Mais conteúdo relacionado Semelhante a Product Management (20) Mais de Teaching Excellence (20) Product Management2. Learning Objectives
I. Define product management.
II. Discuss the constituents of a product.
i. Examine the significance product elements.
III. Evaluate the role of product packaging in consumers’ buying decisions.
IV. Evaluate four product-growth decisions.
V. Use techniques for product management.
© 2014 Berlin Asong. All rights reserved. 2
3. Learning Objectives
I. Define product management.
II. Discuss the constituents of a product.
i. Examine the significance product elements.
III. Evaluate the role of product packaging in consumers’ buying decisions.
IV. Evaluate four product-growth decisions.
V. Use techniques for product management.
© 2014 Berlin Asong. All rights reserved. 3
4. Product
management
© 2014 Berlin Asong. All rights reserved. 4
5. It’s theprocess ofsatisfying consumers’
needs and fosteringa firm’s performance through
effective product-development
and product-marketing .
© 2014 Berlin Asong. All rights reserved. 5
6. It’s the process of managing
a product successfully throughout
the various stages of its lifecycle.
© 2014 Berlin Asong. All rights reserved. 6
8. Learning Objectives
I. Define product management.
II. Discuss the constituents of a product.
i. Examine the significance product elements.
III. Evaluate the role of product packaging in consumers’ buying decisions.
IV. Evaluate four product-growth decisions.
V. Use techniques for product management.
© 2014 Berlin Asong. All rights reserved. 8
9. What is a product
comprised of?
© 2014 Berlin Asong. All rights reserved. 9
12. Organisation
Actual Product
After Sales
Augmented Product Service
Price
Packaging
Product
Brand Finance Advice Values
Design
Features
Delivery Warranties
Basic Product
Augmented product Corporate
Image
© 2014 Berlin Asong. All rights reserved. 12
13. Product anatomy is a
breakdown of a product
into constituent units.
© 2014 Berlin Asong. All rights reserved. 13
14. Learning Objectives
I. Define product management.
II. Discuss the constituents of a product.
i. Examine the significance product elements.
III. Evaluate the role of product packaging in consumers’ buying decisions.
IV. Evaluate four product-growth decisions.
V. Use techniques for product management.
© 2014 Berlin Asong. All rights reserved. 14
15. What are the
implications of the
product anatomy to
product management?
© 2014 Berlin Asong. All rights reserved. 15
16. 1
A product is more than its
physical form or content.
© 2014 Berlin Asong. All rights reserved. 16
17. narrow
A reason for product failures is…managers have
interpretation of product.
© 2014 Berlin Asong. All rights reserved. 17
18. 2
It is the interaction
of product elements that
provide value to customers.
© 2014 Berlin Asong. All rights reserved. 18
19. Failure to integrate the
various product elements
successfully is a reason for product failure.
© 2014 Berlin Asong. All rights reserved. 19
20. 3
Managing a product
successfully demands a mix
of knowledge…
© 2014 Berlin Asong. All rights reserved. 20
21. Product management
Ecology
Engineering
Gastronomy
Economics
Anthropology
Human resource management
Informationtechnology
Operations management
Graphics design
Finance
Etc.
© 2014 Berlin Asong. All rights reserved. 21
22. Learning Objectives
I. Define product management.
II. Discuss the constituents of a product.
i. Examine the significance product elements.
III. Evaluate the role of product packaging in consumers’ buying decisions.
IV. Evaluate four product-growth decisions.
V. Use techniques for product management.
© 2014 Berlin Asong. All rights reserved. 22
23. PRODUCT
P CK GING
© 2014 Berlin Asong. All rights reserved. 23
24. The outward
tangible elements
of a product.
© 2014 Berlin Asong. All rights reserved. 24
25. Colours
Size
Shape
Weight
Pictures
Labels
Materials
© 2014 Berlin Asong. All rights reserved. 25
26. Is it worth spending
millions of pounds on
product packaging?
© 2014 Berlin Asong. All rights reserved. 26
28. 1
Portability
Convenient to carry, transport & consume.
© 2014 Berlin Asong. All rights reserved. 28
29. 2
Preservation
High-tech packages
are extending the shelf-
life of products.
© 2014 Berlin Asong. All rights reserved. 29
30. 3
It conveys
critical product
information to
buyers.
© 2014 Berlin Asong. All rights reserved. 30
31. Lack of
information to
make informed
and educated
choices, is
perceived as
risky by buyers.
© 2014 Berlin Asong. All rights reserved. 31
32. Perceived Risk
Psychological Risk
Functional Risk
Financial Risk
Physical Risk
Social Risk
Time
Source: adapted from Kotler (2012)
© 2014 Berlin Asong. All rights reserved. 32
33. Putting a message on packaging
costs significantly less than newspaper,
TV, or Internet advertising.
Tetra Pak (2012), “Tetra Pak Magazine No 96 - Package Communication”. Retrieved Feb. 27, 2012,
from www.tetrapak.com/Document%20Bank/TetraPak_Magazine/TP_Magazine%20Nr98_EN.pdf
© 2014 Berlin Asong. All rights reserved. 33
34. 4
Visual elements
of actual product.
