Business Strategy

1
Business Strategy the Marketing Program
2
Business strategies

• (Porters typology)
• Overall cost leadership
• broad focus
• narrow focus
• Differentiation
• broad focus
• narrow focus

3
Porters Typology
Cost Leadership
Differentiation
Narrow Focus
Broad Focus
4
Business strategy

• Miles Snows typology
• Prospectors
• Defenders
• Analyzers
• Reactors

5
Miles Snow Typology

• Prospectors
• Aggressive in new product development
• First mover
• High expenditures in new product RD
• Often found in technology-oriented industries

6
Miles Snow Typology

• Prospectors
• Often found in new industries
• Often in introduction or early growth stage of PLC

7
Miles Snow Typology

• Prospectors
• Customer segments often not well defined
• Relatively inefficient in terms of cost-per-unit
• Often cash hungry
• Sharing resources with other SBUs diminishes
  flexibility

8
Miles Snow Typology

• Defenders
• Focus on maintaining position
• may entail aggressive marketing efforts
• Typically found in mature markets (grocery, soft
  drinks, etc.)
• Cash cows

9
Miles Snow Typology

• Defenders
• Targets mass market
• Repeat/replacement buyers
• Underpinned by stable technology
• Stable, established competitors

10
Miles Snow Typology

• Defenders
• Compete through
• cost-reduction through
• process engineering
• operating synergies with other SBUs
• quality improvement RD
• price competition
• promotion

11
Miles Snow Typology

• Defenders
• Low-cost defenders (PorterMiles Snow)
• significant economies of scale and manufacturing
  efficiency (process engineering)
• low-cost sources of supply

12
Miles Snow Typology

• Defenders
• Low-cost defenders (PorterMiles Snow) (contd)
• try to maintain the low cost position in their
  markets
• may focus on low price offerings at the expense
  of marketing, sales, or service
• often focus on commodity-type products

13
Miles Snow Typology

• Defenders
• Differentiated defenders (PorterMiles Snow)
• differentiated offerings
• cost of differentiation increases cost structure
  
• often found in fragmented markets

14
Miles Snow Typology

• Analyzers
• Elements of both prospectors and defenders
• Focus on maintaining position in core markets
• Selective pursuit of new product opportunities

15
Miles Snow Typology

• Analyzers
• Low cost analyzers (PorterMiles Snow)
• maintain low cost position when selectively
  expanding into new markets
• Differentiated analyzers (PorterMiles Snow)
• expand into new markets with differentiated
  offerings

16
Miles Snow Typology

• Reactors
• No well-defined strategy
• Reactive decision-making

17
Porter Miles Snow Combined (BWL, p. 216)
Emphasis on new product-market growth (Miles
Snow)
Prospector
Analyzer
Defender
Reactor
Competitive Strategy (Porter)
Differentiation
Differentiated Defender
Differentiated Analyzer
Low-cost Defender
Low-cost Analyzer
Cost Leadership