External environment -Task environment

(1) Markets
 Size, growth rate and geographical distribution of the organization’s
market.
 The existing market segment
 The new emerging market segment
 The existing or future market development
 Evaluating Markets Attractiveness
 segment size
 segment growth rate
 competitive intensity
 customer satisfaction with existing product
 fit with company image
 fit with company objectives
 fit with company resources
 distribution available
 investment required
 stability
 cost to serve
 sustainable advantage available
 communication channels available
 power of buyer versus power of suppliers
(2) Industry structure
 Pure monopoly ( one seller): utilities companies
 price is high
 little advertising
 low service level
 barriers to entry exist
 Differentiated oligopoly (automotive industry)
 differentiated achieved
 few sellers
 pursuing a strategy of quality, adding features or styling
 Pure oligopoly (oil and steel industry)
 differentiated is difficult to achieve
 few sellers
 prices are set on the going rate
  competitive advantage is achieved by cost reduction
 Monopolistic competition (restaurant and beauty shops industry)
 focus on particular market segment
 many sellers
 high service level
 command a prices are premium
 Pure competition (commodity market industry)
 Competitors offer the same product
 many sellers
 profit are determine by the ability to manage costs
(3) Competitors
 The structure, bases and intensity of competition.
 The existing major competitors and any competitive advantage.
 The major strengths and relative position of each competitor.
 The objectives, strategies and the level of profitability of each
competitors.
 The market share level.

Internal analysis: EFE/IFE

1. External Factor Analysis Summary EFAS…….not imp.

 WEIG RATI WEIGHT
EXTERNAL FACTORS COMMENTS
HT NG ED SCORE

THREATS
Emergence of Due to the global
substitutes products 0.1 4 0.4 expansion
Government May interfere in
regulations 0.25 5 1.25 company’s policies

OPPORTUNITIES
Expanding globally Will increase the
companies growth and reduce
0.35 4 1.4 risk
Entering new
market segments 0.25 5 1.25 Like sport field
Capitalize on leading Will reduce risk and
position in the market 0.05 2 0.1 increases profit
TOTAL SCORES 1 4.4 ABOVE AVERAGE

i. Internal Factor Analysis Summary IFAS

WEIG RATI WEIGHT

EXTERNAL FACTORS COMMENTS
HT NG ED SCORE
WEAKNESSES
Decline in film
industry 0.1 4 0.4 Needs to be developed
Decline in theme Needs more marketing
park attendance 0.05 2 0.1 efforts
Financial 0.15 4 0.6 May lead to great losses
performance

STRENGTHS
Strong Competitive
Copyright protection 0.2 4 0.8 advantage
Products
diversification 0.2 4 0.8 More attractive
Information system 0.1 4 0.4 Strong communications
Strong brand name
and reputation 0.1 4 0.4 High Loyalty
Human resource
management 0.1 5 0.5 Successful services
TOTAL SCORES 1 4 ABOVE AVERAGE

Means for Achieving Strategies

1- Joint Venture/Partnering -
 Two or more companies form a temporary partnership or consortium for purpose of
capitalizing on some opportunity.
Why Joint Ventures Fail -
 Managers who must collaborate daily; not involved in developing the venture
 Benefits the company not the customers
 Not supported equally by both partners
 May begin to compete with one of the partners
Guidelines
 Synergies between private and publicly held
 Domestic with foreign firm, local management can reduce risk
 Complementary distinctive competencies
 Resources & risks where project is highly profitable (e.g. Alaska Pipeline)
 Two or more smaller firms competing w/larger firm
 Need to introduce new technology quickly

2- Mergers & Acquisitions

 Provide improved capacity utilization
 Better use of existing sales force
 Reduce managerial staff
 Gain economies of scale
 Smooth out seasonal trends in sales
 Gain new technology
 Access to new suppliers, distributors, customers, products, creditors

3- First Mover Advantages

 Benefits a firm may achieve by entering a new market or developing a new product or
service prior to rival firms.
Potential Advantages
 Securing access to rare resources
 Gaining new knowledge of key factors & issues
 Carving out market share
 Easy to defend position & costly for rival firms to overtake

4- Outsourcing
  Companies taking over the functional operations of other firms
Benefits
 Less expensive
 Allows firm to focus on core business
Enables firm to provide better services

