Chapter 2: Understanding Your Company Flashcards
On which levels can a company make strategic planning?
1) Concern or company
2) SBUs (Strategic Business Units)
3) Product or Market Combination (PMC)
What does it mean to make a strategic planning on the level of “Concern or company” ?
- Involves top-level management and focuses on the overall direction of the entire organization
- Goals are set for the organisation (Mission, Vision, Values, Overall strategic objectives)
- 5 year or 3 year strategic plan
What does it mean to make a strategic planning on the level of “SBUs (Strategic Business Units)” ?
- Focuses on specific business units or divisions within the organisation
- Goals are set to achieve competitive advantage within a particular market segment or industry
What does it mean to make a strategic planning on the level of “Product or Market Combination (PMC)” ?
- Clearly defined product groups, targeted towards a clearly defined market
Which levels of Strategic Marketing are considered “Business planning” ?
- Concern or company
- Strategic Business Units (SBUs)
Which levels of Strategic Marketing are considered “Marketing planning” ?
- Product or Market Combination (PMC)
What does “BHAG” stand for?
Big. Hairy. Audacious. Goal.
What is a SMART Objective?
- Specific
- Measurable
- Achievable / Attainable
- Relevant / Realistic
- Time-bound
Vision statement
Focuses on tomorrow and depicts the future the organisation seeks to create
Mission statement
Focuses on today and what an organisation does to achieve it
What is more relevant to a “BHAG”: Mission statement or Vision statement?
Vision statement
Market definition
The process of understanding the boundaries and characteristics of a specific market in which a company operates or intends to operate
Abell and Hammond Model
3 Axes:
- What? = What are the customers’ needs
- For whom? = What are the customers segments
- How? = How are needs being satisfied, what solution are offered to the customer for his needs
Purpose of Abell and Hammond diagram
Makes a picture of the market you operate in and the position of your company within this market
Porter’s Value Chain
A tool to analyse the internal activities of a business and understand how they contribute to competitive advantage
For what marketing environment is Porter’s Value Chain used?
Micro-environment
Internal Organisational Analysis
1) Technology & Innovation
2) Production Capabilities
3) Financial Possibilities
4) Management & Organisation
For what marketing environment is the internal organisational analysis used?
Micro-environment
VRIO
A strategic tool used to evaluate a company’s resources and capabilities to determine if they can provide a sustainable competitive advantage
“V” in VRIO Framework
Value = A resource must help the company improve efficiency, effectiveness or customer satisfaction. If a resource or capability is valuable, it can create a competitive advantage.
“R” in VRIO Framework
Rarity = If few competitors possess the resource or capability, it becomes a potential source of competitive advantage. If it’s widely available, it does not confer a significant advantage
“I” in VRIO Framework
Imitability = If a resource is difficult to replicate or if doing so would require significant time, effort or cost, it contributes to a sustained competitive advantage. Resources that are easy to imitate are less likely to provide long-term benefits
“O” in VRIO Framework
Organisation = Having the right processes, structures and management systems in place to exploit the resource fully.
For what marketing environment is VRIO used?
Micro-environment
For what marketing environment is STEEPLE analysis used?
Macro-environment
Mc-Kinsey 7-S Model
A management framework designed to help organisations achieve alignment and effectiveness by analysing the coordinating seven key internal elements.
What are the 7 S’ of Mc-Kinsey’s Model
- Strategy: The plan devised to maintain and build competitive advantage over the competition.
- Structure: The way the organisation is structured and who reports to whom.
- Systems: The daily activities and procedures that staff members engage in to get the job done.
- Shared Values: Called “superordinate goals” when the model was first developed, these are the core values of the company that are evidenced in the corporate culture and the general work ethic.
- Style: The style of leadership adopted.
- Staff: The employees and their general capabilities.
- Skills: The actual skills and competencies of the employees working for the company.
STEEPLE analysis
- Social
- Technological
- Economic
- Environmental
- Political
- Legal
- Ethical
Customer equity
The total combined customer lifetime values of all of the company’s current and potential customers
Customer life-time value
The present value of the future cash flows attributed to the customer during his/her entire relationship with the company
Formula Customer life-time value
(Avg. Monthly revenue per customer * Gross margin per customer) / Monthly churn rate
Formula monthly churn rate
(Number of customers lost during the month / Number of customers at the start of the month) * 100
Customer Relationship Management (CRM)
The overall process of building and maintaining profitable customer relationships by delivering superior customer value and customer satisfaction
What does CBBE stand for?
Customer-Based Brand Equity
CBBE Model
A strategic framework that focuses on building and managing a brand’s equity from the customer’s perspective
Components of CBBE Model
1) Brand Identity :
- Salience: Ensuring that the brand is easily recognizable and that customers are aware of the brand and its offerings.
2) Brand Meaning:
- Performance: How well the product or service meets customers’ functional needs.
- Imagery: The extrinsic properties of the brand, including the social and psychological aspects that shape the brand’s image.
3) Brand Response:
- This stage focuses on customers’ responses and judgments about the brand. It involves two dimensions:
- Judgments: Customers’ personal opinions and evaluations of the brand based on quality, credibility, consideration, and superiority.
- Feelings: The emotional responses and connections that customers have with the brand.
4) Brand Resonance:
- Behavioural Loyalty
- Attachment to Brand
- Sense of Community
- Active Engagement
What components of the CBBE model should a company focus on if they are dealing with low-involvement products?
Brand Identity & Brand Resonance
What components of the CBBE model should a company focus on if they are dealing with high-involvement products?
- Brand Identity
- Brand Meaning
- Brand Response
- Brand Resonance
Components of Brand Identity within CBBE Model
- Salience: Ensuring that the brand is easily recognizable and that customers are aware of the brand and its offerings.
Components of Brand Meaning within CBBE Model
- Performance: How well the product or service meets customers’ functional needs.
- Imagery: The extrinsic properties of the brand, including the social and psychological aspects that shape the brand’s image.
Components of Brand Response within CBBE Model
- Judgments: Customers’ personal opinions and evaluations of the brand based on quality, credibility, consideration, and superiority.
- Feelings: The emotional responses and connections that customers have with the brand.
Components of Brand Resonance within CBBE Model
- Behavioural Loyalty
- Attachment to Brand
- Sense of Community
- Active Engagement
Mindshare
The degree to which a brand is top-of-mind for consumers when they think about a particular category or industry
Heartshare
The emotional connection and loyalty that a brand builds with its customers
Levels of Brand Behaviour
- Buying intention: Willingness to buy a brand
- Brand loyalty
- Brand ambassadorship: Positive WOM, high NPS
