Bussines management - Schemi

SWOT ANALYSIS (BUSINESS ANALYSIS)

Compare information in order to identify variables to analyse in order to take decisions

Suggest: analysis is important only if you decide fast

Swat logicà don’t face challenges where you are weak=don’t use strength to stay away from treats but use it to catch opportunity (competitive advantages)

Core skills: most developed skills of the company, Strong related to the origin of the company

Customer perception: can be a strength and a weakness, it depends from consumers

R&D: research and development better than competitors

You can fix a weakness (internal) and not threats (external)

SWAT analysis at different levels:

• Corporate level (entire company)
• Strategic Business Unit level (type of product)
• Product level (the name of the product)
• Market level (only the market where the business sells)

Avoid threats: assume manager who knows the opponent’s situation

Stages of market development:

• Introduction
• Growth
• Maturity

1. Cash cow: generates lots of money, creates cash and does not use cash because they are leaders in a mature market. The problem is maintaining market share by comparing market growth with business growth in demand. The gains are invested in the business and in other products.
2. Dogs: products that generate cash but use cash (margin zero or rounding zero), have low market share and low growth rate. They need cash to survive, which poses problems for the business.
3. Stars: have high income and high expenses. They face high growth rates but control trends in the market. They create and use liquidity in order to grow in the market. Stars can become cash cows when market shares of the product are stable and safe.
4. Problem child (question marks): products that compete in a growing market but are not leaders. They use cash in order to grow and require a lot of investment, which may not be very profitable. They can become dogs if the product fails or stars if the product becomes popular.
5. Product not leader: dogs and question marks.
6. Product leaders: stars and cash cows.
7. Products can slide from a

part to an other

Market mature/declining: cash caw and dogs

Growing market: stars and questions mark

Managers have the goal of reaching a balance portfolio: have products all over the market and the metrics (if there are no dogs, no problem)

Stars IMPORTANT: can become cash caw and bring money to the business

Question mark IMPORTANT: can become stars

Problem of investing less in question mark: if the stars products fails the business can be excluded to the market losing their market position

SBU analysis

McKinsey GE model: 7s

Organizational postulates of key internal factors to be successful

Strategy

Structure

System

Shared value

Skills

Style

Staff

Use model of analysis to understand the performance of the business in term of strategic or brand in market or product in strategic business unit

Divest: company decide to eliminate a dog to the market

Iconic products: possible dogs but iconic for the life of the

1. Evaluate competitive strength relative market share
2. If a market share of a product doesn't grow as expectation:
• Stop investing and concentrate in other products/markets
• Try again and invest more and better
3. SBA A (H-H): invest because of high strategic value, cash cow and stars
4. SBU L (H-L): invest in that if you want to develop, can be problem child
5. SBU Q (L-H): stay calm and invest when the market shows interesting signal of growth
6. SBU M (L-L): stay away
7. In growing market: limitations, not see the entire market, problems: political, lot of competition, etc.
8. Competitive strength and market attractiveness are indexes
9. If you want to evaluate, you have to create an index
10. Impose rating 1-5: 1 no attract - 5 high attract
11. Treat: if a variable is negative 5, it means the variable has low power
12. It is important to keep attention because you can select the variables that can make the company evaluation better or worse
13. POD = points

of differencePOP= points of parityPoI, POAI= points of interestDistinguishà product hight grow market and low growth (under the average of totalindustry)Some of the cost (when business eliminate the product) can persist and being chargedon other product whose are still aliveSome products don’t create revenue but can cover costsCompany has to create value in order to remunerate itself and the society

VALUE CHAIN

Support function (support primary activities):

INFRASTRUCTUREà facilities of a company

HRMà HUMAN RESOURCE MANAGEMENTà good hrm make the difference in choosinggood or bad workers

TECHNOLOGY DEVELOPMENTà offering something new and better to the costumer

PROCUREMENTà solid and sustainable supply chain

Primary function:

UPSTREAMàproduct enter in the company

Inbound logisticà goods to be transported inside a part of the company (buy or not andtransport from a location to another)Operationsà manufacture a product (input

into output)

Outbound logisticà transportation to retailer after the sell

DOWNSTREAMà product go out of the business

Servicesà support for the client after the sell

Marketing and salesà marketing mix and salesà make people think the real value is the perception value

CREATION OF VALUE compete with the

Company has to deal with valueà they create value but have to perception of the valueà how is the product value and how is its price perception of the price and the Real price

Difference with the (cost of the good)

Marketing sells the product but give the possibility of making sales on a part of the goods

Marketing is an organizational function and a set of processes for creating, communicating, and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders.

