Mmi vii a company analysis

1. The smart competitor
• Must design and deliver offerings for well –
defined markets. This belief is at the core
of the new view of business processes
and places Marketing at the beginning of
planning.
• Thus the modern emphasis of firms has
changed from making and selling to being
part of the value delivery process.

2. Value Creation and delivery
sequence
A 3 part process :
Choosing the value-Segment the market,
select the target market, develop the
product’s value positioning. STP is the
essence of Strategic Marketing.

3. The firm’s task
• To examine its cost and performance in each
value- creating activities and look for ways to
improve it.
• The firm should estimate its competitor’s costs
and performances as benchmarks for evaluating
its own performance. To achieve excellence it
should study the “best of class” practices of the
world’s best companies.

4. A firm’s success
• Will depend not only on how well each
department performs its own duties but
also how well various inter- departmental
activities are coordinated to conduct core
business processes.

5. Capabilities and Core
competencies
• Capability-based strategies are
based on the notion that internal
resources and core competencies
derived from distinctive
capabilities provide the strategy
platform that underlies a firm's
long-term profitability.

6. Evaluation of these capabilities begins with
a company capability profile, which
examines a company's strengths and
weaknesses in four key areas:
• Managerial
• Marketing
• Financial
• Technical

7. Then a SWOT analysis is carried out to determine
whether the company has the strengths necessary
to deal with the specific forces in the external
environment.
This analysis enables managers to identify:
External threats and opportunities, and
Distinct competencies that can ward off the threats
and compensate for weaknesses.
The picture identified by the SWOT analysis helps to
suggest which type of strategy, or strategic thrust
the firm should use to gain competitive advantage.

8. Stalk, Evans and Schulman (1992) have identified four
principles that serve as guidelines to achieving
capability-based competition:
Corporate strategy does not depend on products or
markets but on business processes.
Key strategic processes are needed to consistently
provide superior value to the customer.
Investment is made in capability, not functions or
SBUs.
The CEO must champion the capability-based strategy.

9. • Capability-based strategies, sometimes referred
to as the resource-based view of the firm, are
determined by (a) those internal resources and
capabilities that provide the platform for the
firm's strategy and (b) those resources and
capabilities that are the primary source of profit
for the firm.
• A key management function is to identify what
resource gaps need to be filled in order to
maintain a competitive edge where these
capabilities are required.

10. Several levels can be established in defining
the firm's overall strategy platform

11. • At the bottom of the pyramid are the basic
resources a firm has compiled over time.
They can be categorised as technical
factors, competitive factors, managerial
factors, and financial factors.
• Core competencies can be defined as the
unique combination of the resources and
experiences of a particular firm. It takes
time to build these core competencies and
they are difficult to imitate.

12. Critical to sustaining these core competencies are
their:
• Durability - their life span is longer than individual
product or technology life-cycles, as are the life
spans of resources used to generate them, including
people.
• Intransparency - it is difficult for competitors to
imitate these competencies quickly.
• Immobility – these capabilities and resources are
difficult to transfer.

13. Core competencies
• In today’s world the key to efficiency for a
company is to own and nurture critical
competencies that make up the essence of the
business and outsource less critical resources if
they can be obtained at better quality or lower
cost.
• Many companies outsource landscaping,
cleaning, transport management, data
processing.

14. Core Competencies
• A core competency is a specific factor
that a business sees as being central to
the way it, or its employees work. It fulfils
three key criteria:
• It provides consumer benefits
• It is not easy for competitors to imitate
• It can be leveraged widely to many
products and markets.

15. • A core competency can take various
forms, including technical/subject matter
know-how, a reliable process and/or close
relationships with customers and
suppliers. It may also include product
development or culture, such as employee
dedication.

16. • Core competencies are particular strengths
relative to other organizations in the industry
which provide the fundamental basis for the
provision of added value e.g Nike : Shoe
designing and shoe merchandising.
• Core competencies are the collective learning in
organizations, and involve how to coordinate
diverse production skills and integrate multiple
streams of technologies.

