What are the basic concepts of marketing? - Chapter 1

What does strategy consist of?

All markets are dynamic. Change occurs everywhere, and change affects strategy. A winning strategy today may not prevail tomorrow, it might not even be relevant tomorrow. Markets also become risky, complex and cluttered. These convoluted markets make strategy creation and implementation far more challenging.

Strategists need new and refined perspectives, tools and concepts. In particular, they need to develop competencies around five management tasks:

• Strategic analysis. The need for information about customers, competitors and trends affecting the market is now higher than ever. The information needs to be on-line, because a timely detection of threats, opportunities, strategic problems or emerging weaknesses can be crucial in getting the right response.

• Innovation. Numerous empirical studies have shown that the ability to innovate is a key to successfully win in dynamic market. The organizational challenge consists of creating a context that supports innovation. Next to organizational challenge, there is also a brand challenge, a strategic challenge and an execution challenge.

• Multiple business units. The rare firm does not operate multiple business units defined by channels and countries in addition to product categories and subcategories. Decentralization is a century-old organizational form that provides for accountability, a deep understanding of the product or service, being close to the customer, and fast response: all of which are good things.

• Creating sustainable competitive advantages (SCAs). Creating strategic advantages that are truly sustainable in the context of dynamic markets and dispersed business units is challenging.

• Developing growth platforms. Growth is imperative for the vitality and health of any organization. Growth can come from revitalizing the core business, making growth platforms, as well as creating new business platforms.

A business generally is an organizational unit that has (or should have) a defined strategy and a manager with sales and profit responsibility. They can be defined by a variety of dimensions, including: product line, country, channels, or segments. An organization will thus have many business units that relate to each other horizontally and vertically. There are four dimensions that define a business strategy: the product market investment strategy, the consumer value proposition, the assets and competencies and the functional strategies and programmes.

The product market