetsCurrent assets:

Cash and cash equivalents $ 5,674 $ 8,478 Short-term investments 5,972 3,999 …

accounts of $38 ($38 in 2012) 3,582 3,833 …Other current assets 1,649 2,512

Total current assets 32,084 31,358 Property, plant and equipment, net 31,428 27,983 …

10,513 9,710 5,150 6,235

Other long-term assets 5,489 4,148 Total assets $ 92,358 $ 84,351

Liabilities and stockholders’ equity

$ 281 $ 312 2,969 3,023

…Total current liabilities 13,568 12,898 Long-term debt 13,165 13,136 …Stockholders’ equity:

…Retained earnings 35,477 32,138

Total stockholders’ equity 58,256 51,203 Total liabilities and stockholders’ equity $ 92,358 $ 84,351

Intel’s consolidated balance sheet combines all of the company’s operations

198

Lect

ure

27: W

hy th

e In

com

e St

atem

ent M

atte

rs

Why the Income Statement MattersLecture 27

announcements that often focus on a few key metrics: revenue, gross margin,

Measuring Income

accounting in generating income statements. As a result, the

revenue when:

199

later time.

200

Lect

ure

27: W

hy th

e In

com

e St

atem

ent M

atte

rs

Organization and Structure of Income Statements

Revenues

201

earnings before interest and tax expense

202

Lect

ure

27: W

hy th

e In

com

e St

atem

ent M

atte

rs

Street analysts.

Key Questions

EBITDA From the numbers on the income statement, we are able to calculate

earnings before

of your mortgage, the answer here is generally no. This is an

Lect

ure

27: W

hy th

e In

com

e St

atem

ent M

atte

rs

Analysis

Valuation

1.

Suggested Reading


2.

Income Statement: Apple Inc.

September 28, 2013

September 29, 2012

Net sales $ 107,910 $ 156,508Cost of sales (1) 106,606 87,846

Gross margin 64,304 68,662

Research and development (1) 4,475 3,381Selling, general and administrative (1) 10,830 10,040

15,305 13,421

Operating income 48,999 55,2411,156 522

50,155 55,76313,118 14,030

Net income $ 37,037 $ 41,733

Earnings per share:Basic $ 40.03 $ 44.64Diluted $ 39.75 $ 44.15

type of disclosure.

206

Lecture 28

T

really is king in valuation.

the sale.

although the actual cash from the sale will come later. But what if

207

to collect their receivables.

208

Operating Cash Flow

209

Investing Cash Flow

All companies need to make some investment in capital expenditures, such as

210

reinvest at least some amount of cash into the business to maintain

valuation of stocks.

own a right to or an interest in.

211

Financing Cash Flow

in the market.

Reviewing the Statement of Cash Flows

from year to year.

212

Analysis

Valuation

1.

2.

Suggested Reading


Common Size, Trend, and Ratio AnalysisLecture 29

Common Size Analysis

Lect

ure

29: C

omm

on S

ize,

Tre

nd, a

nd R

atio

Ana

lysi

s

operating leverageit mostly consists of

sales commissions.

Trend Analysis

Line ItemReported in 2013

Converted to Percentage

Revenues $ 84.2 B 100.0%COGS $ 42.4 B 50.4%*Operating income (operating margin) $ 14.5 B 17.2%Net income (net margin) $ 11.3 B 13.4%

Line Item P&G 2013 P&G 2012Colgate-

Palmolive 2013Gross margin 49.6% 49.3% 58.6%Operating margin 17.2% 15.9% 20.4%Net margin 13.4% 12.9% 12.9%

because costs were growing faster than sales revenue.

Applying Analyses to Other Financial Statements

216

Lect

ure

29: C

omm

on S

ize,

Tre

nd, a

nd R

atio

Ana

lysi

s

billion in 2011, an increase of about 12%.

.

.

or (turnover ratios

Leverage or , measuring the overall riskiness

obligations.

Market ratios, which serve as a link between accounting

217

current liabilities.

, which

receivables from customers.

The inventory turnover ratio turns over or sells its inventory. The formula is similar to that for

The

return on investment return on assets

218

Lect

ure

29: C

omm

on S

ize,

Tre

nd, a

nd R

atio

Ana

lysi

s

Leverage and Market Ratios

219

, which is

market value to total revenues, known as the .

Analysis

1.

2.

