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Comm 200 Lectures Part 1.docx

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Queen's University
COMM 200

Comm 200 Lectures Lecture 2-Role of the C-Level Manager (Management Team) - What is the primary reason for loss of market leader position in the marketplace? o Failing to adapt to new technology o Failure of C-Level Management - Think in short term profitability, long-term growth, and all within CSR The Marketplace - Direct competitors - Market convergences and disruptions - Ex: Apple is able to understand how technology marketplace is evolving; Steve Jobs understood that it was all going to converge - Managers must think about what’s happening externally and internally o VUGA- Volatility, Uncertainty, Globalization, and Adversity o Must be able to respond to rapid change Foundation Simulation - New management team - “Electronic Sensor Manufacturing Industry” - B2B Model- Business to Business o Our product is being bought by other businesses to include in their product - No divergence- closed market - How to expand our company in the face of these competitors - Strategic and tactic decisions - Attractiveness and our relative position against the competition - How to compete relative to competition - Both are attractive markets: o High tech smaller market higher growth o Low tech larger market slower growth - Can compete in both markets Simple Formula for Success Well-Directed/Positioned Strategy + Efficient and Effective Tactical Execution = Growth and Profitability - Want to think in terms of profit growth, not just market share (growth) Senior Management’s (C-Level) Responsibility - External and internal thought processes in forming a strategy - Market dynamics= changes in the marketplace (consumers) - Competitive dynamics= changes in competitors - Granulating= slicing the market into finer terms(i.e. Amazon’s Kindle instead of competing directly with Apple; price point and directed at its own market) - Positioning= relative to other competitors where do you want to put yourself; why buy our product instead of someone else’s (i.e. Apple’s Brand or Amazon’s price sensitivity) - Strategy is your view on a marketplace and what you can do with it - Execution in terms of the customer, finances, assets required, and internal processes Balancing the Scorecard - Financial: o Profit = Price – Cost; do you make money in current term? o Profitability= ability to grow and create profit in an ongoing manner o We need both! o Short-termism- trading short-term profit for long-term profitability - Customer: value proposition alignment; what we’re selling - Asset Development: capabilities, competencies, and capacities - Internal Business Processes: business system - All have to be done taking into consideration ethics and social responsibility The Road to Positioning - Two paths you can take: ROS approach (not going to be as large as our competitors, not the largest market share; maximize profit on each individual sale; i.e. coach purses or Apple (is doing both); willingness to pay) and PIMS (profit impact on the basis of market share; all about volume and scale; less per product but we’re going to sell a lot more products; i.e. Walmart) o Continuum; not mutually exclusive Analysing the Business System - 3 ingredients: o Company-centric analysis: key partners, key activities (things put into place that create your product; i.e. automated system), key resources, value proposition (where you want to leverage your product in the marketplace; benefits), cost structure; have to be integrated  3C Analysis o Bridge analysis: time to market, customer relationships, channel relationships, core beliefs, ethics and social responsibility o Market-Centric analysis: customer segments (needs assessment, market attractiveness, market positioning, substitutability), revenue model (composition and predictability) Role of C-Level Management Business System- The Complete Picture Lecture 3- Foundation Business Simulation Orientations - In order to effectively manage a company you need to take the time to understand competitive dynamics influencing the industry and the competencies, capabilities, and capacity of the company itself - TQM= total quality management - Success Formula: Strategy plan development + plan execution = company performance - Profitable growth - Industry Setting-B2B o B2B= business to business o Customers need sensors for their products o Demand influenced by customers - The New Competitive Landscape o Sensor’s Inc- monopoly, 240 million in sales, undifferentiated product line o Now there are 6 companies looking for different sensors for different marketplaces o We are ANDREWS: 40 million in sales, identical single product, undifferentiated market position, emerging market o Growth is anticipated to be very robust; 10-15% per year  Low tech is larger but grows slower  High tech is smaller but grows faster o Growth may be different from industry to industry o Look at capacity and competitors to see how much of market you can actually sell; fast-track signals you to how much growth each year and exactly how much demand there is o Overall demand will be positive over the 8 rounds; how much demand can we capture? Macro-Level Success Factors 1. Anticipating segment drift- performance and size evolution within each segment o As market evolves what the customer wants will change 2. Understanding what consumers want- consumer decision criteria 3. Predicting future demand- industry segment and your company 4. Recognize what must be done to achieve profitable growth The Marketplace - Very different customer demands between the two segments - Diversification in the use and utility of the sensors - In our industry we track the changing customer demand on a perceptual map - Over the years the customers will demand much faster and smaller sensors - Market sensors will continue to diverge based on size and performance Customers within Segments - Buying criteria: price, age, size, performance, MTBF (mean time before failure) - Shown on fast track Your Role as the C-Level Management Team Foundation Simulation Functional Areas 1. Research and Development - Determine what customers want - Design products to meet their needs o Size, reliability, performance - Develop new products to feed your pipeline and meet market demand - Make cost/benefit trade-offs to remain competitive 2. Marketing and Sales - Develop sales forecasts for each product - Determine price point for each product - Determine promotional expenditures for each product - Manage and grow the distribution channel (sales budget) - Manage your credit terms (AR and AP) 3. Finance 4. Production Lecture 4- Financial Statements 1 C- Level Managerial Responsibilities - Tactics around four quadrants: customer, financial, asset development, internal business processes The 3 C Analysis - Capabilities, competencies, capacity Assets + Labour (Talent) + Capital + Managerial Acumen = Business System or Model - Capital- financial and capital capacity, cost structure, revenue model - The 4 C- Complementary Dependency Key Components of Managing the Organization’s Finances - Revenue model: what makes you money and how will that change going forward, i.e. RIM is reliant on their Blackberry o Need to maintain its sustainability - Cost structure: what are the key drivers of cost? (operational expenses) What is the configuration of our cost base? (Product/variable costs or are they mostly indirect costs (e.g marketing, HR, accounting)?) o How do you respond when you don’t get the revenue you want based on the cost structure? Revenue and Costs - Profit= Revenue – Total costs - Or on a per unit basis: Profit= Price – Total Cost Margin Requiremen
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