Global Strategic Market Management (GSM)

1
Global Strategic Market Management (GSM)

• Malin Brännback
• Fall/Spring 2004/2005

2
Course Outline

• W. 50-51 Dec 7 and Dec.13, Introduction. What is
  strategy, strategic management, and global market
  management and what is culture, Culture
• Questions W. 50-51
• Hand-out of assignment on Dec.13 to be prepared
  for January 11
• Hand-out of assignment to prepared for January 18

3
Course Outline

• W. 2 January 11
• Global Brands Brand New
• W. 3-7 Jan. 18-Feb. 15, Strategy Workshop
• Different Schools, Perspectives, and Tools
• Articles to be read for each workshop summaries
  by you
• Large assignment to be handed in W.9 Friday March
  4 at 15.00
• NO EXAM!

4
Strategy, strategic management
5
(No Transcript)
6
Strateginen sekamelska..(Prof. Juha Näsi, JYU,
1992, p. 2, Liikejohto ja johtajuus, esseitä
asioiden ja ihmisten johtamisesta)
Yksi sankari tulee ja kirjoittaa, että liikeidea
on se suuri salaisuus, seuratkaa siis minua!
Toinen saapuu paikalle ja yliviivaa
liikeideakeskustelun ja väittää, että mission
ja creed ne vasta avainsanoja ovatkin.
Ilmestyy kolmas kurssittaja, joka nauraa ja
kertoo, että pojat puhuvat puutaheinää se jokin
on johtajan aivoissa ja se jokin on visio eikä
mikään tuuri. Kunnes lopulta lavalle änkeää
viimeisin saarnamies. Hän arvelee, että
visiomies on periaatteessa oikeassa, mutta
käytännössä väärässä avain on kyllä aivoissa,
mutta ei sen nimi mikään visio ole, vaan agenda
se on ja sillä siisti!
7
Onko strategia siis kielipeliä?

• Puhuvatko veijarit samoista asioista eri nimillä
  vai tietenkin hieman eri asioista samoilla
  nimillä??
• Valitettavasti epäselvyydet eläävät paljon
  syvemmällä
• Peruskäsite eli strategia ja käsitteen luonnetta
  ja olomuotoa - strategian idea - koskevat
  käsitykset voivat olla peräti erilaisia.
• Seuraavaksi yksi lääke, jossa on kaksi osaa.

8
Soitamme siis strategian vellikelloa ja paikalle
saapuu 4 ritaria..
1. Edustaa suurta kansianvälistynyttä
monialayhtymää, napauttaa paksua mappia ja
toteaa, että siinäpä se - strategia. Mapissa on
457 sivua, se on siisti, täsmällinen ja
vakuuttava. Mietimme hetken ja tajuamme, että
tämä strategiaidea on eräänlainen tiivistetty
kaiku joka toistaa perinteisen amerikkalaisen
strategiakäsitteen Yrityksen strategia on
määritelty kokonaisuus, joka esittelee yrityksen
toiminta-ajatuksen, päämäärät ja tavoitteet,
paljastaa yrityksen toimintaperiaatteet ja
suuntaviivat edellisten saavutta- miseksi,
hahmottaa välttämättömän organisaation sekä
nimeää yrityksen eri intressenteilleen tuottaman
tuloksen Strategia tarkoittaa siis suunnitelmaa
9
Den andra riddaren

• 2. Tulee toinen ja tokaisee
• Meille koko asia on hyvin yksinkertainen. Me
• myymme X-maasta tuotuja kodinkoneita
  Pirkanmaalla.
• Kuulumme vapaehtoiseen Y-markkinointiketjuun.
• Tuotteemme ovat pikkuisen yli keskitason
  laadultaan
• ja hinta taas pikkuisen alle. Siinä kaikki.
• liikeidean käsite, tuote-markkina-ajattelu ja
  yksinker-
• taisuuden ylistys
• Strategia on yhtä kuin reviiri