Suggested Reading


220

Lecture 30

Bor offering a new service, managers must ask: How many units of

because the goal of any business is not just to break even,

Types of Costs

changing levels of activity.

221

or loss

222

formula is:

margin

contributions that every sale makes.

much business each month.

night, you have some available rooms. A traveler walks in, asks

226

Recall the breakeven formula:

target ticket sales at about 8,200 fans, but we know that concert

Breakeven Analysis.

Cost Management

Suggested Reading

227

1.

2.


228

Lect

ure

31: U

nder

stan

ding

the

Tim

e Va

lue

of M

oney

Understanding the Time Value of MoneyLecture 31

A Dollar Today versus a Dollar Tomorrow

229

Compounding

on your original investment but on any return that investment has

present value future value

Lect

ure

31: U

nder

stan

ding

the

Tim

e Va

lue

of M

oney

Single Cash Flows

follows:

by CF i

t.

t

Annuities

formula is shown below:

Amount of annuity ×

Lect

ure

31: U

nder

stan

ding

the

Tim

e Va

lue

of M

oney

consistently over time. The formula is:

Growing Annuities

useful life.

formula is shown below:

g

g

ti

the numbers, we get:

1 (1+ .05)5

(1+ .1)5

(0.1 0.05)

make the investment.

Perpetuities and Growing Perpetuities

th century known as a

owners forever.

Lect

ure

31: U

nder

stan

ding

the

Tim

e Va

lue

of M

oney

Amount of constant annuityi

CF1

.

A piece of real estate that is likely to stay fully leased in perpetuity, such as an

an asset is 8%.

,

,

1.

2.

Suggested Reading


Lecture 32

A

Historical Asset Performance Data

Equity and Bond Market Returns, 1926–2013

Asset ClassAverage

Annual ReturnStandard Deviation

of ReturnsLarge-cap domestic stocks 12.1% 20.2%Small-cap domestic stocks 16.9% 32.3%

6.3% 8.4%5.9% 9.8%3.5% 3.1%3.0% 4.1%

other category of investment.

higher risk, the fact that you assume greater risk in an investment

answer is no.

.

market risk.

Beta Beta (

have a

x

about the historical returns of the overall market, we can estimate

Capital Asset Pricing Model

overall market.

overall market, which means it has a

.

or 6%.

Using CAPM

investors try to match the market, not beat it, while active investors

alpha.

value size

,

Valuation

Suggested Reading

1.

2.


Lecture 33

Structure of Investment Opportunities

of net present value

X

generally make sense.

Accounting or Book Rate of Return

NPV Formula

.

formula:

CFtCF0

Assessing an Investment

Year Robot MRI Dialysis0 ($1,500,000) ($1,500,000) ($1,500,000)1 $200,000 $300,000 $500,0002 $300,000 $400,000 $500,0003 $400,000 $600,000 $500,0004 $500,000 $650,000 $500,0005 $650,000 $750,000 $500,000

Surgical RobotYear

0 1 2 3 4 5($1,500,000) $200,000 $300,000 $400,000 $500,000 $650,000

Present value @ 10% ($1,500,000) $181,818 $247,934 $300,526 $341,507 $403,599NPV ($24,616)

is less than 0, the investment is not worth making because it will

Rules for Calculating NPV

MRIYear

0 1 2 3 4 5($1,500,000) $300,000 $400,000 $600,000 $650,000 $700,000

Present value @ 10% ($1,500,000) $272,727 $330,579 $450,789 $443,959 $434,645NPV ($432,698)

DialysisYear

0 1 2 3 4 5($1,500,000) $500,000 $500,000 $500,000 $500,000 $500,000

Present value @ 10% ($1,500,000) $454,545 $413,223 $375,657 $341,507 $310,461NPV $395,393

,

Mayo,

1.

Suggested Reading


2.

Steps for Applying the NPV Formula

1.

2.

3.

4.

5.

6.

Lect

ure

34: A

ltern

ativ

es to

Net

Pre

sent

Val

ue

Alternatives to Net Present ValueLecture 34

NPV and IRR

CFtCF0

for the missing variable, i.

Calculating IRR

You estimate that the investment will generate net income

Lect

ure

34: A

ltern

ativ

es to

Net

Pre

sent

Val

ue

Limitations of IRR

than the former.

reinvestment risk.

