SELECTED CUSTOMER ISSUES

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SELECTED CUSTOMER ISSUES Who are they? What is
their relative profitability? Describe the
segments in words so that you can design programs
to suit their heterogeneous needs What are they
consuming? When? How? With whom? With what else?
Always? Everybody? Can you co-opt them?
Solicit their help in product development and
design? - Lead users and co-developers (3M and
Microsoft) - Service provision through customer
communities - Sales force Recognize their
ability to harm you - New Coke - Houston PD -
Customer competition (home cooking) Customer
versus consumer - Organizational buying -
Family decision making Hard issues Price,
Income and Cross Elasticity Media habits,
persuasion (pictures/words, Canadian
anti-smoking ads, involvement, ) Store
Preferences Complexities Interactions within
customer elements, and across other
boxes (Lunds, Audi, e-drugs)
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SELECTED COMPETITOR ISSUES Competitor
Identification - Cross-price elasticities -
Substitutability performance, usage,
geography - Technological similarity - SIC (or
NAICS) codes But, Encyclopaedia Britannica
thought its competition was World Books and
Groliers Need a broader approach - Customer
needs focus (e.g., U S WEST) defines market
similarity - Resources, not just technology -
SWA and Amtrak
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BROADENING THE PLAYING FIELD RESOURCE
SIMILARITY Hi Lo M IV A Kodak
and SONY R I (Substitutors) K (INDIRECT
competitors) E Hi Intel and AMD NWA and
Hilton T (DIRECT competitors) (Complementors)
C O M II III M O Lo NWA and Fed
Ex NWA and Intel N (POTENTIAL
competitors) (NON-competitors)
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SOME IMPLICATIONS Quadrant I may have a large
number of players, but only some subset is
relevant, the consideration set - US WEST
How do you enter the consideration set, stay
there and keep others out? - Leaders keep others
out by not mentioning their name - Followers get
in by comparative advertising to associate
their name with the leader Resource
acquisition by potential rivals (quadrant III and
IV) - E.g., sales force, technology, property,
labor, equipment - Microsoft Quadrant IIIs
complementary competitors have a peculiar
dynamic. What should Hilton do when Northwest
drops prices?
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COMPANY ISSUES Internal goals and entrenched
strategies that are constraints - Brand names
and equity - Price Position - Distribution -
Technology and RD expenditure
Opportunities - Cost advantages - Fixed versus
variable cost structures - Changing your cost
structure (outsourcing) - Relationships with
like-minded entities
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COLLABORATORS/CONTRIBUTORS Identify them -
Channel members - Independent sales reps -
Brand Allies - Suppliers/vendors - Customers -
Complementors - Government Understand their
interests (what do they want?) - Can you co-opt
them? - When do they become a threat? What do
you want from them? - Information - Scanner
data - Money - Fees for services and
products - Access to markets - Diet Coke and
NutraSweet - Protection - MITI, DOJ Anti-trust
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INTERACTIONS The elements in the boxes affect
one another within boxes, as well as across
boxes. - Income and Price Sensitivity -
Education and Media savviness - Competitors
costs and other resources - Consumers Store
Loyalty and Channel members interests -
Competitors cost structures and companys
ability to respond - Consumers price
sensitivity and collaborator/contributor
self-interest This means that a holistic
analysis must consider the effect of a strategic
action on all elements of the theater of
operations Abstract strategic thinking
implications for strategy formulation, execution
and tactics Decisions about whom to pursue,
why and how, and with whose help while guarding
against what threat. One key positioning
decision choice of product quality level (and
how to communicate it)
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KEY TAKE-AWAYS Customer Empathy
Competitors Customers consideration set and
activity in resource markets Company Cost
structures and ability to price compete
(War-rooms) Collaborators Interests