MBA 706 Exam 1 Study Guide with Complete Solutions.

MBA 706 Exam 1 Study Guide with Complete Solutions. Chapter 1 – The Strategic Perspective • Relationship between strategy and change o Change is the only certainty o Change can be cyclical (predictable) or evolutionary (unpredictable) o Change is an integral part of strategy ■ What drives change? -PEST (political / economic / social / technological) ■ What impacts change? - volatility / globalization / competition / redefine ■ What are the consequences of change? - new opportunities / strategic fit • Contribution of strategic marketing to business o Strategy is concerned with making major decisions affecting the longterm direction of the business - sustaining • Concept of marketing o “Achieving business success through a process of understanding and meeting customer needs.” o Involves many activities: Advertising, branding, pricing, research, personal selling, etc. o Marketing defines how the organization interacts with its marketplace • Focus of strategic business decisions o Business definition - what business are we in (Marketing Myopia) o Core competencies - what do we do well - what is our sustainable competitive advantages - what resources are needed to sustain this competitive advantage ■ Training and skill development, etc. o Integrating functions areas within the organization ■ Coordinating marketing with other departments, etc. o Consistency of approach and focus • Types of change o Cyclical (predictable) - yearly trends o Evolutionary (unpredictable) - impact of competition, environment, etc. • Balanced scorecard for measuring success o Business success should not just be measured by financial measures o The balanced scorecard approach involves taking both financial and non-financial measures to examine the benefits delivered to all the organization’s stakeholders ■ Financial measures ■ Customer measures ■ Internal activity measures ■ Innovation and learning measures o Becomes the basis for evaluating the strategy • Purpose of marketing strategy o The strategy aims to define core competencies, understand the external environment, and offer an integrative, consistent approach to decisionmaking o Develop a unique position - make different choices than others o Integrating functions areas within the organization - efficiency o To simplify managerial decision-making when it comes to marketing decisions. o Marketing aims to transform corporate objectives and business strategy into a competitive market position. o The strategy must lead to action, not be a substitute for it. o Strategy development is a 3-stage process: ■ Analysis - environment & customer needs ■ Formulation - how to match products to customer segments ■ Implementation - process to achieve a competitive advantage o 4 P’s - The process should establish the organization's marketing mix ■ product ■ price ■ promotion ■ place o Marketing strategy aims to deliver the following: ■ Segmentation of the market (common groups, habits, etc.) ■ Target the customer ■ Establish competitive position • Business orientations o A company’s orientation defines its fundamental business philosophy, highlighting what is perceived as the primary route to success o 4 major business orientations: ■ Production orientation – mgmt. more focused on what product they should produce based on skills and knowledge ● Mass production/sales volume is key / how to sell more ● Efficiency of production & cost control ● What can we already do..what skills do we have to create a new product ● NOT necessarily what the market is looking for ■ Sales orientation – all about aggressively selling and convincing customers to buy products ● Sales volume is key/focus on aggressive sales ● Insurance in our auto industry - requires salesmanship ■ Market orientation – often the most successful orientation because it’s customer-focused ● Provides the market with what it wants…NOT on what we can already do ● Requires adjustment in the org to meet the needs of customers ● Build loyalty & offer value o Marketing can be more than a functional activity. It can be adopted as a business philosophy – marketing orientation ■ The five elements of a marketing orientation philosophy ● Customer-focused - build loyalty and customer base ● Competitor-focused - watch rivals, assess their capabilities, benchmark our products vs. theirs ● Integrate marketing into the business - across departments - every department plays a role o “Marketing is too important to be left only to the marketing department” – David Packard, Cofounder of Hewlett-Packard ● Strategic vision - mission, values, vision statement ● Realistic expectations - capabilities and resources MATCH goals and external conditions.