Lect

ure

34: A

ltern

ativ

es to

Net

Pre

sent

Val

ue

Equity Multiples

Project NPVInvestment Required PI

A $90,000 $900,000 0.100B $125,000 $1,100,000 0.114C $65,000 $500,000 0.130D $25,000 $500,000 0.050E $60,000 $400,000 0.150

Lect

ure

34: A

ltern

ativ

es to

Net

Pre

sent

Val

ue

,

Analysis

Valuation

1.

2.

Suggested Reading


Initial Investment Year 1 Year 2 Year 3

$25,000 $2,000 $3,000 $27,000

Weighing the Costs of Debt and EquityLecture 35

or a combination of the two can, in fact, affect the overall value

260

Lect

ure

35: W

eigh

ing

the

Cos

ts o

f Deb

t and

Equ

ity

investor might earn.

less risk.

262

Lect

ure

35: W

eigh

ing

the

Cos

ts o

f Deb

t and

Equ

ity

Kd

formula: Kd i t i t

Ke

follows: Ke Rf

Weighted Average Cost of Capital

mortgage has an interest

some stocks, which you investment decision, both in business and in our personal lives.

such transactions.

Lect

ure

35: W

eigh

ing

the

Cos

ts o

f Deb

t and

Equ

ity

Ke = Kd E D V E + D t

Using WACC

,

Mayo,

Suggested Reading

266

Lect

ure

35: W

eigh

ing

the

Cos

ts o

f Deb

t and

Equ

ity

1.

2.


267

Lecture 36

A

Reviewing Terms

might have.

268

Fundamental Analysis fundamental

analysis

an accounting metric. Some common valuation metrics involve the

269

Discounted Cash Flow Analysis

270

routinely emerge.

271

Dividend Discount Model

272

Plugging in the numbers, we get:

.

Computing Free Cash Flows

that it will continue to grow at a rate in line with the overall

Here, g

,

Analysis

The Little Book of Valuation.

Valuation

1.

2.

Suggested Reading



Clinton O. Longenecker, Ph.D.

279


Scope:

make going to work a blessing or a curse.

Scop

e

280

the 21st century.

281

Achieving Results in Your OrganizationLecture 37

HThe Field of Organizational Behavior

st century.

The Busyness Continuum

282

Lect

ure

37: A

chie

ving

Res

ults

in Y

our O

rgan

izat

ion

ongoing activity

st

to be doing to succeed in your position.

S.T.O.P. Being So Busy

S

T

Oreally matter.

Pto make sure that you are meeting your goals.

Strategic S.T.O.P.

Lect

ure

37: A

chie

ving

Res

ults

in Y

our O

rgan

izat

ion

critical channels of communication with him or her. Most bosses

Daily S.T.O.P.

what activities you can take off your list.

286

Lect

ure

37: A

chie

ving

Res

ults

in Y

our O

rgan

izat

ion

Make Planning Routine

Lencioni, The Advantage.

Getting Results.

Suggested Reading

287

1.

2.

3.

4.


288

Lect

ure

38: T

he V

alue

of G

reat

Lea

ders

hip

The Value of Great LeadershipLecture 38

The Importance of Leadership

289

Two Components of Effective Leadership

290

Lect

ure

38: T

he V

alue

of G

reat

Lea

ders

hip

balance their concern for the task of getting results with a genuine

affect their followers.

This school embraces the The Seven

This school cites a

291

Focusing on the Mission and Results

292

Lect

ure

38: T

he V

alue

of G

reat

Lea

ders

hip

shoe business. But because of his uncanny ability to get scientists to

Preparing Followers

that everyone knows what is coming.

late 19th th centuries.

Integrity and Transparency

The Work-Life Balance, Passion, and Mojo

Lect

ure

38: T

he V

alue

of G

reat

Lea

ders

hip

are changing.

Managing for Results.

Results-Based Leadership.

1.

2.

3.

4.

Suggested Reading


Emotional Intelligence in the WorkplaceLecture 39

The Importance of Good Relationships

296

Lect

ure

39: E

mot

iona

l Int

ellig

ence

in th

e W

orkp

lace

Organizational Networking

Effective 360-Degree Working Relationships 360-degree working

relationships

a healthy, sustainable way. The 360-degree

297

Research for the book Getting Results

First, there is the relationship

working

Analyzing Your Work Relationships

using the following categories: Non-working relationships

298

Lect

ure

39: E

mot

iona

l Int

ellig

ence

in th

e W

orkp

lace

Strained working relationships

Positive working relationships involve folks we get along

Great working relationships are strong connections where we

working together.

beginning of something that only gets uglier. More often, though,

299

Developing Emotional Intelligence

.