17. Core competence is something a company does
especially well relative to its competitors.
• Honda, for example, has a core competence in small
engine design and manufacturing
• Sony has a core competence in miniaturization
• Federal Express has a core competence in logistics
and customer service. Typically, a core competence
refers to a set of skills or experience in some
activity, rather than physical or financial assets.

18. • Microsoft has the core competence of designing
office software products that are user-friendly.
• PepsiCo has a core competence of mass
production and distribution of bottled drinks.
• Polaroid has a core competence in
manufacturing immediately self-developing film.
• Ernst & Young has the core competence of
performing audit functions for Fortune 500
corporations.
• One of Wal-Marts core competencies is their
massive real-time information system.

19. Utilization of core competencies
• A company's core competencies can be
applied to the development of new and
creative products or services and markets.
• Microsoft could use its core competence to
develop user-friendly video games.
• PepsiCo could use its core competence of
bottling and distribution to bottle and distribute
medicines or hair care products

20. • Few companies are likely to build world
leadership in more than five or six
fundamental competencies.

21. Core business processes
Market sensing ( gathering market intelligence)
New offering realization ( R&D and launching
new , high quality offerings quickly and within budget)
Customer acquisition ( defining target markets and
prospecting for new customers)
CRM ( building deeper understanding, relationships and
offering to individual customers)
Fulfillment management( receiving orders, shipping goods,
receiving payment)

22. Strong Companies
• Develop superior capabilities in managing and
linking their Core Business Processes.
• Re- engineer the work flow and build cross –
functional teams responsible for each process.
• To be successful a firm needs to look for
competitive advantages beyond its own
operations into the value chain of suppliers,
distributors and customers.

23. Market driven organizations
Excel at :
• Market sensing
• Customer linking
• Channel bonding
• Competitive advantage derives from how well
the company has fitted its core competencies
and distinctive capabilities into tightly locking
activity systems.

24. Defining the Business
• What business are we in ?
• Theodore Levitt encouraged market
definitions of a business rather than
product definitions, since products are
transient but basic needs and customer
groups endure.

25. • His view was that a business must be viewed as a
customer satisfying process rather than a goods
producing process.
• Thus transportation is a need : a car, a bike or an
airplane are products that meet the need.
• IBM redefined itself from a hardware and software
manufacturer to a builder of networks.
• Encyclopedia Brittanica : from we sell encyclopedias to
we market information.
• Pepsi : We sell cold drinks to quench thirst.
• Gati : from deliverers of small cargo to - We service your
need for time bound deliveries of your package.

26. Concept of SBUs
An SBU has three characteristics :
• It is a single business or related businesses that can be planned
apart from the rest of the company.
• It has its own set of competitors
• It has a manager who is responsible for planning and profit.
The whole idea behind this concept is to give focus to each – to
develop separate strategies and assign funding.

27. Strategic alliances
• Even giant companies like AT &T,IBM,
Siemens, need strategic partnerships for
effective market coverage to complement
or leverage their capabilities and
resources.

28. Strategic alliances
• Product or service alliances eg. Hindustan lever with
Pepsico to bottle and market Lipton Iced tea in glass
bottles.
• Promotional alliances eg, P&G using endorsements of
Bombay Dyeing to promote Ariel detergent.
• Logistics alliances – Gati and Indian Airlines
• Pricing collaborations : Airlines, hotels, car rental
companies combine to give an attractive package to
customers.

29. Company Analysis
What is Corporate success and how
should it be measured ?

30. Corporate Success
• Size ?
• Sales ?
• Market share ?
• Stock exchange value ?
• ROI ?
• Growth ?
• P/E ratio ?

31. Added Value
• The key measure of corporate success is
added value :
The difference between a firm’s output
and the cost of its inputs.

