Instituut voor Marketing Management, Hanzehogeschool Groningen International Business & Languages Werkcollege I Strategische Marketing I.

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1 Instituut voor Marketing Management, Hanzehogeschool Groningen International Business & Languages Werkcollege I Strategische Marketing I

2 Digitale marketing

3 Strategy statements should have three main themes:  the fundamental goals that the organisation seeks, which reflect the stated mission, vision and objectives;  the scope or domain of the organisation’s activities;  the particular advantages or capabilities it has to deliver all of these.

4 Key principles Effective statements should: Focus. Not just define what the organisation does but also exclude other activities. Motivational. Motivate employees; so be distinctive, credible, authentic and stretch performance levels. Clear. Be easy to communicate, understand and remember.

5 Mission statements A mission statement aims to provide employees and stakeholders with clarity about what the organisation is fundamentally there to do. It should answer the questions: ‘What business are we in?’ ‘What would be lost if we did not exist?’ ‘How do we make a difference?’ ‘Why do we do this?’

6 Vision statements A vision statement is concerned with the future the organisation seeks to create. It is an aspiration that will enthuse, gain commitment and stretch performance. A vision statement should answer the questions: ‘What do we want to achieve?’ ‘If we were sitting here in 20 years what do we want to have created or achieved?’

7 Statements of corporate values A statement of corporate values should communicate the underlying and enduring core ‘principles’ that guide an organisation’s strategy and define the way that the organisation should operate. Such core values should remain intact whatever the circumstances and constraints faced by the organisation.

8 Objectives Objectives are statements of specific outcomes that are to be achieved. Objectives are frequently expressed in: financial terms (e.g. desired profit levels) market terms (e.g. desired market share) and increasingly social terms (e.g. corporate social responsibility targets).

9 Samsung Electronics and Utrecht University Samsung: Goals ($400bn in revenue, and top five brand by 2020; note its vision – ‘Inspire the World, Create the Future’ – sounds more like a mission statement); its scope is clearly expanding, from mostly consumer electronics into health, medicine and biotechnology; and Samsung believes its competitive advantages lie in new technologies, innovative products, creative solutions and the brightest talent in the world. Utrecht University is clear about its mission (‘educate young people … address social issues’, etc.) and adds some specific quantified targets (retain third place, etc.); its scope is equally education, research, research training and addressing social issues; and its capabilities and advantages (over some rivals at least) lie in its university-wide education model, its Summer School and so on. Question 1 9

10 Samsung Electronics and Utrecht University On the face of it, there is not much difference between Samsung and Utrecht: strategy statements – and strategy – are relevant to both private and public sectors. Notice that Samsung features a financial goal (revenues), whereas Utrecht prioritises a quality goal (the highest number of programmes rated good or excellent). It might be worthwhile to challenge the claims to competitive advantage of both Samsung and Utrecht. http://www.samsung.com/nl/aboutsamsung/ Vraag 2 https://community.hanze.nl/sites/strategisch-plan-2016- 2020/Gedeelde%20%20documenten/Hanzehogeschool%20Groningen%20Onderwijsvisie%202020. pdf Question 1 10

11 Glastonbury: from hippy weekend to international festival In terms of the goals of Glastonbury, these are clearly stated at the outset in the sense of a ‘social mission’, reflected in continuing support of Greenpeace, Oxfam and similar. However, it is worth considering their recent complex relationship with corporate sponsors and the Mean Fiddler/Festival Republic. The scope of Glastonbury’s activity has clearly changed in operational terms, reflected in their name as a Festival for Contemporary Performing Arts, including circus and poetry. Their advantage may be their position as one of the most varied and high- quality festival experiences, or, their place as an ‘iconic’ event. http://www.glastonburyfestivals.co.uk/history/2014-2/ Website Glostonburry festivalhttp://www.glastonburyfestivals.co.uk/history/2014-2/ Question 1

12 Three horizons for strategy

13 It might be claimed that Glastonbury has been short sighted and purely focused on the first horizon of core arts activities. The recent dropping of Festival Republic might even suggest a narrowing of already slender horizons. Other festival organisers (e.g. Live Nation) have been more focused on the second horizon, with a portfolio of events and ticketing included in their approach. –A third horizon encompassing wider aspects of entertainment might be considered too, for example, various kinds of media for transmitting the contemporary performing arts. Question 2

14 Strategic position (1) The strategic position is concerned with the impact on strategy of the external environment, the organisation’s strategic capability (resources and competences), the organisation’s goals and the organisation’s culture.

15 Strategic position (2) Fundamental questions for Strategic position What are the environmental opportunities and threats? What are the organisation’s strengths and weaknesses? What is the basic purpose of the organisation? How does culture fit with the strategy?

