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Strategic Marketing Lecture 1Resource-based view (RBV) of competitive advantage
> Management of strategic capability is central for achieving competitive advantage
• Importance of building on core competencies to gain competitive
advantage
> Emerged early 1990s
Marketing resources
Marketing assets
> Resource endowments the firm has built or acquired over time
> 4 main types
• Customer-based assets
• Supply chain assets
• Internal marketingsupport assets
• Alliance-based marketing assets
Marketing capabilities
• Marketing capabilities enable a firm to build sustainable relationships with
customers
• Different capabilities
- Advertising, promotion and selling
- Pricing and tendering
- Product and service management
- Distribution and logistics
• Which capability has strongest impact on performance?
• Meta-analytical results
- R&D and Operations capabilities have a lower impact on business
performance than marketing capabilities
- Would this always hold?
,Disentangling profits
• What is driving profits?
- Revenue growth and margin growth as the two primary components
of profit growth.
- Marketing capabilities influence both revenue growth and margin
growth, although CRM capabilities and brand management have
opposing effects.
• CRM vs Brand management spending
> Increasing market complexity
• Developments such as:
- Increasing number and types of media,
- Empowered customers, and
- Data availability
… require
- “vigilant market learning” (alertness, curiousness); early warning
systems;
- Adaptive market experimentation; small, targeted experiments;
“failures have a therapeutic role”; and
- “open marketing” (networks of partners)
> Dynamic and adaptive MC
, EXTERNAL FACTORS
The business environment
The macro-environment
• 6 domains
Political, economic, social (&cultural), technological, environmental, legal
PESTEL analysis
• Numerous factors can be distinguished and listed
• Opportunities and threats
• Focus on key driving factors of change
- High-impact factors likely to affect significantly the success or failure
of strategy
- Must be addressed with priority
- Many other changes will depend on these key drivers
Scenario analysis
• High levels of uncertainty associated with rapid change
• Difficult to predict the future impact of different factors
• Solution: building multiple scenarios
- Detailed and plausible view of how the business environment might
develop in the future
- Based on key drivers for change about which there is a high level of
uncertainty
- Not predicting the unpredictable, but considering plausible
alternatives
- develop and evaluate strategies for each scenario
- Danger: not looking at extreme scenarios, but only at the moderate
one(s)
Scenario analysis
• Especially useful when
- Limited number of key factors
- High level of uncertainty about the influence
- Outcomes could be radically different
- Organizations have to make substantial commitments into the future
that are highly inflexible and hard to reverse
• Example
- Shell
, Industries and sectors
> Industry
• A group of firms
- Producing the same principal product
- Producing products that are close substitutes for each other
> Sector
• The concept of industry for public services
- E.g. social services, health care, education
> The dynamics of industry structure
• How do competitive forces change over time?
- Industry life cycle
Competitors and markets
> Analyzing competitors and markets
• Industry level may be too aggregate
> Strategic groups
• Organizations within a same industry
- With similar characteristics
- Following similar strategies
- Aimed at similar customers or customer groups
• Based on two major categories of characteristics
- Scope of the activities
- product range, geographical coverage, distribution channel
- Resource commitment
- brands, marketing spend, extent of vertical integration
Competitors and markets
> Strategic groups (coco cola, pepsi)
> Strategic groups
• Three main advantages
- Understanding competition
- who are direct competitors?
- what distinguishes the organization from most other groups?
- Analysis of strategic opportunities
- identify “white spaces”, gaps between strategic groups
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