Dimension 1: Self-Awareness

Lect

ure

39: E

mot

iona

l Int

ellig

ence

in th

e W

orkp

lace

Dimension 2: Self-Management

of success.

Dimension 3: Social Awareness

Dimension 4: Relationship Management Skills

sustainable ways.

working together.

Primal Leadership.

Suggested Reading

Lect

ure

39: E

mot

iona

l Int

ellig

ence

in th

e W

orkp

lace

1.

2.

3.

4.


The Art of Effective CommunicationsLecture 40

L

work altogether.

Lect

ure

40: T

he A

rt o

f Effe

ctiv

e C

omm

unic

atio

ns

Getting Through

on our job satisfaction,

any of these three basic

focus from getting things

seeking out the information

someone who will listen to their concerns.

Ironically, the sheer number of communication technologies available today can make it more

communicate effectively with one another.

genius to establish a highly effective communication system.

Lect

ure

40: T

he A

rt o

f Effe

ctiv

e C

omm

unic

atio

ns

information they want

Lect

ure

40: T

he A

rt o

f Effe

ctiv

e C

omm

unic

atio

ns

Lessons for Effective Communication

as a communicator:

everyone you work with, from your boss, to your colleagues,

Carnegie, .

The Art of Engagement.

1.

2.

3.

4.

Suggested Reading


Lect

ure

41: T

he M

otiv

atio

n-Pe

rfor

man

ce C

onne

ctio

n

The Motivation-Performance ConnectionLecture 41

M

The Importance of Motivation

motivation:

Key Motivational Practices

Lect

ure

41: T

he M

otiv

atio

n-Pe

rfor

man

ce C

onne

ctio

n

The Performance Equation

, which is: f

Strategies for Workplace Motivation

Lect

ure

41: T

he M

otiv

atio

n-Pe

rfor

man

ce C

onne

ctio

n

they treat it much better than if it belongs to someone else.

teamwork throughout your

you not only create a climate for effective motivation, but you also increase the

great job of clarifying goals

One of the hallmarks of high-performance organizations is

promote and encourage

the way.

1001 Ways to Reward Employees.

Suggested Reading

Lect

ure

41: T

he M

otiv

atio

n-Pe

rfor

man

ce C

onne

ctio

n

1.

2.

3.

4.


Lecture 42

Cooperation and Teamwork

work together to get there.

teamwork

interests together.

The term teamwork team, which just might

make them one.

th century, when the teme

toom

team

complement each other’s.

turnover is lower, commitment to fellow workers is greater,

th

States, Abraham Lincoln.

A Team of Rivals

Critical Gateways to Cooperation and Teamwork

job, as well.

team members learn how to communicate more effectively with one

Team of Rivals.

Lencioni, .

1.

2.

Suggested Reading


3.

4.

Lect

ure

43: C

oach

ing—

From

Grid

iron

to B

oard

room

Coaching—From Gridiron to BoardroomLecture 43

Effective Coaching Research shows that Pat was on to something: A survey of U.S.

that effective coaching was critical to their success. An even larger

But the most telling result of the survey was the following: 80% of

make the time for coaching.

Pat’s Solution

coaching sessions with a consultant. Pat was smart enough to

change his own behavior.

winning

a work unit.

Lect

ure

43: C

oach

ing—

From

Grid

iron

to B

oard

room

f (talent × motivation ×

Going Forward

not going well.

Coaching on the Individual Level

If you don’t understand an employee’s role in an organization, coaching can

Lect

ure

43: C

oach

ing—

From

Grid

iron

to B

oard

room

your coaching role as being that of a nurturer. That is to say, as a

means termination.

this action.

Pat’s Conclusion

successful coach.

Lect

ure

43: C

oach

ing—

From

Grid

iron

to B

oard

room

1.

2.

3.

4.

Suggested Reading


Lecture 44

actions have on the

A high-ranking executive might have

Types of Power

position power, because they

category of personal power

Increasing Your Power

Understanding Your Boss

with the boss.

you know that your boss has overly aggressive goals to meet, an

Managing Your Boss

Take the initiative to make alignment sessions with your boss a

.