16 A wide range of environment issues emerge with opportunities such as sponsorship and threats such as increased competitors. Issues such as the increasing legislation around events show how a threat to Glastonbury becomes an opportunity for one of its partners. Glastonbury seems to have some excellent resources but has needed others (e.g. Festival Republic) to fully develop capability. The hippy culture back at the start of Glastonbury’s history has a clear impact on its ability to become financially sustainable. Question 3

17 Strategic choices (1) Strategic choices involve the options for strategy in terms of both the directions in which strategy might move and the methods by which strategy might be pursued.

18 Strategic choices (2) Fundamental questions for Strategic choice How should individual business units compete? Which businesses to include in the portfolio? Where should the organisation compete internationally? Is the organisation innovating appropriately? Should the organisation buy other companies, form alliances or go it alone?

19 The case starts to question Glastonbury’s ability to be different in the face of wide ranging competition. Leveraging the brand to create other festivals outside of the UK might be considered. Diversification into other products such as merchandise, recordings, artist management, broadcasting, etc. might be discussed. Question 4

20 Strategy in action (1) Strategy in action is about how strategies are formed and how they are implemented. The emphasis is on the practicalities of managing.

21 Fundamental questions for Strategy in action Which strategies are suitable, acceptable and feasible? What kind of strategy-making processes are needed? What are the required organisation structures and systems? How should the organisation manage the change needed? Who should do what in the strategy process? Which people and what activities. Strategy in action (2)

22 Evaluation of the strategic options from above should reveal a number that is suitable, acceptable and feasible. Yet, their future strategic direction cannot be developed without the cooperation of others. Glastonbury itself appears to be very reactive and their strategy is emergent. Though he appears to be a figurehead for Glastonbury, it is clear that leadership and change management may not come from Michael Eavis but be driven from elsewhere within the family. All in all, the case shows that being large and successful is not all that is involved in strategy – for the Eavis family, social issues, artistic integrity, legacy and control are important too. Question 5

23 Hollensen: Chapter 1: Questions for discussion 1, 2, 3, and 4 (Page 20) The two approaches have the same starting point: focus on customer satisfaction. Furthermore, both approaches need the same powerful instruments in the implementation of the marketing plan: personal selling, budgeting revenues and costs, etc. Question 1

24 The exchange-based TM approach is based on a notion of mass markets where individual customers are anonymous. The goal is to make customers choose one particular brand over competing brands. This easily creates a situation of competition between the marketer and the customer. In transaction marketing situations, customers, as unidentified members of a segment, are exposed to a number of competing products, and they are supposed to make independent choices from among the available options. The two parties have conflicting interests. The starting point is that the customer does not want to buy; he or she has to be persuaded to do so. Question 2 24

25 RM emphasises cooperation rather than competition and consequent conflict among the parties; and it emphasises cooperation rather than competition and consequent conflict among the marketing actors. In relationship marketing, where interactions and cooperation exist at some level, the customer and the supplier or service provider are not totally isolated from each other. The relationship is based on value creation in interactions between the supplier or service provider and the customer, cooperation is required to create the value that the customer is looking for. Of course, this does not mean that conflicts could not exist; however, cooperation is the driving force, not conflict. Question 2

26 Industries favouring RM: Complex computer-systems, building projects (because cooperation and partnership between the partners is needed to get a satisfactory solution for the customer). Industries favouring TM: Where mass production of standard products is taking place, like foodstuffs, components and raw materials (like cement). Question 3

27 Market situations are characterised by low customer interactivity/arm’s length and impersonal contact with manufacturer. Question 4

28 Hollensen Chapter 3: Questions for discussion 1, 2 and 3 (Page 107) From a relationship perspective the ability to use ‘human resources’ (HR) is extremely important. Also the ability to offer global service is very important as more and more firms will be sub-suppliers to big multinational companies, with cross-national operations. Question 2 A firm’s competitive advantage ultimately results from an effective combination of national circumstances and company strategy. A firm gains important competitive advantages from the presence in its home nation of world-class buyers, suppliers and related industries. They provide insight into future market needs and technological developments. They contribute to a climate for change and improvement, and become partners and allies in the innovation process. Question 1

29 A firm’s competitive advantage ultimately results from an effective combination of national circumstances and company strategy. A firm gains important competitive advantages from the presence in its home nation of world-class buyers, suppliers and related industries. They provide insight into future market needs and technological developments. They contribute to a climate for change and improvement, and become partners and allies in the innovation process. Question 2

30 Some writers argue that some kind of regional competitiveness exists, because the national diamonds within regions (e.g. North America and EU) are interrelated. For example, Canada’s national diamond is highly integrated with the United States, and maybe we can talk about a North American competitiveness. Question 3

31 Figure 3.3 Development of a firm’s international competitiveness