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WEB BASED STRATEGIES
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Web Site Strategies
Three Web site approaches Use to disseminate only product information Use as one of several important distribution
channels Use as exclusive channel to transact sales with
customers
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Using the Internet toDisseminate Product Information
Approach Website used to provide productinformation of manufacturers or wholesalers
Informs end-users of location of retail stores
Avoids channel conflict with dealers Important where strong support of dealernetworks is essential
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Approach Sell directly to consumers and Use traditional wholesale/retail channels
Strategic appeal Communicate with a company Shop for product information Make purchases Resolve customer service problems
Brick-and-Click Strategies:An Appealing Middle Ground Approach
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Approach Use Internet as the exclusive channel for allbuyer-seller contact and transactions
Strategic issues for an online company Whether it will have a broad or narrow product offering
Whether to perform order fulfillment activities internally or tooutsource them
How it will draw traffic to its Web site and then convert pageviews into revenues
Strategies for Online Enterprises
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FUNCTIONAL STRATEGIES
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FUNCTIONAL STRATEGIES
EVERY BUSINESS UNIT DEVELOPS FUNCTIONAL STRATEGIES FOR EACH MAJOR
DEPARTMENT
MARKETING STRATEGY
FINANCIAL STRATEGY
RESEARCH & DEVELOPMENT STRATEGY
OPERATIONS STRATEGY
HUMAN RESOURCES STRATEGY
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MARKETING STRATEGIES
Product Strategy New or existing product? for new or existing customers?
Promotion Strategy Push - spend Rs. on promotions and discounts to push products Pull - spend Rs. to build brand awareness so consumers will ask for it by
name Media selection
Channel or Place Strategy Distribute through dealer networks Sell directly to consumers through own stores or through internet
Price Strategy Skim pricing (high) when you are a pioneer Penetration pricing (low) builds market shares
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FINANCIAL MANAGEMENT STRATEGIES
CAPITAL ACQUISITIONS
Debt Leverage, Stock Sales, & Gains from Operations Equity financing is preferred for related diversification Debt financing is preferred for unrelated diversification
RESOURCE ALLOCATIONS Dividends & Reinvestment
Reinvest earnings in fast-growing companies Keeping the stockholders contented with consistent dividends Use of stock splits ( or reverses) to maintain high stock prices
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RESEARCH & DEVELOPMENT STRATEGIES
LEVEL OF INNOVATION Pioneer (Leader) v. Copy Cat (Follower)
Technological leadership fits well with differentiation A follower strategy makes sense with cost-leader strategies
Different types of R & D (basic, product, process) Where is the firms historic expertise / advantage? How competent are the R & D Personnel?
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OPERATIONS STRATEGIES
MANUFACTURING LOCATION
Internal Production v. Outsourcing
Domestic Plants v. International Locations
SYSTEM LAYOUT Job Shops v. Mass Production Job shop/small batch production fits well with a differentiation
strategy Continuous production / dedicated transfer lines helps achieve
cost leadership Use of robots and CAD/CAM v. Labor intense manufacturing
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LOGISTICS STRATEGIES
TYPE OF MATERIALS TRANSPORTED (Bulky or Compact?) Raw Materials, Supplies, & Components Finished Goods
BEST MODE OF TRANSPORTATION AIR RAIL TRUCK
OUTSOURCE TRANSPORTATION OR DO IT YOURSELF?
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HUMAN RESOURCES STRATEGIES
TALENT ACQUISITION Recruit from Outside v. Internal Development Require experienced, highly- skilled workers v. we will train you Offer top wages & benefits v. mentoring and a career
WORK ARRNGEMENTS Timings Safety Pf, Gratuity, Bonuses
MOTIVATION & APPRAISAL Extrinsic v. Intrinsic Reward Systems Incentives for ideas & originality v. incentives for conformity?
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STRATEGIES TO AVOID
DUMB STRATEGIES
FOLLOW THE LEADER We can do that toobut maybe its not worth copying
ARMS RACE Battles which increase costs and decrease revenues
DO EVERYTHINGOffering something for everyonetrying to please everyone
LOSING HAND
Pouring Rs. down the knotholeinvestment because of prior commitments
NONE OF THESE STRATEGIES WILL CREATE A SUSTAINABLE COMPETITIVE ADVANTAGE FOR THE FIRM
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ORGANIZATIONAL STRUCTURE
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Organization Structure
Strategy is implemented through organizational structure.
The primary role of organizational structure and control is two fold :
a) to coordinate employees activities so that they work together
b) to motivate employees and provide them with the incentives
to achieve superior efficiency, quality, innovation or customerresponsiveness.
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Types of Organizational Structure
Product Focused Structure
Market Focused Structure
Function Focused Structure
Virtual Structure
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Product-Focused Organization
Head of Co./Div
Head MfgHead FinHead HRHead
Marketing
MarketingResearch
ProductManagement
ProductManager C
ProductManager B
ProductManager A
Support
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Product- Focused Organization
Characteristics Classic brand management structure developed by P&G in 1930s Commonly used where different products use the same channels
of distribution Product Manager acts as a Mini -CEO
Product Manager has the ultimate responsibility for the brand
Assistant Product Manager is responsible for market and share forecasting,budgeting, coordinating with production, executing promotions, andpackaging
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Product- Focused Organization
Examples of product focused organizations HUL P&G Dabur Maruti-Suzuki
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Market-Focused Organization
Head of Co./Div
Head Mfg Head Fin Head HRHead
Marketing
MarketManager A
MarketManager 2
Marketmanager 3
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Market- Focused Organization
Characteristics Useful when there are significant differences in buyer
behavior in the market segments Does not give managers full responsibility for the
services or products delivered
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Market- Focused Organization
Examples of Market Focused Organization Cipla Thomas Cook Himalaya Ayurvedic
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Function-Focused Organization
Head of
Co./Div
Head Mfg Head Fin Head HRHead
Marketing
Adv. Mgr ProductMarketingMarketService
MarketResearch
SalesPromotion
t
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Function- Focused Organization
Characteristics Aligned by marketing functions A single manager is not responsible for day-to-day marketing
activities of the product Useful if company has few products
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Function- Focused Organization
Examples of function focused MarketingOrganization
Google IOC (Oil Marketing) SMEs
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Virtual Structure
The firm has farmed out its finance function to an outside
organization. While the finance function exists it is not a part
of the firm and hence it makes that part of the firm virtual.
CEO
MARKETING FINANCE OPERATIONS
VIRTUAL ORGANISATION
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Virtual Structure
Both firms must be compatible in vision, business practices,language, employees background and profit perceptions.
Both firms must not be too dissimilar in size, as relative
importance is then sacrificed to browbeating by the big player. Business environment of the both must be transparent to the
extent possible.
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Organizational Communication
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Effective Communication
Use Direct Simple Words Avoid Words which can have Ambiguous Meaning
Use Face to Face Communication
Use Feedback
Listen with Understanding
Create Constructive Environment for the Expression of Ideas
Be Careful about your Non-verbal Communication
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CommunicationFlow in an organization
UpwardDownward
Horizontal
Diagonal
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Barriers to Effective Communication Assumptions
Poorly expressedmessage Loss by transmission andpoor retention Poor listening andpremature evaluation
Information overload
Selective perception Influence of attitude
Difference in status and power
between the sender and thereceiver.
Several levels in organization
hierarchy
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THANK YOU
33Gagan Bhatia; Prof Marketing