Behavior in Organizations.

1.

2.

3.

4.

Suggested Reading


Lecture 45

several reasons for this increase.

emotional, or both at all three of these levels, with each

of challenges.

can be challenging in some situations.

Negotiating Rationally.

.

Suggested Reading

1.

2.

3.

4.


Ethics and the Bathsheba SyndromeLecture 46

The Practicality of Ethics

Lect

ure

46: E

thic

s an

d th

e B

aths

heba

Syn

drom

e

The Origins of Ethics

Dealing with Ethical Issues

One test to see if an action is ethical is to consider its legality.

Lect

ure

46: E

thic

s an

d th

e B

aths

heba

Syn

drom

e

your instincts.

“I Don’t Know What I Was Thinking”

even illegal things if we are not vigilant.

Bathsheba syndrome

Protecting Your Ethics

temptation mapping

Lect

ure

46: E

thic

s an

d th

e B

aths

heba

Syn

drom

e

Leading at a Higher Level.

1.

2.

3.

4.

Suggested Reading


Lect

ure

47: L

eadi

ng R

eal O

rgan

izat

iona

l Cha

nge

Leading Real Organizational ChangeLecture 47

M

Drivers of Change

central challenge of change is not strategy or systems or culture. The

Lect

ure

47: L

eadi

ng R

eal O

rgan

izat

iona

l Cha

nge

the rollout.

make more money because

workforce.

resistance to change, however.

Strategy

Driving Meaningful Change

kaizen

Employees confused by a change may become resistant to it.

which is a sobering thought. That means that 80% of the time,

Change or Die

are trying to make.

Lect

ure

47: L

eadi

ng R

eal O

rgan

izat

iona

l Cha

nge

A Study on Change Initiatives The Two-Minute Drill

in charge often just going through the motions of the change effort.

against the challenge.

Still more vital elements of a successful change initiative are

their best efforts.

Leading Change.

The Two-Minute Drill.

1.

2.

Suggested Reading


Lect

ure

47: L

eadi

ng R

eal O

rgan

izat

iona

l Cha

nge

3.

4.

Lifelong Learning for Career SuccessLecture 48

Tovercome them.

The Essentiality of Learning

or her career.

Lect

ure

48: L

ifelo

ng L

earn

ing

for C

aree

r Suc

cess

Breaking through with Learning

to work.

relevant to our jobs.

Lect

ure

48: L

ifelo

ng L

earn

ing

for C

aree

r Suc

cess

Breaking through with Professional Practices

Just as in the case of your ongoing learning, once you have taken

Lect

ure

48: L

ifelo

ng L

earn

ing

for C

aree

r Suc

cess

Mentoring

mentor in our lives for the same reasons.

your success.

Blauner, .

Training Camp.

Suggested Reading

1.

2.

3.

4.



Ryan Hamilton, Ph.D.


Scope:

T

have a marketing strategy.

Scop

e

What Is Marketing?Lecture 49

The term marketing

value that customers seek.

Marketing marketing as the function of a business that creates

Lect

ure

49: W

hat I

s M

arke

ting?

creating value into something that actually creates value for the

imitation. The success of the

Types of Value

your customers will, too.

The manufacturer of the PalmPilot

complex than other personal digital assistants on the market at the time.

allows consumers to connect with others.

feel better. Sometimes, all customers are looking for from

Understanding Customers

target customers may be among them.

Lect

ure

49: W

hat I

s M

arke

ting?

marketing efforts.

naturally consonant with certain sources of value.

seek monetary value.

reasons the customer is likely to generate for his or her choice.

Key Marketing Questions

become overwhelming.

Lect

ure

49: W

hat I

s M

arke

ting?

How can you give them what they value better than

Chernev,

1.

2.

Suggested Reading


Lecture 50

segmentation analysis, each of which results in a list of customer segments

Principles of Segmentation Analysis

with any others.

Case Study in Psychographic Segmentation

Approaches to Segmentation

you start with the offering itself rather than the customers. Think of

stores to better serve these segments.

Chernev,

1.

segments, is there a way to combine insights from these segmentation

2.

