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Lecture 4

ECON 344 Lecture 4: ECON344_Chapter 2

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ECON 344
Bharat Sud

CHAPTER 2 5: Types of organizations Business firm and non profit Strategy: Long term course of action to deliver a unique customer experience (currently 13 years is considered long term) Tactics: Short term plans 6: Organizational structure 1: Board of directors: Oversees the corporate, business unit, and functional levels of strategy 2: Corporate: Strategic management and organization goals (CEO, COO, VP) 3: Strategic business unit: Usually operate as independent units with their owncorporate strategygoals within the company (Canadian operation of Coca Cola) 4: Functional: Organized by departments with goals information systems, finance, RD, marketing, manufacturing, HR 8: Organizational foundation: Why does it exist? Core values: What business are we in? What industry can we enter? (Home Depots 79 core values) Mission statement: Defines organization scope, customers, markets, products, technology, and values Organizational culture: The atmosphere of the company and what they value, materialized Visionary organizations: establish a foundation, set a direction, strategize to develop and market successful products 10: Organizational direction: What will it do? Goals: Specific, measurable, attainable, relevant, time based (shortlong term) Marketing dashboard: Helps managers assess a business situation at a glance Organizational strategies: How will we do it? Variation by level: Corporate to SBU to functional Variation by offering: Type of offering the firm has Marketing videos Companies are growing out of traditional marketing There is more of a consumer marketer dialogue (for the popular brands) Less than 5 of companies in North America monitor their social media (small scale businesses) Companies with high budgets spend the most on marketing Loyal customers are willing to pay more moneyword of mouth loyal customers are demanding more It costs a lot more to acquire a new customer (20004000) than retain an existing one (<= 500) based on marketing, incentives, etc. 13: Organizational strategy: Where are we now? Competencies: Special capabilities that distinguish it from others (competitors cant compete this away) Competitive advantage: Something that is done better than the competition Benchmarking: Setting the standard (if leader), the minimal quality standards (if follower) Government mandate: Laws for quality standards that dont have the flexibility an industry association would 14: Growth strategy analyses: Where do we want to go? 1: Business portfolio analysis: Treat each SBU as a separate entity and evaluate the portfolio of entities (evaluate and either investdegrade SBU) 2: BCG analysis: Analyzing market growth and market share 3: Market product analysis: Looking to serve currentnew customers with currentnew products 15: Boston Consulting Group Analysis Introduction: Question marks (low market share with high market growth rate = capture market share) Growth: Stars (market growth rate is high with high market share = best brands) Maturity: Cash cows (high market share with a lownegative market growth rate = high returns) Decline: Dogs (low market share and low market growth rates = determine brand direction) 17: Market product strategies Market penetration Current market, current product: Sell more products in existing markets (hard for mature products) Market development New market, current product: Selling existing products in new markets (new customer regionsegment) Product development: Current market, new product: Selling new products in existing markets Diversification: New market, new product: Selling new products in new markets 19: Tracking strategic performance Marketing dashboard: Display of essential information related to marketing objectives Marketing metric: Measures the quantitative value of marketing activities
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