10
Den tredje
3. Kolmas on menestynyt yrittäjä, erittäin
kokenut teolli- suusneuvos, joka on valtakuntansa
omin käsin rakentanut, kunnioitettu ja
pelättykin. Hän haluaa neuvoa Ei meillä
koskaan mitään strategiaa ole ollut, eikä tulla
tarvitsemaankaanKaikki mitä on tehty, on
mietitty tämän tukan alla..On meinaan ollut
riittävän kapea tuotesektori.. Ja se osattu
viimeisen päälle..Rautainen työnjohto ja
luottoyhteydet avainammattimiehiini..Pari hyvää
myyntitykkiä, aina ja hyvät suhteet
viranomaisiin. Hänen strategia on ollut
jonkinlainen visio, näkemys tai
käsitys Strategia on ohjaava maailmankuva
11
Och den fjärde
4. No strategia on siis sellainen kokonaishahmo
yrityksen toiminnasta, siinä on niinku ajatusta,
tilannetta ja toimintaa.. Se siis niinku muuttuu
tilanteen mukaanVoitais ajatella, että se on
niinku kanoottimies joellakoskia ja
suvantoja tyyntä ja vuolastasuoraa ja
mutkitteluaohjaaminen riippuu siitä, mitä on
välittömästi edessä ja mitä näkyy sitten vähän
kauempanasiis ihan seuraavan mutkaan
asti Strategia on toimintamallina päätösten
jatkuvassa virrassa. Härmäläisittäin soveltaen
Mintzbergiläisiä ajatuksia
12
Lets add and divide with four
Strategy is a plan Strategy is area Strate
gy is guiding worldview Strategy is action
model in the con- stant flow of
decisions
Strategy is Strategy is the plot of
the firms action(s), the string that
pulls together the events
13
Yrityksen toiminnan juoni, sen tapahtuman
punainen lankaStrategy is drama, every business
is a stage
14
Strateginen johtaminen vastaavasti pyrkimystä
tuon toiminnan juonen ja punaisen langan
käsissäpitämiseen. Monisovitteinen määritelmä
se sopii päätöksentekijän strategiaan, kun
mietitään mitä halutaan ja mitä pitää tehdä
yrityksen tulevaisuudessa ja sopiihan se
myös historijoitsijan strategiaan, kun
selvitetään jälkikäteen, mitä todella on
tapahtunut.
15
Näsin strateginen kolmio

• Tiede
• miten ja miksi
• yleisesti ottaen
• on?
• Science/Theory

• Käytäntö
• miten juuri
• nyt ja tässä on
• ja/tai pitäisi olla?
• Practice

Strategointi

• Oppi
• mitenkä strategiat yleisesti
• pitäisi rakentaa ja valita?
• Knowledge, wisdom, understanding

16
Strategy, tactics, and operations
Strategy 5 yrs Tactics 1-3
yrs Operations NOW
17
Mission, Objectives, Strategies, and
Tactics/Policies
Mission Top managements view of what the
organisation seeks to do and become over the
long term
Objectives Specific performance targets in each
of the areas covered by a firms mission
Strategies Means through which firms accomplish
mission and objectives
Tactics/Policies Actions that firms undertake to
implement their strategies
18
Vision, mission, strategy
Vision

• What are the assessments
• about the future?
• For the industry, the com-
• pany, competitors?
• Which discontinuities lie
• ahead?

Mission
With respect to the visions, what is the mission
of our company within the next 5-10 years?
Strategy
Is about the direction of organisations, most
often, business firms. It includes selection of
goals, choice of products, choice of scope and
diversity, positioning decisions, design of org.
structure and work, etc. Choices with critical
influence on success and failure.
19
Vision

• Visions from a particular industry are linked
  with global visions.
• An industry does not exist in a kind of social
  vacuum
• What are global visions and how will they affect
  the industry?

20
Mission

• Mission statement is a statement of the companys
  strategic intent in the future, fitted with the
  visions of the industry and the business
• Mission statement forms the basis of strategy,
  which is a more detailed declaration of the
  mission and the visions

21
What is culture?

• se on sitä kun lauletaan ja soitetaan next
  door kid
• no teatteri kyllä on sitä, tai oli anakin ennen
  Oulua man in the street
• culture is science and art
• Icehockey is culture voice in the audience
• Rauman giäl onsupporter of Lukko
• handcarved boats..crafts teacher
• I believe that cultures begin with leaders who
  impose their own values and assumptions on a
  groupSchein

22
Deciphering the concept of culture

• A climate and practices that organisations
  develop around their handling of people
• right kind of culture or a culture of quality
  - certain values
• there are better or worse cultures, stronger or
  weaker (Kotter)

23
Shared or held in common

• Observed behavioural regularities when people
  interact the language, the customs, the rituals
• Group norms implicit standards and values that
  evolve
• Espoused values the articulated, publicly
  announced principles and values - product
  quality, price leadership

24
Shared or held in common

• Embedded skills special competencies
• Habits of thinking, mental models, linguistic
  paradigms the shared cognitive frames guiding
  perception, thought and language used
• Shared meaning the emergent understandings
• Root metaphors or integrating symbols

25
Deciphering culture

• Why not just norms, values, beliefs, behaviour
  patterns, rituals and traditions, etc.
• Culture has two more dimensions
• structural stability
• patterning
• Accumulated shared learning
• History of shared experience

26
Culture defined

• A pattern of shared basic assumptions that the
  group learned as it solved its problems of
  external adaptation and internal integration,
  that has worked well enough to be considered
  valid and, therefore, to be taught to new members
  as the correct way to perceive, think, and feel
  in relation to those problems.