© 2014 Berlin Asong. All rights reserved. 34
35. Glossy packaging
gives a luxurious or
premium impression
of the product.
© 2014 Berlin Asong. All rights reserved. 35
36. Visual differentiation
frequently drives purchase
decisions.
Tetra Pak (2012), “There’s No Second Chance to Make a First Impression”. Retrieved Feb. 27, 2012,
from http://www.tetrapak.com/about_tetra_pak/cases/Pages/First_Impression.aspx
© 2014 Berlin Asong. All rights reserved. 36
38. Studies show impulse
shoppers respond highly
to packaging visuals.
© 2014 Berlin Asong. All rights reserved. 38
39. of all purchasing decisions
are made inside the store,
you realise how important
is product appearance.
Tetra Pak (2012), “Tetra Pak Magazine No 98 - Consumer Trends”. Retrieved Feb. 27, 2012, from
www.tetrapak.com/Document%20Bank/TetraPak_Magazine/TP_magazine96_EN.pdf
© 2014 Berlin Asong. All rights reserved. 39
40. 5
Safety
© 2014 Berlin Asong. All rights reserved. 40
41. Consumers want to be confident that
the [package] is safe and protects the
contents, but they also want to know
if it is environmentally sustainable.
Tetra Pak (2012), “Tetra Pak Magazine No 98 - Consumer Trends”. Retrieved Feb. 27, 2012, from
www.tetrapak.com/Document%20Bank/TetraPak_Magazine/TP_Magazine%20Nr98_EN.pdf
© 2014 Berlin Asong. All rights reserved. 41
42. 6
Packaging serves to
differentiate a product from
rival products.
© 2014 Berlin Asong. All rights reserved. 42
43. Classic coke’s
curvy, “stripes”,
etc. are instantly
recognisable by
fans, worldwide.
© 2014 Berlin Asong. All rights reserved. 43
44. Packaging gives
personality to classic
coke, & identifies its
maker, Coca-Cola.
© 2014 Berlin Asong. All rights reserved. 44
45. 7
It could
serve as a sales
promotional tool.
© 2014 Berlin Asong. All rights reserved. 45
47. 8
To flaunt
a firm’s green
credentials.
© 2014 Berlin Asong. All rights reserved. 47
49. Anatomy of Product Packaging
Tetra Pak (2012), “Tetra Pak Magazine No 96 - Package Communication”. Retrieved Feb. 27, 2012,
from www.tetrapak.com/Document%20Bank/TetraPak_Magazine/TP_Magazine%20Nr98_EN.pdf
© 2014 Berlin Asong. All rights reserved. 49
51. 1
It increases the
cost &, consequently
price of product.
© 2014 Berlin Asong. All rights reserved. 51
52. 2
Deceitful
packaging
© 2014 Berlin Asong. All rights reserved. 52
54. 3
Using excess
packaging.
© 2014 Berlin Asong. All rights reserved. 54
55. Learning Objectives
I. Define product management.
II. Discuss the constituents of a product.
i. Examine the significance product elements.
III. Evaluate the role of product packaging in consumers’ buying decisions.
IV. Evaluate four product-growth decisions.
V. Use techniques for product management.
© 2014 Berlin Asong. All rights reserved. 55
57. The main goal of
product management is
to grow product sales
profitably.
© 2014 Berlin Asong. All rights reserved. 57
58. can this be achieved
© 2014 Berlin Asong. All rights reserved. 58
59. Ansoff-Growth Matrix
Current
Market New
Market Market
Current Penetration Extension
Product
Product
New Diversification
Development
© 2014 Berlin Asong. All rights reserved. 59
60. Current
Market New
Market Market
Current Penetration Extension
Product
Product
New Diversification
Development
© 2014 Berlin Asong. All rights reserved. 60
61. Growth within a firm’s
existing territorial or
“segmentorial” market.
(demographic, psychographic, and behavioural consumer segments.)
© 2014 Berlin Asong. All rights reserved. 61
62. Desirable State
Gap to close
Market Share
Current State
Time
The underlying goal of
"market penetration" is to increase
sales and market share.
© 2014 Berlin Asong. All rights reserved. 62
63. 30 minutes
Unsatisfied with its sales and
profit performance for 2012, Morrisons
supermarket is embarking on market
penetration. In what ways can the company
penetrate the UK grocery market?
© 2014 Berlin Asong. All rights reserved. 63
64. 1
Provide valued-products.
© 2014 Berlin Asong. All rights reserved. 64
65. 2
Picture source: wikimedia.org
Expand retail presence (no. of stores).
© 2014 Berlin Asong. All rights reserved. 65
66. 3
Provide an
online-to-home
delivery service.
© 2014 Berlin Asong. All rights reserved. 66
67. 4
Price-promotion
© 2014 Berlin Asong. All rights reserved. 67
68. 5
Build brand equity.
© 2014 Berlin Asong. All rights reserved. 68
69. 6
Provide superior
customer service
experiences .
© 2014 Berlin Asong. All rights reserved. 69
70. 30 minutes
What are the
chances of success?