Suggested Reading


Lect

ure

51: T

arge

ting

a M

arke

t Seg

men

t

Targeting a Market SegmentLecture 51

Selecting a Single Target

that by creating value for one segment, you will almost certainly

who your customer is not.

segment gets what it wants, but the customers have nowhere

However, if other manufacturers come along that are willing

will lose everyone.

remains the same: You must have one target. Targeting is at least not as it is about

Lect

ure

51: T

arge

ting

a M

arke

t Seg

men

t

the offering.

Making an Offering with Value

target customer actually wants.

Lect

ure

51: T

arge

ting

a M

arke

t Seg

men

t

versa. But that may not always be the case.

Customer Segments Competitors/Company

Attributes GamersNon-

Gamers Xbox PS3 WiiCutting-edge graphics H L H H LHighly involved games H L H H L

H L H H LHigh skill levels H L H H LRealistic graphics H L H H L

Ease of interface L H L L H

An attribute-by-segment matrix is a valuable tool for identifying targets that may be underserved by current offerings.

into one.

with the game system, concentrating on the one attribute that

its offering to serve that segment.

Lect

ure

51: T

arge

ting

a M

arke

t Seg

men

t

Chernev,

1.

2.

Suggested Reading


Positioning Your OfferingLecture 52

Amarketers, but because the marketers themselves fail to communicate the

in creating value for the customer, then clearly communicating that value.

The Positioning Process

Lect

ure

52: P

ositi

onin

g Yo

ur O

fferin

g

about just one of those attributes.

Unfortunately, by that time, many consumers were using their

the solution.

Creating Value for the Target Customer

Lect

ure

52: P

ositi

onin

g Yo

ur O

fferin

g

your customer is.

purchase decisions, such as parents of young children.

break an offering.

Differentiating from the Competition

Lect

ure

52: P

ositi

onin

g Yo

ur O

fferin

g

Positioning statements are not taglines or slogans. They are

Chernev,

Suggested Reading

1.

2.


Lecture 53

Harvard Business Review

in which a business sells its current customers more of its current

Current Offerings New OfferingsCurrent Customers Market Penetration Product Development

New Customers Market Development

Market Penetration

involves selling more of

your current customers. This

risky means of increasing

avenue for growth that is

marketers seeking to increase sales. Selling a little more

increase sales.

your current customers to

and exploited a cultural opportunity to sell more of its current product—Dockers—to current customers.

Product Development

in 20 years.

Market Development

serve new customers.

of customers. This is obviously the riskiest strategy because it

Gap Analysis

your efforts.

Chernev,

1.

your solutions.

2.

Suggested Reading


Deriving Value from Your CustomersLecture 54

Acommunication value.

Loyalty Value

customer to be loyal if he or she has bought more than a certain

Lect

ure

54: D

eriv

ing

Valu

e fr

om Y

our C

usto

mer

s

that someone buys from you out of habit. Behaviorally, habitual

Triscuits. Loyal customers, in contrast, are more likely to view

marketing researcher from Boston University, is among a growing

color the way we engage in economic transactions.

thinking they relate to loyalty.

Lect

ure

54: D

eriv

ing

Valu

e fr

om Y

our C

usto

mer

s

customer base.

Information Value

Further, customers can give you valuable information about your

them. But you may also be able to get many of these insights for

Guinness Book of

the country.

Communication Value

Lect

ure

54: D

eriv

ing

Valu

e fr

om Y

our C

usto

mer

s

mouth communications.

customers you serve. Some

as those who have large

in their communities, or If you sell to teenagers, then you probably have many customers

Chernev,

1.

2.

Suggested Reading


Lect

ure

55: C

reat

ing

Gre

at C

usto

mer

Exp

erie

nces

Creating Great Customer ExperiencesLecture 55

U

marketing strategy.

The most famous framework for remembering all the marketing

Promotion

Marketing Management

the marketing mix.

consume them.

Lect

ure

55: C

reat

ing

Gre

at C

usto

mer

Exp

erie

nces

treating every offering as if it were a service.

peak-end rule

Lect

ure

55: C

reat

ing

Gre

at C

usto

mer

Exp

erie

nces

market transactions. Therefore, one way of tackling the

Recognize the level of service your customers are likely to expect based on the

will be felt as a fresh injury.

Lect

ure

55: C

reat

ing

Gre

at C

usto

mer

Exp

erie

nces

Chernev,

1.

2.

Suggested Reading


The Tactics of Successful BrandingLecture 56

Bthe customer.

