Interaction between marketing

and corporate strategy

 Corporate versus marketing strategy

Corporate strategy: Marketing strategy:

• Allocation of resources • Defines target markets,
within an organisation to direction and
achieve the business requirements in order to
direction and scope create a defensible
specified within position compatible with
corporate objectives. the overall corporate
strategy.
• Helps to control and
co-ordinate the different
areas of the
organisation.
 Strategic Gap Analysis
• Strategic gap analysis is an evaluation of the difference
between desired outcome and actual outcome, and what must
be done to achieve a desired goal.
• Strategic gap analysis attempts to determine what a company
should do differently to achieve a particular goal by looking at
the time frame, management, budget and other factors to
determine where shortcomings lie.
• After conducting this analysis, the company should develop an
implementation plan (also known as an operational plan) to
eliminate the gaps.
 Marketing plans and programmes
Marketing plan:
• Turning strategies into implementable actions.
• A detailed written statement specifying target markets,
marketing programmes, responsibilities, time scales and
resources to be used within the defined budgets.
Marketing programmes:
• Actions, often tactical, using marketing mix variables to
gain advantage within target market.
• Means of implementing the marketing strategy.
• Normally detailed in the marketing plan.
Influences on marketing strategy
 Strategic marketing analysis models

All of these models view products as:

• Manageable individual entities on an operational basis.
• A product portfolio (set of products each of which make
a unique contribution to the corporate picture) on a
strategic basis.
 Analysis models

• Boston Box.
• GE matrix.
• Shell’s directional policy matrix.
The Boston Box
 Boston Box
• Dog - holds a weak market share in a low growth
market.
• Question mark - high market growth with low share.
• Star - a market leader in a growth market.
• Cash cow - as market growth starts to trail off, stars can
become cash cows.
• War horses - market leaders, whose cash generating
position under threat due to negative market growth.
• Dodos - low share of a declining market means that
sales are dwindling away.
GE matrix
Shell’s directional policy matrix
 Types of growth
Intensive growth:
• Market penetration.
• Market development.
• Product development.

Diversified growth

Integrative growth - backward, forward, horizontal.

No growth - harvesting, entrenchment, withdrawal.

 Competitor analysis

A systematic attempt to identify and understand key

elements of a competitor’s strategy in terms of objectives,
strategies, resource allocation and implementation through
the marketing mix.
 Porter’s Five Forces Model

1. Bargaining power of suppliers.

2. Bargaining power of customers.
3. Threat of new entrants.
4. Threat of substitute products or services.
5. Rivalry among current competitors.
 Concerns of an Org.’s competitive analysis

1. Who are our competitors?

2. How can our competitors be grouped meaningfully?
3. What are our competitors’ strengths and weaknesses?
4. What are our competitors’ objectives and strategies?
5. How are our competitors likely to react to changes in
the marketing environment?
 Concerns of an Org.’s competitive analysis (1)
Competitor identification
1. Who are our competitors?
Similar specific-same product, technology and target market
Similar general-same product area, but different segments
e.g. Haagen daze vs. Wall’s
Different specific-same need satisfied by different means
e.g. Eurostar vs. British airway
Different general-competing for discretionary spend
e.g. holiday vs. new car
 Concerns of an Org.’s competitive analysis (2)
2. How can our competitors be grouped meaningfully?
Different characteristics for identifying Strategic groupings

Source: Adapted from Wilson et al. (1992).

 Concerns of an Org.’s competitive analysis (3)
3. What are competitive strengths and weaknesses

• Requires use of various information sources.

• Consider in terms of critical success factors:
e.g. manufacturing, technical and financial strength,
relationships with supplier and customer, its market and
segment, product range, its volume, cash and profits etc.
• Information can be used to plan and launch attack.
 Concerns of an Org.’s competitive analysis (4)

4. What are our competitors’ objectives and strategies?

Objectives – related to cash generation, market share,

technological leadership, quality recognition
etc.
Find clues in product portfolio.
Strategy - related to its positioning, marketing mix etc.
 Concerns of an Org.’s competitive analysis (5)

5. How are our competitors likely to react to changes in the

marketing environment?

Learn by experience
Not easy to predict its reaction due to: its cost structures,
relative market positions, product life cycle, industrial
position etc.
 Concerns of an Org.’s competitive analysis (1)

1. Who are our competitors?

Similar specific-same product, technology and target market
Similar general-same product area, but different segments
e.g. Haagen daze vs. Wall’s
Different specific-same need satisfied by different means
e.g. Eurostar vs. British airway
Different general-competing for discretionary spend
e.g. holiday vs. new car
 Useful information about competitors

Source: Wilson et al. (1992).

Generic strategies
 Sources of differentiations

• Product – branding, innovation, quality,

specification, design, image, patents;
• Price – price positions, price-value combinations
• Place – intensive, exclusive distributions
• Promotion – creativity, spending
• Service – strong trust with customer
 Choice of generic strategy

• Fit between the demands of the strategy and the

organisation’s capabilities and resources.
• The main competitor’s abilities on similar criteria.
• The key criteria for success in the market and their
match with the organisation’s capabilities.
Competitive positions and strategy
 Attacking and defending

• Aggressive strategies - frontal, flank, encirclement,

bypass, and guerrilla attacks.

• Defence strategies - fixed position, mobile, flanking,

contraction, counter offensive.
 Attack strategies

Source: Kotler and Singh (1981). Reproduced with permission of Thomson Media, Eleven Penn Plaza, New York, NY
10001
 Defence strategies

Source: Kotler and Singh (1981). Reproduced with permission of Thomson Media Eleven Penn Plaza, New York, NY
10001.
 Co-operative and independent strategies

Many situations can also be characterised by peaceful

coexistence and co-operative alliances between
competitors.