27
Levels of culture
Visible structures and processes
Artefact
Strategies, goals, philosophies
Espoused Values
Unconscious, taken-for granted beliefs,
thoughts feelings, perceptions
Basic Underlying Assumptions
28
The levels

• Artefacts all we see, hear, and feel, e.g.
  architecture, language, technology, products,
  artistic creations, style, emotional displays,
  manners, etc
• The problem is that symbols are ambiguous
• Ones interpretation will be projections of ones
  own feelings and reactions

29
The levels

• Espoused values require joint action (social
  validation) enabling observation of outcome
• Requires a shared basis for determining what is
  factual and real
• Cognitive transformation shared value or belief
  shared assumption
• Espoused values can predict what people will say,
  it requires prior learning to predict what they
  will do

30
The levels

• Basic assumptions something becomes treated as
  reality theories-in-use
• Thriving for cognitive stability
• psychological defence mechanism

31
Understanding global competition
32
National competitive advantage

• Competitive analysis need to focus on a national
  level
• The forces influencing an industry should be
  examined
• Competitive positions within an industry are
  important
• strategic groups
• The competitive advantage of individual companies
  have to be taken into account

33
Determinants of national advantage
34
Porters diamond

• Factor conditions
• Human resources
• Physical resources
• Knowledge resources
• Capital resources
• Infrastructure resources

• Demand conditions
• Composition of home demand
• net disposable income
• The size and growth of home demand
• How does a nations home demand pull the nations
  products into foreign markets

35
Related and supporting industries Firm
strategy, structure and rivalry

• Sub-contractors
• Differences in management styles, organizational
  skills
• Capital markets and attitudes toward investments
  are important

36
Influences on the development of related and
supporting industries
A group of domestic rivals encourages the
formation of more specialized suppliers as well
as related industries
Large or growing home demand stimulates
the growth and deepening of supplier industries
Specialized factor pools are transferable to
related and supporting industries
37
Influence on domestic rivalry
world-class users enter supplying indutries
Factor abundance or specialized factor- creating
mechanisms spawn new entrants
Early product penetration feeds entry
New entrants emerge from related and
supporting industries
38
The complete system
Chance
Govt
39
Questions for w. 50-51

• Analyse and compare the following organizations
  website
• London School of Business and Åbo Akademi
  University
• Nokia and Ericsson
• Raisio Group and Unilever
• UPM and Stora-Enso
• What is their vision of their business
• What is their mission statement?
• What is their strategy??
• Corporate values? Espoused values

40
Questions for W. 50-51

• How would you apply Porters diamond for the
  Finnish forest industry Finnish mobile telephone
  market?

• How would you apply Porters diamond for
• Estonia
• India
• Brazil

41
How would you go about assessing a global market?
42
Global information needs

• Economic and competitive environment
• Technological environment
• Political environment
• Regulatory environment
• Legal environment
• Social and cultural environment

43
Key points

• The execution of global marketing research may
  differ substantially from the process of domestic
  research
• Global market researchers are faced with broader
  competition, different variables to be
  considered, and lack of infrastructure
• Marketers need to learn about various aspects of
  foreign market environments
• Underdeveloped communication infrastructure can
  hinder the information collection process

44
More key points

• The global marekt researcher must analyse many
  national markets, each of which has unique
  characteristic. However, it is important that
  data have
• the same meaning or interpretation
• the same level of accuracy
• precision of measurement,
• and reliability
• The need of data compatibility in global
  marketing research gives rise to a number of
  issues dealing with
• problem definition
• data analysis

45
What kinds of secondary data sources would you
use?
46
Secondary data sources

• Can be used with minimal effort and cost
• However, pay attention to how old that data is!
• Major sources are governments, international
  organizations, trade associations, directories,
  and electronic databases
• Criteria for using secondary data sources are
• accuracy, availability, timeliness, costs, and
  comparability

47
How would you go about primary research in global
marketing?
48
State-of-the-art

• Identify the research problem
• Identify the market opportunity
• Develop a research plan
• What do you have to consider?
• Information worth in ,, or
• What will we gain with this data?
• Whats the cost of not getting this data
• IT IS NECESSARY TO DO A COST-BENEFIT ANALYSIS!!