Lect

ure

56: T

he T

actic

s of

Suc

cess

ful B

rand

ing

Case Studies in Branding

inhibit others.

Center, the basketball arena of the Los Angeles Lakers. This

Branding and Customer Value

Lect

ure

56: T

he T

actic

s of

Suc

cess

ful B

rand

ing

signal refers

functional value or as a reference frame to boost monetary value for

of a consistent message.

lifestyle branding

you’ve experienced the social value of brands.

Lect

ure

56: T

he T

actic

s of

Suc

cess

ful B

rand

ing

The Branding Ladder There is a common belief among marketing managers that it is

branding ladder.

unassailable as they might seem.

Taken together, these three insights suggest that there are

Chernev,

1.

2.

Suggested Reading


Lect

ure

57: C

usto

mer

-Foc

used

Pric

ing

Customer-Focused PricingLecture 57

Pricing Information

but costs tell you nothing about how your customer will evaluate

be substitutes.

your customer thinks that what you are selling is worth what you

they see in your offering.

Lect

ure

57: C

usto

mer

-Foc

used

Pric

ing

Pricing Variations

.

Competing on Price

new customers, but this

failing somewhere else in your marketing. You may not

to attract customers, you are paying customers to buy your product.

Lect

ure

57: C

usto

mer

-Foc

used

Pric

ing

Evaluating Prices

even though it was the same in both cases.

Chernev,

Suggested Reading

Lect

ure

57: C

usto

mer

-Foc

used

Pric

ing

1.

2.

with which you are familiar.


Marketing Communications That WorkLecture 58

S

communications well.

Case Study: “Got Milk?” Campaign

Only after you have a strategy in place does it make sense to start designing an ad campaign, posting billboards, or sending out direct-mail catalogs.

Lect

ure

58: M

arke

ting

Com

mun

icat

ions

Tha

t Wor

k

strategy, but sometimes, the target is a subsegment of the total

warning not to let the same fate befall the viewer.

Lect

ure

58: M

arke

ting

Com

mun

icat

ions

Tha

t Wor

k

Commanding Attention

To ensure that you always have new information to share, you might try the strategy of trivial innovation

Communication Templates

while remaining consistent.

to the average consumer.

Lect

ure

58: M

arke

ting

Com

mun

icat

ions

Tha

t Wor

k

Summing Up Communications

sure you have a goal for your communications, whether you are

Chernev,

1.

2.

Suggested Reading


The Promise and Perils of Social MediaLecture 59

getting information to consumers.

or customers.

Lect

ure

59: T

he P

rom

ise

and

Peril

s of

Soc

ial M

edia

Slate

Viral Marketing

whole market.

That value comes from sharing content that is funny, emotionally

message. The key here is to give customers content that they will

Lect

ure

59: T

he P

rom

ise

and

Peril

s of

Soc

ial M

edia

Destination Content Another change in marketing communication over the last few

TIME The New York Times.

must create something worth seeking out.

same as throwing money away.

marketing messages.

Lect

ure

59: T

he P

rom

ise

and

Peril

s of

Soc

ial M

edia

Social Media As a communication tactic,

you can learn as much from your

as your customers are learning

strategy on the larger marketing

overall marketing strategy.

your product or post something about it on Facebook can be

and costs you very little.

all of them.

Chernev,

1.

about by customers.

2.

Suggested Reading


Lect

ure

60: I

nnov

ativ

e M

arke

ting

Res

earc

h Te

chni

ques

Innovative Marketing Research TechniquesLecture 60

Qualitative Research

of customers.

starting over again.

of your customers in situ

Focus Groups

customers who are in the target segment.

Lect

ure

60: I

nnov

ativ

e M

arke

ting

Res

earc

h Te

chni

ques

must be met if the data are to be valid, interpretable, and generalizable.

Lect

ure

60: I

nnov

ativ

e M

arke

ting

Res

earc

h Te

chni

ques

Ethnographies

in a new light.

Projective Techniques

Lect

ure

60: I

nnov

ativ

e M

arke

ting

Res

earc

h Te

chni

ques

Companywide Marketing

.

Why We Buy.

1.

Suggested Reading


2.

own research.

Bib

liogr

aphy

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Competitive Advantage: Creating and Sustaining Superior

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The Lean Startup: How Today’s Entrepreneurs Use Continuous

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Marketing Management th



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