Winning Market Leadership: Strategic Market Planning for Technology-Driven Businesses / Edition 1

Winning Market Leadership: Strategic Market Planning for Technology-Driven Businesses / Edition 1

by Adrian Ryans, Roger More, Donald Barclay, Terry Deutscher

ISBN-10: 0471644307

ISBN-13: 9780471644309

Pub. Date: 02/11/2000

Publisher: Wiley

Strategic market planning in technology-intensive businesses is more complex and is less manageable than in most other organizations. The technology-driven business environment is intensely competitive, complex, and dynamic, and planning needs to be done quickly and often.

Winning Market Leadership offers a refreshing new approach to strategic market

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Strategic market planning in technology-intensive businesses is more complex and is less manageable than in most other organizations. The technology-driven business environment is intensely competitive, complex, and dynamic, and planning needs to be done quickly and often.

Winning Market Leadership offers a refreshing new approach to strategic market planning in these very demanding technology-intensive markets. It provides a systematic and highly integrated process for evaluating market opportunities and for developing strategies to lead in chosen markets. Its proven, highly practical approach to strategic market planning has allowed leading companies worldwide to: plan faster, focus on cash-flow and profitability, create "living plans" that reflect changing market conditions and competitive dynamics, involve cross-functional teams effectively, and drive to "yes/no" decisions. The book resulted from project-based executive programs developed by the authors for corporate clients such as IBM, Nortel Networks, National Semiconductor, and General Electric. This strategic market planning process has been refined and tested with over a thousand managers and executives in North America, Europe, and Asia. Winning Market Leadership:

  • Is targeted at managers in technology-intensive businesses such as computers, telecommunications, software, biotechnology, semiconductors, instruments, pharmaceuticals, and advanced materials.
  • Focuses on the key issues and tough choices faced by executives in very demanding technology-intensive markets.
  • Outlines a clear 10-step process for building winning market plans, including: identifying opportunities, understanding the competition, managing critical relationships, understanding the profit dynamic, and more.
  • Features examples from high-tech companies such as Intel, Compaq, Hewlett-Packard, Glaxo Wellcome, and General Electric.
  • Includes "Key Questions for Executives and Managers" at the end of each chapter that help eliminate "blind spots" in the planning process.

Winning Market Leadership is relevant to all executives and managers who play a significant role in developing cross-functional strategic market plans for their business: general managers; marketing managers; strategic planners; managers in business development, engineering, and R&D; and project team leaders.

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Table of Contents



CHAPTER 1: Introduction 1

The Environment in Which Technology-Intensive Businesses Operate 3

Complex and Dynamic Market Chains 3

Network Effects 5

Speed of Change is High 6

Blurred Market Boundaries 7

Markets and Competition Are Global 8

Strategic Market Planning in a Technology-Intensive Business 10

Who Should Be Involved in the Process? 10

Planning Builds Mental Models 10

Planning Process Must Be Iterative and Continuous 11

Planning Process Must Be Integrative 12

Winning Market Leadership: An Integrated Approach 12

Choose the Arena 13

Identify Potentially Attractive Opportunities 14

Understand the Market 16

Assess Resources and Competencies 16

Understand the Competitive Challenge 17

Make Tough Strategic Choices 19

Plan Key Relationships 21

Complete the Winning Strategy 22

Understand the Profit Dynamic 23

Implement the Chosen Strategy 23

What Is Different About This Book? 24

Integrated Planning Process 24

Process Applies to New or Existing Business Opportunities 24

Process Is Designed for Managers 25

CHAPTER 2: Choose the Arena 27

Introduction 27

Crucial First Step in the Planning Process 29

Strategic Business Unit (SBU) 29

Existing Market Opportunities 30

New Market Opportunities 31

Define the Arena 34

Customers Served 34

Applications/Functionality Provided 36

Technologies/Competencies Used 36

Value-Adding Role 37

Strategic Drivers and Strategic Paths 37

Driving Force 37

Strategic Path 38

Next Step: Identify the Potentially Attractive Opportunities in the Business Arena 40

CHAPTER 3: Identify Attractive Opportunities 43

Introduction 43

Identifying Potential Market Opportunities 43

Benefits of Thinking About Market Segments Early in the Process 46

Segmenting a Market 46

Possible Segmentation Bases 47

Segmentation Process 51

Targeting Issues 52

Market Segment Attractiveness 54

Determining the Attractiveness of a Market Segment 55

Understanding Choices Among Market Chain Opportunities 65

Market-Driving Opportunities 66

Exploiting Environmental Change 67

Sources of Discontinuities or Breakpoints 68

Next Step: Developing a Deeper Understanding of the Market Opportunities 70

CHAPTER 4: Understand the Market 71

Introduction 71

Adoption of New Products 72

Types of Innovations 73

Technology Adoption Life Cycle 74

Adopter Categories 75

Driving the Adoption Process 77

Achieving Market Leadership 82

Whole Product or Complete Solution 83

Understanding Buyer Choice/Rejection Behavior 84

Decision-Making Unit 85

Choice Criteria 86

The Choice/Rejection Process 88

Market Chains 93

Choices Among Market Chains 93

Market Chain Dynamics 96

Market Chains as a Series of Choice/Rejection Processes 98

Next Step: Assessing Your Resources and Competencies 99

CHAPTER 5: Assess Resources and Competencies 103

Introduction 103

The Process of Assessing Resource/Competency Fit 104

Core Competencies 105

What Is a Core Competency? 105

What Is a Constraining Incompetency? 108

Identifying Core Competencies 109

Identifying Your Organization’s Core Competencies 110

Managing Core Competencies 111

Should You “Make” or “Buy” Strategic Activities Associated with Core Competencies? 112