Broad positioning:
VALUE DISCIPLINES

OPERATIONAL PRODUCT CUSTOMER

EXCELLENCE LEADERSHIP INTIMANCY

CORE Sharpen distribution Nurture ideas, Provide solutions and

BUSINESS systems and provide no translate them into help customers run their
PROCESSES hassle service products, and market businesses
THAT…. them skillfully

STRUCTURE Has strong, central Acts in an ad hoc, Pushes empowerment

THAT…. authority and a finite level organic, Loosely knit, and close to customer contact
of empowerment ever-changing way

MANAGEME Maintain standard Reward individuals’ Measure the cost of

NT SYSTEM operating procedures innovative capacity and providing service and of
THAT…. new product success maintaining customer
loyalty

CULTURE Acts predictably and Experiments and Is flexible and thinks

THAT… believes “one size fits all” thinks “out-of-the-box” “have it your way”

1. CHOOSING A VALUE POSITIONING

We have discussed the selection of one or more specific benefits that the brand will advertise,
without mentioning anything about how the brand will be priced. But buyers think in terms of value
for the money: what they get for what they pay. The seller must value-position the brand. We can
distinguish five value positions.

More for More

Companies can always be found that specialize in making the most upscale version of the product
and charging a high price to cover their higher costs. Called luxury goods, such products claim to be
better in quality, craftsmanship, durability, performance, or style. Examples include Mercedes
automobiles, Mont Blanc writing instruments, and Gucci apparel.

The product is not only fine in itself; it is delivering prestige to the buyer. Often the price far exceeds
the actual increment of quality.

One can find very expensive restaurants, hotels, coffees, brandies, and so on. One is surprised
occasionally at the entry of a new competitor who sets an unusually high price. Haagen-Dazs came in
as a premium ice cream brand at a price never before charged for ice cream; Starbucks came in as an
expensive coffee where coffee could always be had for much less; some Cuban cigar brands
command an unbelievably high price, in general, a company should be alert to the possibility of
introducing a “much more for much more” brand in any underdeveloped product or service
category.

Yet more-for-more brands are vulnerable: They often invite imitators who claim the same quality but
are priced lower. And luxury goods are at risk during economic downturns when buyers become
more cautious in their spending.

More for the Same

Companies have been able to attack a “more for more” brand by introducing a brand claiming
comparable quality and performance but priced much lower. The Toyota company introduced its
new Lexus automobile with “more for the same” value positioning.
Lexus advertising shows the Mercedes and Lexus side by side and the superior qualities of the Lexus;
and through evidence that Lexus dealerships were providing a better buying experience than
Mercedes dealerships. Mercedes car owners in many American cities ended tip making their next car
purchase a Lexus. Since that time the Lexus repurchase rate has been 60 percent twice that of the
average car brand repurchase rate.
The Same for Less
It seems that everyone is happy when they can buy a typical product or brand at less than the
normal price. Everything—Arrow shirts, Goodyear tires, Panasonic TV sets—seems to be available at
a lower price at some store or discount shop.
Discount stores don’t claim to have superior products, but they can offer ordinary brands at deep
savings, based on superior purchasing power.
Less for Much Less
Some people complain that some manufacturers or service providers provide more than they
require but they still have to pay the higher price. One cannot say to a hotel, “take out the TV set
and charge me less,” or tell an airline, “skip the food and charge me less.”
Therefore sellers have an opportunity to enter a market with a “less for much less” offering. There is
a hotel in Tokyo that rents not a room but a berth for substantially less than the normal hotel price.
Southwest Airlines, the most profitable U.S. air carrier, charges much less by not serving food, not
assigning seats, not using travel agents, and not transferring luggage to other carriers.

More for Less

Of course, the winning value positioning would be to offer prospects and customers more for less.”
This is the attraction of highly successful category killer stores. Sportmart offers the largest selection
of sports equipment and sports clothing for the lowest prices. Mass merchandisers make a similar
claim: walking into a Wal-Mart store, one meets a friendly greeter, sees a whole array of attractively
laid-out, well-known branded goods, finds everyday low prices, and generous return policies, and
leaves thinking of Wal-Mart as a place where he or she can get more for less.