32. Value addition is measurable
• Microsoft Corporation, Added ( US $ Millions),1992
• Value of output 2750
• Wages and salaries 400
• Cost of capital employed 50
• Cost of materials 1650
• Total input 2100
• Added Value 650

33. Who is interested in the Company’s
success ?
• Employees / present and prospective
• Investors
• Customers
• Competitors
• Suppliers
• Analysts / Business professionals
• Government Agencies

34. Corporate successes
• The key lesson from histories of Corporate
successes is that corporate success is
based on an effective match between a
firm’s external relationships and its
distinctive capabilities.

35. Foundations of Success
Disney
BMW
Honda
Microsoft
All the above firms identified their distinctive
capabilities, selected the markets best
suited to their strengths, and built effective
competitive strategies to exploit them. All these companies
were adept at adding value.

36. Examples of failure
• IBM with the most rewarding distinctive
capabilities ever enjoyed by any corporation,
saw its markets develop in a way that steadily
diminished the value of the competitive
advantages it derived from them.
• Saatchi and Saatchi, once the best known
advertising agency in the world, over – extended
themselves and diminished in value trying to
shift from international recognition to creating
an international business.

37. Marketing Strategy
• No Marketing strategy is possible
without reference to the overall planning
of a company.
Corporate plans
Functional Plans e.g.
marketing
Sub Functional Plans e.g. Sales
Advertising etc.

38. Development of a marketing
strategy
• All strategy formations impact on each other.
• Selection of a target market and developing a
marketing mix are inter-related.
• Both parts of a marketing strategy must be
decided together.
• Strategies must be evaluated against the
company’s objectives not versus alternate
target markets or alternate marketing mixes.

39. The Company Vision and Mission
• While a company is continually adapting to
it competitive environment certain core
ideals remain relatively steady and guide
its strategic decision making process.
• These unchanging ideals form the
Business Vision and are expressed in the
company Mission statement.

40. Some Vision statements
Avon
To be the company that best understands
and satisfies the product, service and self-
fulfillment needs of women - globally
DuPont
The vision of DuPont is to be the world's
most dynamic science company, creating
sustainable solutions essential to a better,
safer and healthier life for people
everywhere.

41. Coal India Limited
To emerge from the position of domestic
leader to leading global player in the
energy sector by adopting best practices
from mine to market with due care to
environmental and social sustenance.

42. TATA STEEL
The long journey of Tata Steel has seen the
Company re-define its performance parameters
in a number of ways to become the global steel
industry benchmark for value creation and
corporate citizenship. It ensures a total
commitment to its ethical business practices and
a people oriented vision.
Vision
We aspire to be the global steel industry
benchmark for Value Creation and Corporate
Citizenship

43. Mission
Consistent with the vision and values of the founder Jamsetji Tata,
Tata Steel strives to strengthen India’s industrial base through the
effective utilization of staff and materials. The means envisaged to
achieve this are high technology and productivity, consistent with
modern management practices.
Tata Steel recognizes that while honesty and integrity are the
essential ingredients of a strong and stable enterprise, profitability
provides the main spark for economic activity.
Overall, the Company seeks to scale the heights of excellence in all
that it does in an atmosphere free from fear, and thereby reaffirms
its faith in democratic values.

44. We make the difference through
• Our People
•
By fostering teamwork, nurturing talent, enhancing leadership capability and
acting with pace, pride and passion.
• Our Offer
By becoming the supplier of choice, delivering premium products and
services and creating value for our customers.
• Our Innovative Approach
By developing leading edge solutions in technology, processes and
products.
• Our Conduct
By providing a safe workplace, respecting the environment, caring for our
communities and demonstrating high ethical standards.

45. IKEA
The IKEA vision is to create a better
everyday life for the many people. We
make this possible by offering a wide
range of well-designed, functional home
furnishing products at process so low that
as many people as possible will be able to
afford them.

46. • Unilever
The four pillars of our vision set out the long-term
direction for the company – where we want to go and
how we are going to get there:
• We work to create a better future every day.
• We help people feel good, look good and get more out of
life with brands and services that are good for them and
good for others.
• We will inspire people to take small everyday actions
that can add up to a big difference for the world.

