Week 10: Business Marketing Planning Flashcards

1
Q

Explain the importance of performance measures

A

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
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2
Q

How does the Balanced Scorecard manage control

A

= 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

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3
Q

Explain the first component of the business model

A

Each element is tied together by three important ‘bridge’ elements =>

  • customer benefits
  • configuration
  • company boundaries
  1. 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
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4
Q

Explain the second component of the business model

A
  1. 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
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5
Q

Explain the third component of the business model

A
  1. 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
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6
Q

Explain the fourth component of the business model

A
  1. 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?
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7
Q

Explain what a balanced scorecard is and outline the first perspective measured by the scorecard.

A

= 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.

  1. 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

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8
Q

Outline the second perspective measured by the scorecard.

A
  1. 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
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9
Q

Outline the third perspective measured by the scorecard.

A
  1. 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
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10
Q

Outline the fourth perspective measured by the scorecard.

A
  1. 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
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