49
State-of-the-art

• Collecting data
• survey or interviews or what
• Sampling
• Analysis
• demand pattern analysis
• income elasticity measurement
• market estimation by analogy
• cluster analysis
• Findings

50
Terminology
MARKET
The set of all actual and potential buyers of a
product
POTENTIAL MARKET
The set of consumers who profess a sufficient
level of interest in the market offer
AVAILABLE MARKET
The set of consumers who have interest, income,
and access to a particular market offer
TARGET MARKET
The part of the available market the company
decides to pursue
MARKET DEMAND
The total volume of a product that would be
purchased by a defined customer group in a
defined geographical area in a defined time
period in a defined marketing environment under a
defined marketing program
51
Segmentation, targeting, and positioning
52
Assessing the US Geographic Variables
Pacific, Mountain, West North Central, West South
Central, East North Central, East South Central,
South Atlantic, Middle Atlantic, New England
Region
Under 4,999 5,000-19,999 20,000-49,999 . .
. 1,000,000-3,999,999 4,000,000 and over
City ormetro size
Density
Urban, rural, suburban
Climate
Northern, southern
53
Psychographic segmentation

• Based on attitudes, values, and lifestyle
• activities, interests, and opinions
• Porche
• Top Guns, 27 - driven and ambitious, care about
  power and control, expect to be noticed
• Elitists, 24 - old money a car even an
  expensive one not an extension of ones
  personality
• Proud patrons, 23 - ownership counts a trophy,
  reward for working hard
• Bon vivants, Cosmopolitan jet setter, thrill
  seekers
• Fantasists, 9 - car represents an escape, dont
  care about impressing others even a feeling of
  guilt

54
YoungRubicams cross-cultural consumer
characterization
Attitudes Work Lifestyle Purchase
Behaviour ----------------------------------------
--------------------------------------------------
- Resigned Poor Unhappy Labour Shut-in Staple
Distrustful Unskilled Television Price Strugg
ling Poor Unhappy Labour Sports Price Dissatis
fied Craftsmen Television Discount
stores Mainstreamers Happy Craftsmen Family H
abit Belong Teaching Gardening Brand
Loyal Aspirers Unhappy Sales Trendy
sports Conspicuous consumption Ambitious White
collar Fashion magazine Credit Succeeder Happy
Managerial Travel Luxury Industrious Professi
onal Dining out Quality Transitionals Rebellious
Student Arts/crafts Impulse Liberal Health
field Special interest Unique
products magazines Reformers Inner
growth Professional Reading Ecology Improve
world Entrepreneur Cultural events Home-made/grow
n
55
Questions for W. 50-51

• Why is lifestyle data, on its own or in
  combination with other information such as
  geographic patterns so important to consumer
  goods companies?

• Which steps are involved in developing buyer
  typologies based on empirical data?Compile a
  list of tasks required.

56
Questions w. 50-51

• Geographic
• Lets take Southeast Asia
• Japan
• South Korea
• China
• Indonesia
• Malaysia
• Vietnam
• In what ways are these countries different? What
  are the implications for segmentation?
• demographic, psychographic, behaviour

57
Global Targeting
58
Criteria for targeting

• Basically the same as for a single country
• current size of the segment
• anticipated growth potential
• competition
• compatibility and feasibility

59
Key points for global targeting

• After defining potential global target groups it
  needs to decide which group to target
• remember the recipe for failure is to try and
  please everyone
• Which is then the most suitable marketing
  strategy?

60
New products and services inglobal marketing
61
Key questions to ask

• How big is the market for this product at various
  prices?
• What are the likely competitive moves in response
  to our activity with this product
• Can we market the product through existing
  structures? If not what changes and what costs
  will be required to make the changes?

62
Key questions to ask

• Given estimates of potential demand for this
  product at specified prices with estimated levels
  of competition, can we source the product at a
  cost that will yield an adequate profit?
• Does this product fir our strategic development
  plan?
• Is the product consistent with our overall goals?
• Is the product consitent with our available
  resources?
• Is the product consistent with our management
  structures?
• Does the product have adequate global potential?

63
Key points

• New products and services can be
• New to the consumer and new to the company
  (product innovation)
• New to the consumer but not to the company
  (product line extention)
• Not new to the consumer but new to the company
  (new product duplication)

64
To test a product or service under actual market
conditions before proceeding with full-scale
introduction is, in global markets, even more
important than in local or national markets