Marketing Strategy –Strategic Position Assessment
Marketing Strategy –Strategic Position Assessment
Strategic position assessment: provides the basic information about the sources of value in the business and the drivers that create value in the business. The SPA should be done at two levels: The corporate level should focus on the value potential of the company’s portfolio of businesses. The unit level should focus on the value and drivers of the individual markets and products. Each business is assigned one for the five strategic objectives: 1. Divest: closed or sold 2. Harvest: capable of generating healthy CF with limited growth opps. 3. Maintain: mature markets with acceptable share and further share-building activities do not generate a (+) NPV. 4. Growth: positioned in attractive market where they posses competitive advantage 5. Enter: new growth opps.
Assessing the current position:
1. Weaknesses of financial measures: do not give reliable indicators on whether current performance is creating long-term value a. Company-level: most measures fall short in providing an indicator of long-term performance. b. Unit-level: can be even more misleading because they encourage deceptive comparisons across business units 2. Strategic value drivers: those organizational capabilities that have the most significant impact on the firm’s ability to create SV. These drivers shape a company’s ability to create and retain competitive advantage. c. To measure whether value is being created in any one year management must: i. Identify those org variables that are critically affecting competitive advantage and long-term cash flow. ii. Set target level performance on these iii. Measure performance achieved and compare to targets 3. Identifying value drivers: d. Should be a current asset or capability that has an impact on long-term value e. Should be capable of being measured and communicated f. Should
Strategic position assessment: provides the basic information about the sources of value in the business and the drivers that create value in the business. The SPA should be done at two levels: The corporate level should focus on the value potential of the company’s portfolio of businesses. The unit level should focus on the value and drivers of the individual markets and products. Each business is assigned one for the five strategic objectives: 1. Divest: closed or sold 2. Harvest: capable of generating healthy CF with limited growth opps. 3. Maintain: mature markets with acceptable share and further share-building activities do not generate a (+) NPV. 4. Growth: positioned in attractive market where they posses competitive advantage 5. Enter: new growth opps.
Assessing the current position:
1. Weaknesses of financial measures: do not give reliable indicators on whether current performance is creating long-term value a. Company-level: most measures fall short in providing an indicator of long-term performance. b. Unit-level: can be even more misleading because they encourage deceptive comparisons across business units 2. Strategic value drivers: those organizational capabilities that have the most significant impact on the firm’s ability to create SV. These drivers shape a company’s ability to create and retain competitive advantage. c. To measure whether value is being created in any one year management must: i. Identify those org variables that are critically affecting competitive advantage and long-term cash flow. ii. Set target level performance on these iii. Measure performance achieved and compare to targets 3. Identifying value drivers: d. Should be a current asset or capability that has an impact on long-term value e. Should be capable of being measured and communicated f. Should