PPT1

© 2

005

Joh

n W

iley

& S

on

s©

200

5 Jo

hn

Wil

ey &

So

ns

Chapter 10-13: Growth Strategies

There are 4 ways to grow a business:1. Energizing the current business – existing product markets with

existing assets & competencies2. Leveraging the current business

- taking the existing products into new market- finding new products/services for the existing customer base- leveraging assets or competencies

3. Creating a new business- finding a white space in the market- creating transformational innovation

4. Going global- leveraging the business into new countries- creating new or improved assets & competencies that will lead to SCA in a global marketplace

PPT2

© 2

005

Joh

n W

iley

& S

on

s©

200

5 Jo

hn

Wil

ey &

So

ns

Chapter 10 Energizing the businessIncreasing Market Share

Three ways to energize the brand:1. Increase product usage among existing customers

- frequency of use - the quantity used

2. Create differentiation through branded differentiators- branded feature (meaningful & impactful) – Westin Heavenly Bed- branded technology – Toyota VVT-I- branded program – Harley-Davidson ride planner, photo center- co-branded differentiator – WestinWORKOUT powered by Reebok,

Ford Explorer Eddie Bauer Edition3. Create energy through branded energizers

- branded program (Avon Breast Cancer Crusade)- branded sponsorships (Adidas Streetball Challenge)- endorsers (Tiger Woods vs. Buick)

Difference between a branded differentiator and a branded energizer?

PPT3

© 2

005

Joh

n W

iley

& S

on

s©

200

5 Jo

hn

Wil

ey &

So

ns

Chapter 11 Leveraging the business

1. Which Assets & Competencies can be leveraged? 2. Brand Extensions3. Expanding the Scope of the Offering (Product Expansion)4. New Markets (Market Expansion)5. Evaluating Business Leveraging Options6. The Mirage of Synergy

PPT4

© 2

005

Joh

n W

iley

& S

on

s©

200

5 Jo

hn

Wil

ey &

So

ns

Chapter 12 Creating New Businesses- “where is the white space?”

1. The new business- What is the definition of a truly new business?- Difference between blue ocean businesses & red ocean businesses- Barriers to long-term success in existing product markets

2. The innovator’s advantage

- What is an innovator’s advantage- Successful early market leaders share some commonality

3. Guides in managing category perception – focus on what product category or subcategory to buy

4. Routes to a new business – identify some examples of new businesses that were based on transformational innovation

5. From Ideas to Market – Making new business will require people, system, culture & structure that must adapt quickly to an emerging market area very different from the core

PPT5

© 2

005

Joh

n W

iley

& S

on

s©

200

5 Jo

hn

Wil

ey &

So

ns

Chapter 12 Creating New Businesses- Some examples of new businesses that were based on transformational innovations

StarbucksStarbucks was different in that - they created an inviting ambiance- the specialty coffee was the reason to go into Starbucks, and customers could

choose from over 100s of different variations on coffee- The price was also different from regular mom-and-pop coffee shops- Starbucks was limited in what food you could buy and you certainly could not order

fresh cooked foods, i.e., bacon & eggs, and hash browns with toast

What was similar was that like a regular coffee shop people could come in a sit down and enjoy a cup of coffee and it was typically a gathering place for locals.

There wasn’t really an innovator advantage because, while smaller, Peet’s had limited exposure on the West Coast and had a similar offering yet not the financial ability to expand like Starbucks.

Starbucks originated from an established business. Howard Schultz bought an existing business and expanded it. Howard Schultz came up with the idea when he was traveling in Italy and he thought it would be a good idea to transplant the coffee experience from Europe.

PPT6

© 2

005

Joh

n W

iley

& S

on

s©

200

5 Jo

hn

Wil

ey &

So

ns

TiVo http://www.youtube.com/watch?v=J2SV2dHQxsY; http://www.youtube.com/watch?v=9SKfT9FFO18

TiVo was different from previous ways to record video.- Typically VHS (Video Home System) had a limit from 2 to 6 hours that could be

recorded on a single tape without the customer having to manually change the tape

- With TiVo the customer could set the machine to record an episode of a continuing television show and then tell TiVo to record all new episodes of the same series. In addition, TiVo electronically monitors the cable system and updates the customer on any changes in the channel line up. Unlike VHS machines, TiVo also allows you to record one show and playback a different show simultaneously. The fast forward on TiVo allows to the customer to bypass commercials and it automatically monitors the space available on the hard drive.

What was similar was the ability to record from a television cable service and pre-program recording of a show (with very limited variety)

The advantage was short-lived because other television providers offered similar services with their own DVR boxes – Comcast, Direct TV, etc. However, their patent assets may allow them to survive or even win because without access to their patents, competitors have inferior performance

This was a new offering, transformational technology created by TiVo corporation.