47. • We will develop new ways of doing business
with the aim of doubling the size of our company
while reducing our environmental impact. We've
always believed in the power of our brands to
improve the quality of people’s lives and in doing
the right thing. As our business grows, so do our
responsibilities. We recognise that global
challenges such as climate change concern us
all. Considering the wider impact of our actions
is embedded in our values and is a fundamental
part of who we are.

48. A Vision statement by definition is
something you want to become, to
achieve, it is a seductive image of an ideal
future – whereas a Mission statement
explains the purpose of the organization –
why it exists – it captures the
organization’s soul.

49. • The mission statement helps to set the
course but needs to translate itself into
more specific objectives which must of
course be consonant with the mission
statement.

50. The Mission statement
• Communicates the firm’s core ideology
and visionary goals and generally consists
of the following three components:
a) Core Values to which the firm is
committed
b) Core purpose of the firm
c) Visionary goals the firm will pursue to
achieve its mission

51. The company’s mission statement
Fred Smith wanted to deliver mail anywhere in the US before 10.30 am. This was his
Vision.
Fedex states as its mission statement “ People, Service, Profit”.
“The core philosophy that governs every activity at FedEx Express is
People-Service-Profit (PSP): Take care of our people; they in turn
will deliver impeccable service demanded by our customers, who will
reward us with the profitability necessary to secure our future.
People-Service-Profit: These three words are the very foundation of FedEx
Express.”

52. Infosys : Putting it all together
• Who we are
Our Vision, Mission and Values
• Vision
"We will be a globally respected corporation.“
• Mission
"Strategic Partnerships for Building Tomorrow’s
Enterprise.“
• Values
We believe that the softest pillow is a clear conscience.
The values that drive us underscore our commitment to:

53. CLIFE
• Client Value: To surpass client expectations
consistently
• Leadership by Example: To set standards in our
business and transactions and be an exemplar for
the industry and ourselves
• Integrity and Transparency: To be ethical,
sincere and open in all our transactions
• Fairness: To be objective and transaction-
oriented, and thereby earn trust and respect
• Excellence: To strive relentlessly, constantly
improve ourselves, our teams, our services and
products to become the best

54. Purpose of the Mission statement
These are developed to share with
managers, employees, and customers. It
gives them a shared sense of purpose,
direction and opportunity. It guides
geographically separated employees to
work independently and yet collectively
towards a single goal.

55. Mission statements: Ideally three
major characteristics
1. Limited number of goals
2. Stress the companies major policies and
values
3. Define the major competitive spheres in
which the company will work.

56. The three basic objectives of
companies
1. Engaged in specific activities performing
a socially and economically useful
function.
2. Developing an organization to carry on
business and implement strategies.
3. Earn enough profit to survive and to grow

57. Company Objectives should lead to
Marketing Objectives
• Company objectives guide managers in searching
and evaluating opportunities and later planning
marketing strategies.
• Particular marketing objectives must be set within the
framework of larger company objectives
• Thus the hierarchy of objectives moves from
company objectives down to marketing department
objectives
• For each marketing strategy firms need objectives for
each of the 4 Ps as well as more detailed objectives
within each of these areas.

58. Corporate
Involves applying
business planning to
different units
Business
Involves other
resources required for
identified markets
Mkting.
Based on
Markets/Custo
mers/Products

59. Marketing Planning within the
Corporate cycle
• Corporate Financial Objectives
• Management Audit
• Objective and Strategy Planning
• Functional Plans
(including Marketing Plan)
• Corporate Plans

60. The Marketing Plan
• The Marketing Plan is a written statement
of marketing strategy and gives time –
related details
• It is necessary to know what needs to be
done and fills out the marketing strategy.
• It is a guide to implementation and control

61. Need for a Marketing Plan
• It ensures the coordination of all
activities in the marketing function and
sees that all individual efforts
complement each other.