Marketing is meeting needs profitablyà PROFITS<=>COSTUMER SATISFACTION

Marketing management is the art and science of

choosing target markets and getting, keeping, and growing customers through creating, delivering, and communicating superior customer value. Marketing based on what customers want (implementation of the strategy). Target, position, and benefit of the product, communication, and distribution. Analyze what customers want and don't want. Package is fundamental and varies for every need. CUSTOMER EXPERIENCES: analyze needs of customers on a large scale. Estimate demand. Estimate competition. Determine what. Determine where. Estimate price. Decide on promotion. Provide services. Needs: stated needs, real needs, unstated needs, delight needs, secret needs. Marketing mix: product, place, price, and promotion have to communicate. Keep in consideration: right people, right process, and right physical advantages. VALUE CHAIN AND STRATEGIC PYRAMID: Different decisional levels: strategic, managerial, operational. Strategic: board of directors (entering new markets, diversification, mergers and acquisitions).

Business: Managerial studying and checking product and markets, how to develop a marketing plan.

Operational: Take the marketing plan and apply it, whether centralized or not.

Value chain: Can be in the country or above.

Manufacturing company: Normal value chain.

Service value chain: Cyclical. Circle value chain starting from the identification (problem solving), choice in what to do, execution, control if service satisfies final client.

There are more value chains linked: Supplier, organization, channel distribution.

The consumer buys the result of all those value chains.

Index to increase market share through distribution:

• Numerical distribution: Measure the number of stores where the product is sold compared with the total amount of stores where the category of product is sold.
• Weighted distribution: Type of stores (measure of the power of the stores) where the product is sold, total sales where my brand is sold divided by total.

sales of the product category weighted distributionà total sales of the store on the total sales Store penetration indexà how my brand is penetrated in the storeà in the store my brand is important?à how much my sales are in the store when my brand is sold Can be 100% in company who invest only in their product Market shareà ratio between my brand sales/ total market sales for product categoryà relation store penetration index and weighted distribution Market share=store penetration*weighted distribution How to increase market shareà increase store penetration index or weighted distribution Try to penetrate the store or increase the productà if I can increase them, it will increase market share Or I can choose better the store, reduce the stores, but high importance MARKET CONCENTRATION Market concentrationà sum of the largest four firm percentage of the industry Market highly concentratedà few competitorsà lot of market power Lowconcentratedà power fragmentise COMPETITIVE ADVANTAGESà delivering a superior value to customers and, in doing so, earning an above average return for the company and its stakeholders Able to create value but not profitabilityà not competitive advantage Only if you crate the value corresponding of the price the consumer will buy the product Promiseà why consumer have to buy a product instead of another Cost advantage or another advantage (quality, good-looking location, clock restriction, position) differentiationà offer difference instead of competitorsà if you are not able to offer something innovative there is no reason to take the product market scopeà abroad or narrow abroadà targeting the entire market narrowà company decide to focus in a nice cost leadership strategyà important know the origin of costs act on the cost that impact more on the product risky if your price is not the lower possible in the market or if yourproduct is not indispensable
differentiation strategy à witch part is more developed and is better than the competitors
focus à concentrate on a segment or a group better than competitors à risky and less profit à increase customer satisfaction
criticism of the strategy: companies have to have a mix and it’s very difficult
LENGUAGE OF RESOURCES AND CAPABILITIES
resources à inputs in order to produce goods (money, infrastructure, human resources and intangible resources as patents)
capabilities (not knowledge) à capacity to perform activities à combine activities and knowledge in