Ch 2 Flashcards
What are the big strategic decisions a company has to make first?
1) where to compete
2) how to compete
3) whether or not to compete at all
How does external analyiss play into making strategic choices?
1) identify: future events, trends uncertainties, opportnities, threats
2) analysis: information needed, scenarios
External analysis should address the following questions:
a) How to manage existing business – liquidate, milk, increase investment?
b) Enter into new business areas? – opportunities?
c) Are value propositions appropriate? – promise made to customers (changes overtime bc customers and company change!)
d) Assets & competencies – enhance, maintain or create? (R&D, manuf, access to capital, etc.)
e) Tactical strategies/programs –positioning, segmentation, distribution, manufacturing, brand building etc.
What are the two drawbacks of external analysis?
1) have all the info but dont know hwat to do with it
2) backward looking!
What are strategic ucertainties? Examples/parts of consider?
= specific unknown elements that will affect the outcome of strategic decisions
- What strategic decisions are required?
- New market entrants
- How sensitive is a market to price – sin tax on sugar
- What will future demand be – can industry sustain – pharmaceutical generics
- Technological shifts – Beta/VHS/DVD/Blu Ray/Streaming
- Performance improvements
WHat ways can you reduce or handle strategic uncertainties?
- zoom out –> see the big picture to get better perspective and see something you didnt see before
- become a ‘learning’ company rather than ‘knowing’ = always changing and adapting instead of ‘this is THE way’ mindset
- view it as complex vs complicated = many parts to just manage and solve vs lots of things to juggle and hard to do so
What makes up customer analysis?
Divide customers into segments
Analyze customer motivations
Explore unmet needs
What is the 5W model for customer analysis?
1) WHO are the current and potential customers
2) WHAT do customers do with teh product
3) WHERE do customers purchse
4) WHY do customers purchase
5) WHY (+HOW) do / dont customers choose our product
What is customer segmentation? What do with the info?
identifying groups that respond deiffetenly than other groups to competitive offerings
Find who are the biggest customers? The most profitable? The most attractive potential customers?
THEN deveop an offering for each segment
Example of customer segmentation and according products/benefits? What need to manage to make this work?
cereal market has tons of different segments!
- kids want sugar
- teens/YA want sugar maybe also, but often have cereal as a snack instead
- aduilts want healthy, proper fuel
Need manage:
- fact that poeple increasingly not eating breakfast
- different and freq chnging tastes
- health shift in regulations, messaging, trends etc.
- how target children? (reference groups!)
What are the criteria for a successful segment?
- Identifiable & measurable
- Substantial (unmet needs exist and enough people actually want some thing better)
- Accessible (regulations make it harder to access certain groups)
- Responsive (ROI, early adopters, etc.)
- Viable & sustainable (will people actually chose it? and is it legal/possible - ex weed market was big but illegal)
How to understand customer motivations?
Learn:
- What elements of the product/service do customers value most?
- What are the customers’ objectives? What are they really buying? (oft buy based on emotion - theoretically buy kids healthy shit, but when they’re being complainy you just buy them whatever works)
- What lies behind purchase decisions?
Analyze:
- How do motivations differ by segment? What drives each segment?
- How do segments differ in their motivation priorities?
- Which motivations take precedence? (they change over time!)
- What changes are occurring in customer motivation? In customer priorities?
What are the steps in customer motiavation analysis?
1) identify motivations (what is THE desired experience)
2) Group and structire motivations (cluster things to see precendecnce, which matter most, see what really impacts company value prop)
3) assess motivation importance
4) assign strtegic rolse to motivations (using patterns)
how use customer as active partner?
- Encourage Active Dialogue (Lays asks for chip ideas all the time!)
- Mobilize Customer Communities (Patagonia helps push sustainability)
- Manage Customer Diversity
- Co-creating Personalized Experiences
- Changing customer priorities
How to identify unmet needs? Why would you want to identify them?
- Dissatisfied customers? Switching brands or suppliers?
- Severity & incidence of consumer problems
- Unmet needs identified by customers
- Unmet needs that customer is unaware of
Why? because good hint of market opportunity (but also
