Quarter 4 The Skillful Adjustment

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Mental Discipline of Marketplace Live
ENVIRONMENTAL ANALYSIS
FEEDBACK
STRATEGY
Business Strategy
Business Performance
Assessment of Business Conditions
BUSINESS LEVEL
Market conditions
Marketing tactics
Market assessment
Market performance
Market objectives
Marketing strategy
Manufacturing conditions
Manufacturing strategy
Manufacturing tactics
Manufacturing assessment
Manufacturing performance
Manufacturing objectives
FUNCTIONAL LEVEL
Human resource conditions
Human resource strategy
Human resource tactics
Human resource assessment
Human resource performance
Human resource objectives
Financial conditions
Financial strategy
Financial tactics
Financial assessment
Financial performance
Financial objectives
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Q3 Conduct a Strategic Analysis

• Check financial performance
• Check customer reaction to brands, prices, and
  advertising
• Check production operations
• Check out competition
• strategic direction
• tactics
• markets response

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Q3 Skillfully Adjust Strategy
As needed, adjust strategy // brand designs and
prices // advertising sales management //
production plan Check finances Feed decisions
into Marketplace Live simulator
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Measures of Customer Satisfaction
Brand judgment (0 to 100) Price judgment (0 to
100) Ad judgment (0 to 100)
100 indicates complete satisfaction. 70 would be
a good brand and ad rating until new technology
is available in Quarter 4. Price ratings should
be near 100.
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Goal of Monitoring Customer Satisfaction
Give the customer what they want and do so
better than the competition.
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• Deduce the Markets Many Response Functions

Hot
Hot
Cold
Cold
Less
More
More
Less
Hot
Hot
Cold
Cold
Less
More
Less
More
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Based on Customer Feedback, Skillfully Adjust
Marketing Tactics
Revise brand designs or create new ones // Revise
ad copy Adjust prices // Hire more sales people
or deploy differently
Add or take away elements to find the sweet spot
in the customers response function.
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Competitor Benchmarks
Brand and ad designs // Prices and sale
priorities Sales strategy // Sales staffing // Ad
placements Demand by brand by segment Human
resources // Manufacturing
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Goals of Competitive Benchmarking

• Reverse engineer the strategy of each competitor
• Determine who is a threat and who is not
• Determine strengths and weakness of competition
• Emulate good decisions
• Predict direction of competitive moves
• Adjust strategy and tactics in reaction to
  competitor strengths and weaknesses and in
  anticipation of future moves.

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Financial Performance

• Firm profitability // Brand profitability
• Return on investment // Asset management // Etc.

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Goals of Financial Management

• Discover which brands, markets, and business
  functions are making the greatest and weakest
  contribution to the bottom line.
• Deploy resources to correct weaknesses and take
  advantage of strong performers.

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Managing Inventories and Cash The Razors Edge

• High production
• Lower unit production costs
• Risk of too much inventory
• Uses up large volumes of cash
• Risk of brand obsolescence (wrong product in
  warehouse)
• Low production
• Low cash requirements
• Higher per unit production costs
• Risk of too little inventory
• Stock outs // Lost revenue // Customer ill
  will (unhappy customers)

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Measurement of the Firms Performance
The Balanced Scorecard
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Why Use a Balanced Scorecard?
It is too easy to get caught up in market share
and short-term profits. Long-term viability
requires that managers also deliver customer
satisfaction and invest in the future. The
balanced scorecard measures both the long- and
short-term. The best managers will be good in all
areas measured.
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Action Potential of the Firm

• Financial performance x Market performance x
  Marketing effectiveness x Investments in the
  firms future x Creation of wealth x Asset
  management x Manufacturing productivity x
  Financial risk x HR management

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Learning Points for Q3
The Management of Strategy Learn From
Your customers Your competition Your operational
information Your employees Your financial
information to skillfully adjust your strategy
and tactics
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Learning Points for Q3
Using the tools of management accounting reports
(financial statements) industry financial
benchmarks (industry financial ratios) human
resource reports market feedback profitability
analysis (activity based costing)