62. Broad Components of a
Marketing Plan
• A)
The Marketing Mix offered
Target Market
For How Long ?
• B) Co. resources ( shown as cost ) needed
monthly/qtly
• C) Results Expected ( Sales /Profits / Customer
Service/ Control Procedures)

63. Stages in a Marketing Plan
• Mission
• Corporate Objectives
• Marketing Audit
• SWOT analysis
• Assumptions
• Marketing Objectives and Strategies
• Estimated Expected results
• Identify Alternative plans and budgets
• Budget
• First year detailed implementation
program

64. A Typical Marketing Plan
sets out
A) The Market
• The size and growth rate
• Its distribution by Region and Competitive
brand
• Sales by Population strata
• Sales by category of Consumer

65. B) The Target Customer
Age, Social/ Income class, Education
levels, Attitudes towards product and its
use
Product data/ formulation, efficiency of
performance vs. competition
Packaging, price,Product superiority vs
Competition

66. C) Competition
Competitive brands and their market
share
Analysis of competitive advertising in
terms of theme, media, expenditure

67. D) Marketing Objectives
Short and long – term aims of the marketing
strategy in terms of :
• Period
• Target consumer
• Distribution Policy
• Market Research Plans
• Product Development Policy
• Budget of all Marketing activity
• Two imperatives : Documentation / Periodic
review

68. Need for SWOT
• To ensure the successful
implementation of a marketing strategy
a firm needs to go through a process of
:
• Identification of major strengths,
weaknesses , opportunities and threats
based on analysis of company’s
resources, customers , competitors and
other aspects of the external company
environment

69. SWOT
• SWOT stands for strengths, weaknesses,
opportunities, and threats. Strengths and
weaknesses are internal factors.
• A strength could be:
• your specialist marketing expertise.
• a new, innovative product or service
• location of your business
• quality processes and procedures
• any other aspect of your business that adds
value to your product or service.

70. • A weakness could be:
• lack of marketing expertise
• undifferentiated products and service
(i.e. in relation to your competitors)
• location of your business
• poor quality goods or services
• damaged reputation
• Opportunities and threats are external
factors.

71. • An opportunity could be:
• a developing market such as the
Internet.
• mergers, joint ventures or strategic
alliances
• moving into new market segments that
offer improved profits
• a new international market
• a market vacated by an ineffective
competitor

72. • A threat could be:
• a new competitor in your home market
• price wars with competitors
• a competitor has a new, innovative
product or service
• competitors have superior access to
channels of distribution
• taxation is introduced on your product or
service

73. • Simple rules for successful SWOT
analysis
• Be realistic about the strengths and
weaknesses of your organization
• Analysis should distinguish between where
your organization is today, and where it could
be in the future
• Be specific. Avoid gray areas.
• Always analyze in context to your competition
i.e. better then or worse than your
competition
• Keep your SWOT short and simple. Avoid
complexity and over analysis
• Remember SWOT is subjective.

74. Key uses of SWOT
• Build on Strengths
• Resolve Weaknesses
• Exploit opportunities
• Avoid threats
• A SWOT is an integral part of any
Marketing Plan

75. Company Resources
To succeed, every company needs
some competitive advantage. This
arises out of some unique resource or
resources it possesses.
Breakthrough opportunities come
from using these strengths and from
avoiding direct competition with firms
with similar strengths.

76. Discovering Company strengths
• Evaluate all functional areas
• Evaluate products and Markets
• Evaluate Specialized knowledge of
Company personnel

77. Company resources vs. firm’s
successes and failures
• An analysis of past successes and failures
correlated with the firm’s resources can
throw light on reasons for either and lead
to framing of realistic and successful
future strategies.

78. • Financial strength is a major factor to be
considered in looking at opportunities.
Where initial capital outlay is very high this
may prove to be a barrier to a company
from taking advantage of an attractive
opportunity thrown up by the environment.

79. Intimate Customer relations and low – cost
quality manufacturing are other resources
a company may utilize effectively.
Production capability / flexibility /
outsourcing are other resources to be
considered.

80. Marketing Strengths
• Reputation and customer awareness of a
product
• Patent for a product
• Good relations with distribution channel
partners
• Effective use of Information Technology
• Promotion and price resources
• Thorough understanding of the Marketing
Environment