Week 10: Business Marketing Planning Flashcards
Explain the importance of performance measures
Reporting and marketing control systems are required:
- to assist in developing and implementing strategies
- to assess whether or not strategies worked
- to provide the measures that lead to control and improvement
How does the Balanced Scorecard manage control
= Cause and effect relationship
- Defines the chain of logic by which intangible assets will be transformed to tangible value
Financial Perspective addresses this through
- productivity, long-term shareholder value and revenue growth
= Customer value proposition
- Clarifies conditions that create value for the customer
Customer Perspective include
- product/service attributes (price, quality, time, function), relationship (partnership) and image (brand)
= Value-creating processes
- Defines processes that transform intangible assets into customer and financial outcomes
Internal Process Perspective include
- managing operations, customers, innovation and regulatory/social processes
= Clustering assets and activities
- Defines intangible assets to be aligned and integrated to create value
Learning & Growth Perspectives:
- human capital and information capital and organisational capital
Explain the first component of the business model
Each element is tied together by three important ‘bridge’ elements =>
- customer benefits
- configuration
- company boundaries
- Customer Interface
- Provide superior performance through:
->Speed
->Responsiveness to complex orders
->Customised to solve customer problems
- Provide superior quality by:
->Reducing customer costs
->Improving performance
->Offer innovative product features that employ new technologies
=Components
- Fulfillment and support
->Are the channels a firm uses to reach and support customers
- Information and insight
->Invovles the capiture of knowledge from customers and uses it to provide enhanced value to customers
- Relationship dynamics
->Involves the dyadic nature of the buy/sell relationship in order to understand customer expectations so it can exceed them, increase the affiliation and lower competitive influences
- Pricing structure
->Employs a pricing policy and structure tha enhances profits but not at the expense of curtailing business
Explain the second component of the business model
- Core Strategy
- The business mission describes overall strategic objective, sets course direction and defines performane criteria to measure progress
- Product and market scope defines where firm competes
- Basis for differentiation captures essence of how firm compettes differently than its rivals do
- >Business is differentiated when its value-adding activities are perceived as superior and profitable
- >Value-added features need to motivate customers to pay a higher premium than the cost of superior performance
Explain the third component of the business model
- Strategic Resources
- Employing superior strategic resources and skills can gain a compettive advantage
->Core competencies:
Set of skills, systems and technologies that create uniquely high value for customers
-> Strategic assets:
More tangible requirements for advantage; incl brands, customer data, distribution coverage, patents
->Core processes:
Methodologies and routines that companies use to transform competencies, assets and other inputs into value for customers
Explain the fourth component of the business model
- Value Network
- Includes those who complement and enrich the organisation
- >Do we have good relations with supplier, partners, vendors and other supporters?
- >Can we partner with others in such a way that we can use their assets as if they were our own?
Explain what a balanced scorecard is and outline the first perspective measured by the scorecard.
= comprehensive system for converting a company’s vision and strategy into a set of performance measures. All this can be represented on a strategy map.
- Financial Perspective
= Financial growth and productivity outcomes
- Balanced scorecard matches financial objectves with business units’ growth and other life cycle stages
- Shows how intangible assets will be transformed into tangible value
Overall objective => increased shareholder value
- Two ways to increase shareholder value:
- > Financial growth, outcomes incl percentage profit form sales and sales growth
- > Productivity outcomes, incl lower operating costs, inventory turns
=Consideration given to:
->Productivity
->Long-term shareholder value
->Revenue growth
=Lifecycle phases of a business linked to financial objectives:
-Growth
->Balanced scorecard seeks to match financial objectives with business units growth and other life cycle stages
->Operation: where the company needs to commit resources for new product/service
->Financial objectives: know sales growth rate by segment, know percentage revenue from new product/services/customers
- Sustain
-> Operation: represents majority of business where strategy is to maintain and grow slowly
->Financial objectives: focus on share of target customers and account, know customer and product line profitability
- Harvest
->Mature SBUs (strategic business unit) or products
->Operations: provide only enough investment to maintain product equipment and capabilities
->Financial objectives: goal is payback, know customer and product-line profitability
Outline the second perspective measured by the scorecard.
- Customer Perspective
= Defines how the firm proposes to deliver a competitively superior value proposition to the targeted customer
= Clarifies how value will be created for the customer
- Strategies include:
->Moving product image from commodity to branded product
->Personalised customer service
->Utilising partners (eg. distributors or manufacturing representatives)
- Core measures:
->Market share
->Customer acquisition
->Customer retention
->Customer satisfaction
Outline the third perspective measured by the scorecard.
- Internal Perspective
= Describes the business processes that directly affect the chosen strategies
- Transforms intangible assets into customer and financial outcomes, outcomes include:
->Customer relationship management
->Innovation management
->Operations management
->Supply chain management
->Regulatory and social processes management
Outline the fourth perspective measured by the scorecard.
- Learning & Growth Perspective
= The human, info and organisational capital to support value creating internal processes
- Defines the intangibles assets that must be aligned and integrated to create value