Principles of Management Session 3 PDF

Objectives of this Partim Defining management and classifying management models Analysing the different market dimensions that impact value for a specific company Understanding how to create value by segmenting, targeting, and positioning Defining a business model and go-to-market approa...

Objectives of this Partim Defining management and classifying management models Analysing the different market dimensions that impact value for a specific company Understanding how to create value by segmenting, targeting, and positioning Defining a business model and go-to-market approach (4 P’s) to deliver and capture value Developing an approach to sustain value through: Digitalization and Internationalization Innovation Branding and Sustainability Platform strategies Measuring outcomes and adjusting the strategy 3 Managing the External Environment Value Perspective Business Intelligence - The 5 C’s UNDERSTAN- Collaborators Context Company Competitors Customers DING VALUE /Value system Market CREATING VALUE Selection of Target Positioning Segmentation Market The 4 P’s DELIVERING & CAPTURING Product / Solution Place / Channel Promotion / Price VALUE Communication Innovation Brand Equity Internationalization SUSTAINING VALUE Customer CSR/Sustainability Digitalization Relationship Management Measuring outcomes and adjusting strategy Adapted from Dwyer & Schurr  This Session Defining a business model and go-to- market approach (4 P’s) to Deliver value: Product Promotion Place Capture value: Price 5 Product/Solution 7  9 (Barney, 1991) 10 11 12 Frameworks to manage a product portfolio Product-Market Matrix Growth-Share Matrix 13 Product-Market Matrix 14 (Ansoff, 1957)  Product-Market Matrix Based on whether the products (horizontal axis) or markets (vertical axis) are existing/new, four growth strategies can be distinguished. Market penetration: Existing product/market combination Low risk E.g., through communicating or decreasing price Market development: Existing product on a new market Medium risk E.g., international expansion, B2C => B2B Product development: New product on an existing market Medium risk E.g., BMW introducing a new car or Apple a new smartphone Diversification: New product on a new market High risk E.g., a bank expanding into entertainment services 15 (Ansoff, 1957) Market Penetration 16 Product Development 17 Market Development Internationalization 18  Diversification Wonolo (“Work. Now. Locally.”): on-demand staffing platform that connects companies with a workforce network for short-term, last-minute jobs. 19  Market Development Business Customers => Consumers 20 Nespresso: Professional Services 21  Market Development Consumers => Business Customers 22 Diversification 23 24 25 Growth-Share Matrix 26 (Boston Consulting Group, 1970)  Growth-Share Matrix Introduced by the consultants of the Boston Consulting Group, the growth-share matrix enables evaluating the product portfolio. It is dynamic, products can move from one position to the other. Obviously, the best place to have your product is as a “Star,” with a product having a high market share in a rapidly growing market. By investing a lot in products in this phase, the hope is to maintain the strong market share position such that the product becomes a “Cash Cow” as market growth lowers. As the name indicates, products in this category generate a lot of cash inflow for the company, which it must invest in “Stars” and in “Question Marks” that show potential. The least favorable position to be in is “Dogs” and companies in this situation may consider divesting the product line if it no longer reaches the break-even cash level. However, chances are if it is a very competitive market, competitors are also considering divestment, which may turn “Dog” products for many into “Cash Cows” for few. In summary, it is important for a company to maintain a balanced portfolio and monitor their situation constantly. 27 Apply to Apple! 29 (Boston Consulting Group, 1970)