Cravens Capitulo 1

Cravens & Piercy 8th edition Chapter One

MARKET-DRIVEN STRATEGY
A. Market-Driven Strategy

Market-Driven Strategy

B. Becoming Market Oriented C. Distinctive Capabilities D. Creating Value for Customers E. Becoming Market Driven F. Challenges of a New Era for Strategic Marketing

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A. MARKET-DRIVEN STRATEGY
All business strategy decisions should start with a clear understandingof markets, customers, and competitors. The market and the customers that form the market should be the starting pint in shaping business strategy.
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Characteristics of a Market-Driven Strategy
Becoming MarketOrientation

Achieving Superior Performance

Determining Distinctive Capabilities

Customer Value/ Capabilities Match

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Why Pursue a MarketDriven Strategy?
Strongsupporting logic Achievements of companies displaying market-driven characteristics are impressive
Examples include: Dell Inc. Louis Vuitton Southwest Airlines Tesco Tiffany & Co. Wal-Mart Zara

B. BECOMING MARKET ORIENTED
Customer is the focal point of the organization Commitment to continuous creation of superior customer value Superior skills in understanding and satisfying customers Requiresinvolvement and support of the entire workforce Monitor rapidly changing customer needs and wants
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Ethical behavior Determine the impact of changes on customer satisfaction Increase the rate of product innovation Pursue strategies to create competitive advantage

Characteristics of Market Orientation
Customer Focus What are the customer’s value requirements? Competition IntelligenceImportance of understanding the competition as well as the customer Cross-Functional Coordination Remove the walls between business functions Performance Consequences Market orientation leads to superior organizational performances
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Becoming a MarketOriented Organization
Information Acquisition

Market Orientation
Information Acquisition
Gather relevant information oncustomers, competition, and markets Involve all business functions

Intuit’s Quicken
Cross-Functional Analysis of Information

Inter-functional Assessment
Share information and develop innovative products with people from different functions Zara

Shared Diagnosis and Coordinated Action

Shared diagnosis and action Deliver superior customer value
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Delivery of Superior Customer Value
9C. DISTINCTIVE CAPABILITIES
“Capabilities are complex bundles of skills and accumulated knowledge, exercised through organizational processes, that enable firms to coordinate activities and make use of their assets.”

Southwest Airline’s Distinctive Capabilities
Organizational Processes Southwest uses a point-to-point route system rather than the hub-and-spoke design used by many airlines. Theairline offers services to 57 cities in 29 states, with an average trip about 500 miles. The carrier’s value proposition consists of low fares and limited services (no meals). Nonetheless, major emphasis throughout the organization is placed on building a loyal customer base. Operating costs are kept low by using only Boeing 737 aircraft, minimizing the time span from landing to departure, anddeveloping strong customer loyalty. The company continues to grow by expanding its point-to-point route network. Skills and Accumulated Knowledge The airline has developed impressive skills in operating its business model at very low cost levels. Accumulated knowledge has guided management in improving the business design over time. Coordination of Activities Coordination of activities acrossbusiness functions is facilitated by the point-to-point business model. The high aircraft utilization, simplification of functions, and limited passenger services enable the airline to manage the activities very efficiently and to provide on-time point-topoint services offered on a frequent basis. Assets Southwest’s key assets are very low operating costs, loyal customer base, and high employee esprit...