Military strategies
Principles of defensive marketing warfare
1. Only the market leader should consider playing defense.
 2. The best defensive strategy is the courage to attack.
3. Strong competitive moves should always be blocked.

Defensive strategies: For market leader

A) Position defense: of the current market (weakest way)
B) Mobile defense: market broadening, diversification into unrelated industries.
C) Flanking defense: Don't ignore secondary markets
D) Contraction defense: withdraw from segments &/or geographical regions which are most
vulnerable
E) Pre-emptive defense: Striking first by first gathering information about the competitors and
capitalizing on competitive advantage
F) Counter offensive attack: response after the attack by:
 Attack head on
 Attacker's flank
 Pincer movement
Principles of offensive marketing warfare
 The main consideration is the strength of the leader’s position
 Find weakness in the leader’s strength and attack at that point.
 Launch the attack on as narrow a front as possible.
Offensive strategies: For market challenger
G) Frontal attacks: matching competitors in everything (should have superior resources &
willing to persevere.
H) Flank attack: attack part of the market where the competitor is weak
I) Bypass attack: offer new type of product that makes the competitors product unnecessary
by diversification into unrelated product and new geographical market
J) Encirclement: Encircles the competitor's position in terms of products or markets or both.
K) Guerrilla warfare: "Hit & Run", small intermittent assaults on different market segments
(think of exit strategies)
Principles of flanking marketing warfare
A good flanking move must be made into an uncontested area.
1. Tactical surprise ought to be an important element of the plan.
2. The pursuit is as critical as the attack itself.
Principles of guerrilla marketing warfare
1. Find a segment of the market small enough to defend.
2. No matter how successful you become, never act like the leader.
3. Be prepared to buyout at a moment’s notice.

Marketing factors:
 1. Relative market share
2. Reputation
3. Previous performance
4. Competitive stance
5. Customer base
6. Customer loyalty
7. Breadth of product range
8. Depth of product range
9. Product quality
10. Program of product modification
11. New product program
12. Distribution Costs
13. Dealer network
14. Dealer loyalty
15. Geographical coverage
16. Sales force
17. After sales service
18. Manufacturing costs
19. Manufacturing flexibility
20. Raw material advantage
21. Pricing
22. Advertising
23. Unique selling propositions
Structure of competition .24
Human Resource Management

Human resource management is one of the most important key success factors in organization,
which is not totally implemented in Egypt, and its improvement will greatly improve the organization
performance

1. Human Resource Objectives

The human resource objective reflects the intention of the senior management (strategy) with a
balance to the related topics such as HR functions, society, governing rules, etc.
There are four major objectives for the Human resource management;
1. Organizational objectives: to achieve the required organization effectiveness and objectives
and ensure that the organization always has people with the right abilities available to do the
right work
2. Functional Objectives: maintain the department’s contribution at a level appropriate to the
org. needs
3. Societal Objective : respond ethically and socially to the challenges of the environment while
minimizing the negative impact of such demands on the organizations
4. Personal objectives: to assist retain and motivate the employees for achieving their personal
goals and guide them to better achievement (most important )

2. Human Resource Policies and Programs

a. Preparation and selection: Review of the employees' job description, job specification and job
performance standard to match the change of the organization.

b. Succession Planning: the preparation of the company succession plan will enable the
organization to stand any future challenges.

c. Career Path and development: the preparation of the career path for the employees will help
the stability and minimize the turnover of the employees.

d. Recruitment: designing a good recruitment process (Selection, interviews) with a high level of
orientation to ensure the compatibility of the new recruited employees with the existing culture to
achieve organizational objectives.

e. Training and development: on-the- job” training, Off-the-Job training and Provide career
planning assistance for employees.

f. Incentive system will ensure the motivation of the employees to better performance (linking
incentive to production)

g. Compensation Policies and protection: What employees get in exchange for their contribution
to the organization  maintains, retain productive workforce, achieve the org. objectives.

h. Managing workforce diversity ( if the organization is going internationally)

i. Enhance employee participation: in implementing our strategy, all employees from different
organizational levels must make a meaningful contribution in decision-making .this will increase
employee's involvement and enhance their working life balance.

j. Enhance employee organizational commitment: by increasing job involvement, which results

in lower levels of absenteeism and turnover.

k. Implementing employee recognition programs: starting with personal attention and ending
with appreciation for a job well done.