PPT7

© 2

005

Joh

n W

iley

& S

on

s©

200

5 Jo

hn

Wil

ey &

So

ns

WebVan

WebVan invented a business concept that has transformed grocery shopping for many.

A customer could order by phone or on the internet and have the grocery store deliver the groceries at a specific time frame.

WebVan was the first to do this on a big scale. They only lasted a year or two because the financial model was weak.

PPT8

© 2

005

Joh

n W

iley

& S

on

s©

200

5 Jo

hn

Wil

ey &

So

ns

LexusLexus changed the way the customer viewed the maintenance of the car.- Unlike other brands, the Lexus dealer would come to your place of work or home,

drop off a loaner car and take the customer’s car to the shop do the maintenance and then return the car to the customer and pick up the loaner. They removed the dreaded car service trip for the customer.

What was similar was the car fixed in the shop; but the customer service involved was revolutionary for the car business.

For Discussion:Is the customer service provided by Lexus an innovator’s advantage?

PPT9

© 2

005

Joh

n W

iley

& S

on

s©

200

5 Jo

hn

Wil

ey &

So

ns

Lexus

For Discussion:Is the customer service provided by Lexus an innovator’s advantage?

The advantage was not a real innovator’s advantage in that the service component of the purchase of the car was too minor a point in the overall purchase decision.

To date, Lexus is the only car manufacturer that provides this service.

PPT10

© 2

005

Joh

n W

iley

& S

on

s©

200

5 Jo

hn

Wil

ey &

So

ns

Chapter 12 Global Strategies

1. What is the difference between a global strategy & a multinational strategy?- Multinational: Separate strategies developed & implemented autonomously- Global: A worldwide perspective, aim to create synergies, economies of scale, strategy flexibility & opportunities to leverage insights, programs, & product economies

2. Eight motivations for global strategiesDiscussion Question

3. Four Challenges to effective global brand managementA communication system; A planning system; A management structure to foster synergy and a system to encourage excellence in brand building

4. Strategic AlliancesConsidered when there are uncertainties of operating in other countries

PPT11

© 2

005

Joh

n W

iley

& S

on

s©

200

5 Jo

hn

Wil

ey &

So

ns

Chapter 12 Global Strategies

Eight motivations for global strategies

For Discussion:

- For what products does globalization not make sense because the strategy needs to be local?

- What products have points of differentiation that span countries?

PPT12

© 2

005

Joh

n W

iley

& S

on

s©

200

5 Jo

hn

Wil

ey &

So

ns

Chapter 12 Global Strategies

Eight motivations for global strategies

- For what products does globalization not make sense because the strategy needs to be local?

Many food products fall into this category. In general, food products are more sensitive to culture, local needs and habits.

- What products have points of differentiation that span countries?

Products that have purely functional benefits that are visible are more likely to be global (e.g., Pampers’ dry, happy baby)

High-end premium brand (e.g., Mercedes)

Country position (e.g., Coke, Levis’, KFC, Harley, country of origin is a product signal of quality)

PPT13

© 2

005

Joh

n W

iley

& S

on

s©

200

5 Jo

hn

Wil

ey &

So

ns

Chapter 12 Global Strategies

Effective global brand management:1. Developing a cross-country communication system to facilitate the

sharing of insights, methods, experiences and best practice (Intranet)

2. Creating a global brand planning system (Planning template)

3. Forming an organizational structure to foster cross-country synergy:• Uninformed dictator model – CEO make arbitrary decisions without research or analysis• Anarchy – Extremely decentralized structure with little guidance or communication- Service provider model – Central group develops a staff and knowledge base around

topics such as MR, segmentation, sponsorship and ads- Facilitator model – help the business units to develop sound strategies- Consultative model – Provide insights and suggestions

4. Finding ways to achieve brilliance in brand-building- Consider what paths to follow- Get the best and most motivated people to work on the brand- Develop multiple options- Measure the results

PPT14

© 2

005

Joh

n W

iley

& S

on

s©

200

5 Jo

hn

Wil

ey &

So

ns

Chapter 12 Global Strategies

Strategic Alliances – deal with uncertainties of operating in other countries

1. Definition – A long-term collaboration leveraging the strengths of two or more organizations to achieve strategic goals

2. Motivations for a strategic alliance- A desire to achieve benefits of a global strategy- A need to compensate for the absence of or weakness in a needed asset or competency

3. Success keys – Each partner contributes assets & competencies over time & obtains strategic advantages