MKT 2210 Lecture Notes - Strategic Business Unit, Total Quality Management, Sbus
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setting strategic directions
A. a look around: where are we now?
1. customers. know what customers want and how they want value delivered.
stay close to the customer.
2. competencies. an organization’s special capabilities, including skills,
technologies, and resourses, that distinguish it from other organizations. these
competencies should provide a competitive advantage, a unique strength
relative to competitors, often based on quality, time, cost, or innovation.
many firms today seek to develop a competency in total quality management
(tqm). quality, as used here, means those features and characteristics of a
product that influence its ability to satisfy customer needs many firms try
to improve their quality through benchmarking, discovering how others do
something better than your own firm so you can imitate or leapfrog
3. competitors. organizations must study who the competitors are and
how they are changing.
b. growth strategies: where do we want to go?
two techniques aid managers in setting direction. they are portfolio
analysis and market-product analysis.
1. business portfolio analysis
the boston consulting group’s (bcg) growth-share matrix is an
example of a technique that is useful in helping marketing
executives make resource allocation decisions. it is described
this technique breaks a large firm into a number of decentralized
profit centres — called strategic business units (sbu's) — in order to
simplify the resource allocation process. a strategic business unit
has several distinct characteristics. it:
a. is a single business that can be planned independently of
b. has its own competitors.
c. has one manager with profit responsibility.
information needed: the sbus are analyzed as though they were a
collection of separate investments. this is called business portfolio
analysis. the sbus are positioned on a growth-share matrix.
a. the vertical axis is the market growth rate — the annual rate
of growth of the specific market or industry in which a given
sbu is competing.
b. the horizontal axis is the relative market share — the sales of
the sbu divided by the sales of the largest competitor in the
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