Chapter 5 - Understanding your business model & developing strategy. Marketing is at the heart of an organization because its task is to identify and serve customers’ needs. In essence, marketing spans the boundaries between a company and its customers. It is marketing that delivers a company’s products and services to customers and marketing that takes information about those products and services, as well as about the company itself, to the market.
Trang 1UNDERSTANDI NG YOUR BUSI NESS MODEL &
DEVELOPI NG STRATEGY
Chapt e r 5
Trang 2Your first steps are to…
q Select a business model
q Determine a basic strategy category
Trang 3Create your business model
Trang 4requires high volume
0
2
4
6
8
10
12
Operating
Income $1,129 $1,406 $862 $676 $745
$178
Revenues just exceed
costs
2009 2010 2011 2012 2013
Media
Electronics & Merchandise Cost of Sales Operating Expenses
Trang 5ü Be First (or very early) into the Market
To Succeed as a First Mover,
Entrepreneurs Must…
First movers rarely win and its an expensive strategy to
take
Trang 6First Mover’s are Often Surpassed
Social Networking Friendster Facebook
Video Games Atari Microsoft X Box
Web Browser Mosaic Google Chrome
Internet Search Engine Excite Google
Word Processing Software WordStar Microsoft Word
Personal Computer Altair Lenovo
Email Juno Google Gmail
Diet Soda No-Cal Diet Coke
Presentation Software Harvard Graphics Microsoft PowerPoint
Online Bookseller Book Stacks Unlimited Amazon
ATM Machines Docutel Diebold
Trang 7To win, your strategy must be to be one, or more, of these…
Trang 8Founders need to create a culture and align the employees they select with the values and structure of
the company
Trang 9k
Devise Initial Market Test
Create a Platform
Develop your Entry Strategy
Trang 10Benchmark your Competition: The JetBlue Example
Trang 11New ventures should focus on testing the market and refining the business model; however, it is never too early to start thinking about
growth.
Trang 12q Replicability
q New sources of revenue
q New capital to fund growth
Franchising works best with service businesses that are easy
to replicate Be sure to monitor franchisees to maintain brand
purity.
Trang 13# Chain Franchise Sales
(US Stores, Total
)
Franchise (US Units)
Sales per store (US)
1 McDonald’s $35.4 billion 12,836 $2,500,000
2 Starbucks $12.7 billion 4,769 $2,660,000
3 Subway $11.9 billion 27,205 $475,000
4 Burger King $8.6 billion 7,090 $1,210,000
5 Wendy’s $8.5 billion 4,895 $1,594,000
6 Taco Bell $8.2 billion 4,995 $1,441,000
7 Dunkin Donuts $7.22 billion 8,047 $911,000
8 Chick-Fil-A $5.8 billion 1,837 $3,064,000
9 Pizza Hut $5.5 billion 7,337 $843,000
10 Panera Bread $4.5 billion 955 $2,500,000
Source: The 20 most successful Fast Food Chains in America, Business Insider, August 8, 2015
Top 10 US Franchisors Perform Well
Trang 14q Tangential & Adjacent Products
§ What new products make sense with your
current offerings? Current customers?
q Spread Existing Costs over Larger Product Base
q Accelerate Revenue Faster than Increase in Costs
q Leverage your Firm’s Experience
q Distribution Channels
q Supplier Relationships
Drive Growth with Product Mix
Trang 15q Customers
§ Go where they are
§ Mimic proven success strategies
§ Can you use the same vendors?
§ Any new costs? Leverage volume for better pricing
q Distribution
§ Same channels?
Consider these 3 topics before
expanding geographically:
Trang 16Gradual Global
Born Global
Born Again Global
Intermediating:
Networks & Alliances
Direct:
Technology
Technology
Transfer
Technology Licensing Outsourcing
M&A Activities
Venture Finance Franchising
Exporting
Foreign Direct Investment
Enabling Processes
Enacting Processes
There are 8 basic ways to
expanded internationally
Trang 17Technology Transfer - Reduces entry costs - Risk of losing the technology Technology
Licensing - Creates revenue, conserves resources, controls risk - Doesn’t extend the brand
Outsourcing - Cost-saving - Managing partners
Exporting - Cheap and easy - Extra sales and transport costs
- Moral hazard; adverse selection
Foreign Direct
Investment - Physical presence - Control of assets
- Expensive Franchising - Licenses an operational system - Risk of damaging the brand
Venture Financing - Enabling and enacting
mechanism - Can lead to mergers and acquisitions with foreign
companies Mergers &
Acquisitions - Established infrastructure - Company can grow quickly - Very expensive
Trang 18q Determine revenue and cost structure
q Choose a strategy
q Create a culture
q Seek and select people who fit culture and goals
q Plan entry approach, including benchmarks
q Plan growth drivers