Customer Value and Profit Creation Model 113

Mapping Competencies and Customer Requirements 114

Assessing a Market Opportunity: Fit With Core Competencies 115

Next Step: Understanding the Competitive Challenge 120

CHAPTER 6: Understand the Competitive Challenge 123

Introduction 123

Process of Competitive Analysis 125

Issues in the Competitive Analysis Process 126

Identification of Competitors 126

How Do They Compete? 128

How Are They Doing Now? How Will They Do in the Future? 134

Analysis of Strategy Driving Forces 137

Pulling the Competitive Information Together 141

Actions-Consequences-Evidence (ACE) Framework 141

Next Step: Making the Tough Choices 142

CHAPTER 7: Make Tough Strategic Choices 145

Introduction 145

Strategic Issues 147

What Is a Strategic Issue? 147

How Many Strategic Issues? 148

Types of Strategic Issues 148

Developing a Winning Strategy for an Opportunity 149

Cost Leadership 149

Differentiation 151

Strategic Breakpoint 153

Risks of Adopting a Differentiation Strategy 155

Sustaining the Competitive Advantage 157

Convergence of Cost Leadership and Differentiation 158

Selecting the Portfolio of Opportunities 159

Balance Market Attractiveness and Ability to Win 159

Displaying the Portfolio of Opportunities 160

Making Clear Strategic Choices 163

Next Step: Managing Critical Relationships 165

CHAPTER 8: Manage Critical Relationships 167

Introduction 167

Why Are Relationships Critical? 168

The Market Web 170

A Generic Market Web and an Example 171

A Managerial Perspective on Market Webs 174

Market Webs as Value-Creating Systems 174

Evolution of the Market Web 175

Managing Critical Relationships 176

Market Chain Strands 177

Customer and Supplier Relationships 177

Off-Market Chain Strands 178

Formal and Informal 178

Collaborative Product Development Alliances 179

Co-Marketing Alliances 179

Horizontal Selling Alliances 180

Knowledge and Influence Strands 181

Knowledge Strands: Learning From Others in the Web 181

Influence Strands: Affecting Choice/Rejection Processes 182

Value-Added Partnerships: A Key Relationship Form 183

Partnering Success Factors 184

Managing “Sticky” Strands in the Web 187

Relationships and the Market Opportunity 189

The Opportunity 189

The Winning Strategy 190

Next Step: Completing the Winning Strategy 190

CHAPTER 9: Complete the Winning Strategy 193

Introduction 193

A Framework 193

Define a Clear Competitive Position in the Opportunity 195

Complete the Total Product/Service Solution 196

Plan to Gain Market Chain Commitment 198

Basic Issues 199

Work Through Pricing Challenges 200

The Impact of Context 201

Pricing Objectives 202

Other Challenges 206

Plan to Influence Customers and End Users 209

Customer Interface Strategies 209

Advertising and Promotion 212

Apply Strategic Thinking to Emerging Challenges 213

Evaluate the Current Strategy 214

Are You Going After an Attractive Market Opportunity? 215

Can You Win with Your Proposed Strategy? 216

If You Win, Will It be Worth It? 218

Other Considerations 219

Detail and Use the Plan 220

Next Step: Understanding the Profit Dynamic 221

CHAPTER 10: Understand the Profit Dynamic 223

Introduction 223

The Profit Dynamic 224

The Drivers of Positive Cash Flow: Total Margin Generated 225

Negative Cash Flow Drivers: Fixed Costs and Investments 226

Cash Flow Profiles 227

The Profit Dynamic 228

An Alternative Form of the Profit Dynamic 230

Locating Key Sensitivities in the Profit Dynamic 231

New Product Opportunities and the Profit Dynamic 234

The Critical Importance of Adoption Rate 235

Applying the Profit Dynamic to Individual Customers 238

Product-Service Integration and the Profit Dynamic 239

Integrated Product-Service Opportunities 239

Management of the Integrated Product-Service Profit Dynamic 241

Managing the Profit Dynamic in Market Chains: Creating Strategic Leverage 242

Identifying Points of Strategic Leverage 242

Strategic Leverage and Adoption Rates 244

Next Step: Implementing the Strategy 244

Chapter 11: Implement the Winning Strategy 247

Introduction 247

A Process for Managing Implementation 252

The Case for Change 254

The Need for Strategic Change 254

Types of Change 256

Specification of the Implementation Plan 259

The Questions 260

The Challenge 263

Communicating Implementation 264

Monitoring Implementation 267

Conclusion 268

CHAPTER 12: The System that Makes the Process Happen 271

Introduction 271

Planning Systems 272

Need for Planning Systems 274

Design of a Planning System 276

Factors Influencing the Design of a Planning System 276

Major Planning System Design Decisions 278

No One Right Planning System 282

Balanced Interaction 284

Planning System in a Large, Sophisticated Company 285

Overview of the Planning System 286

Cycle One: Develop Options for SBU 286

Cycle Two: Detailed Planning for Selected Option 288

Cycle Three: Develop Budgets and Detailed One-Year Operating Plan 289

Implementation and Monitoring 289

An Effective Strategic Market Planning Process 290

Is Both Integrated and Iterative 290

Is Question Driven 291

Combines Hard Data with Soft Intuitive Judgment 291

Focuses on Implementation 291

Recognizes That the Process Is as Important as the Plan 292

Encourages Managers to Say No 292

Challenges Industry and Company Norms 294

Key Success Factors in an Effective Planning System 294

Effective Teams 295

Supportive Corporate Culture 297

Integration with Other Key Processes 298

Key Support Systems in Place 299

Conclusion 300

Index 303

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