l. Develop effective staffing plans supporting the organizational strategies by allowing to fill job
openings proactively (in terms of number and the quality of the workforce for the short and long
term) VIP in case of international operations.( if the company is multinational)
Corporate structure

SIMPLE STRUCTURE:
 Owner-manager makes decisions.
 Little specialization of tasks.
 Few rules, little formalization.
ADVANTAGES:
 Provides high flexibility
 Rapid product introduction
 Few coordination problems

FUNCTIONAL STRUCTURE:
The company rather being lead by an entrepreneur, he is replaced by as team of managers who
have functional specializations. The entrepreneur must learn now to delegate his responsibilities;
otherwise, the new structure will yield no benefit

ADVANTAGES
 Centralized control of operations
 Promotes in-depth functional expertise
 Enhances operating efficiency where tasks are routine

DISADVANTAGES
 Functional coordination problems
 Inter-functional rivalry
 Overspecialization and narrow viewpoints
 Hinders development of cross-functional experience
 Slower to respond in turbulent environments
 DIVISIONAL STRUCTURE:
It occurs especially when the organization is managing diverse product line or when the organization
is expanding to cover wider geographical areas

ADVANTAGES:
 Decentralized decision making
 Each business is organized around products
 Puts profit/loss accountability on manager
 Facilitates rapid response to environmental changes
 Allows efficient management of a large number of units

DISADVANTAGES
 May lead to costly duplication of functions
 Inter-divisional rivalry
 Corporate managers may lose in-depth understanding

MATRIX STRUCTURE
The matrix structure (some times called the matrix organization) it combines the functional and
divisional structure. It is designed to gain the advantage and minimize the disadvantages of the
functional and divisional structures.
The matrix is formed by using permanent cross functional teams to integrate functional expertise in
support of a clear divisional focus on project, product or program.
 The matrix structure in the multinational organizations offers a flexibility to deal with the regional
differences as well as the multi products, programs or regional needs.
The matrix structure is the common solution for the organizations that pursues the growth
strategies in a dynamic and complex environment
 Functional & product form are combined simultaneously at the same level.
 Employee have 2 superior, functional superior & horizontal product manager
WHEN TO USE?
 Scarce resources
 Ideas need to be cross fertilized across projects
 External environment is very complex and changeable

3. Distinct phase exist in the DEVELOPMENT OF matrix structure

1. Temporary cross functional task forces: Project manager is in charge as the key
horizontal link
2. Product or brand management: The functional is still the primary organizational structure,
product manager act as integrator of semi permanent product or brand.
3. Mature matrix: A true dual authority structure, functional & product structure are
permanent

NETWORK STRUCTURE
 many activities are outsource
 series of independent firms or business units that are linked together by computers in an IS
 Used when the environment is unstable
Nike, Reebok, Benetton use the network structure on there operation functions by subcontracting
manufacturing to other companies in low cost location around the world.

ADVANTAGES:
 Rapid response time
  Firm’s emphasize their own core competencies
 Very flexible
 Reduces capital intensity
McDonald’s 
McDonald's® Brand vision is "To be the best quick service 
restaurant experience".
McDonald's® Brand mission is “to be our customer's first 
choice, when it comes to, top quality products, outstanding
service / cleanness and great value for money
Burger King 
Vision 
“Offering reasonably priced quality food, served quickly, in attractive, 
clean surroundings.”
It is short and clear & easy to understand but it is not challenging or 
future oriented.

Mission 
“Our commitment to premium ingredients, signature recipes, and 
family-friendly dining experiences is what has defined our brand for
more than 50 successful years.”
Pizza Hut’s 
Vision 
To make the people know that for all the eating items they desire to eat 
can be made available in minimum time without our effort excluding
money.
It is short, challenging but not future oriented or clear and easy to 
understand because no notification about Pizza just eating items
Mission 
“To be the best pizza for every pizza occasion”  “Alone we are 
delicious, Together we are YUM!” We are P.E.A.R.L.S - PASSION for
excellence in Doing everything - EXECUTE with positive energy and need
ACCOUNTABLE for growth in customer satisfaction , RECOGNIZE the
achievement of others and have fun doing it , LISTEN and more
importantly, respond to the voice of the customer.