© 2014 Berlin Asong. All rights reserved. 70
71. Growth by market
penetration thrives under
certain conditions like…
© 2014 Berlin Asong. All rights reserved. 71
72. 1
Firm’s operating market
is underpenetrated.
© 2014 Berlin Asong. All rights reserved. 72
73. 2
If the firm can reduce the
market share of rivals without
destroying its profit margins.
© 2014 Berlin Asong. All rights reserved. 73
74. Current
Market New
Market Market
Current Penetration Extension
Product
Product
New Diversification
Development
© 2014 Berlin Asong. All rights reserved. 74
75. The firm targets a new
territorial or “segmentorial”
market with an existing offering.
© 2014 Berlin Asong. All rights reserved. 75
76. Geographic market extension
An existing
product or
service is made
available in new
markets.
© 2014 Berlin Asong. All rights reserved. 76
78. Usually the
offering is adapted to fit
buyer’s preferences.
© 2014 Berlin Asong. All rights reserved. 78
81. Market extension
can be pursued by
acquiring other firms.
© 2014 Berlin Asong. All rights reserved. 81
82. Such as ASDA’s 2011 acquisition of NETTO
© 2014 Berlin Asong. All rights reserved. 82
85. Age-based market extension
An existing product or
service is made available to a
consumer segment of a
certain age group.
© 2014 Berlin Asong. All rights reserved. 85
87. Income-based market extension
An existing product or
service is made available to a
consumer segment of a
certain income threshold.
© 2014 Berlin Asong. All rights reserved. 87
89. What are the push
factors for market extension,
and probability for success?
© 2014 Berlin Asong. All rights reserved. 89
90. 1
Firm’s operating
market is saturated.
© 2014 Berlin Asong. All rights reserved. 90
91. 2
There’s a strong fit
between the existing offering
and the extended market.
© 2014 Berlin Asong. All rights reserved. 91
92. 3
If a firm’s existing
capabilities can adequately
serve the new market.
© 2014 Berlin Asong. All rights reserved. 92
93. What are the
challenges of growth
by market extension?
© 2014 Berlin Asong. All rights reserved. 93
94. …and how
those challenges
can be overcome?
© 2014 Berlin Asong. All rights reserved. 94
95. Current
Market New
Market Market
Current Penetration Extension
Product
Product
New Diversification
Development
© 2014 Berlin Asong. All rights reserved. 95
96. The firm grows within
its existing territorial or
“segmentorial” market by providing
new products or services.
© 2014 Berlin Asong. All rights reserved. 96
97. Samsung’s 2012 revenue
growth was strong thanks to a
string of new mobile devices
targeting low-end, mid and
high-end mobile users.
© 2014 Berlin Asong. All rights reserved. 97
100. Some of Coca-Cola’s
products are acquired
businesses.
© 2014 Berlin Asong. All rights reserved. 100
101. 30 minutes
The justification for
growth through new
product development.
© 2014 Berlin Asong. All rights reserved. 101
102. 1
To ignite revenue growth
especially if the firm operates
in mature industries.
© 2014 Berlin Asong. All rights reserved. 102
104. 2
…to appeal to
various buyers’ needs
in an existing market.
© 2014 Berlin Asong. All rights reserved. 104
105. 3
Innovate or die!
If not you will be outran by the competition.
© 2014 Berlin Asong. All rights reserved. 105
106. Current
Market New
Market Market
Current Penetration Extension
Product
Product
New Diversification
Development
© 2014 Berlin Asong. All rights reserved. 106
107. The firm moves
into new product
categories or industries.
© 2014 Berlin Asong. All rights reserved. 107
108. Not too long ago,
the iPod was a big
revenue generator
for Apple, but not
any more.
© 2014 Berlin Asong. All rights reserved. 108
109. In 2007, Apple
entered the
mobile phone
industry.
© 2014 Berlin Asong. All rights reserved. 109
110. The iPhone accounts
for 44% of Apple’s
revenue in 2011.
© 2014 Berlin Asong. All rights reserved. 110
112. Related Diversification
The firm grows by expanding
into product or service categories that
are related to its core business.
© 2014 Berlin Asong. All rights reserved. 112
114. A high degree of
relationships exit among
Apple’s product categories.
© 2014 Berlin Asong. All rights reserved. 114
115. 1
A high degree of
relationships exit among
HP’s product categories.
2
3
4
5
© 2014 Berlin Asong. All rights reserved. 115
116. 2010: HP acquired Palm to enter the
fast growing tablet computing space.
© 2014 Berlin Asong. All rights reserved. 116
118. Related Diversification
The firm grows by expanding
into product or service categories that
are unrelated to its core business.
© 2014 Berlin Asong. All rights reserved. 118
119. 1987; the merger
between Moet Hennessy
and Louis Vuitton.
© 2014 Berlin Asong. All rights reserved. 119
122. In August2011, Google acquired Motorola
Mobility. Is the acquisition a related
or unrelated diversification?
© 2014 Berlin Asong. All rights reserved. 122
123. 30 minutes
Virgin Group has diversified
into related and unrelated
industries. Does diversification
benefit the company? How?
© 2014 Berlin Asong. All rights reserved. 123
124. 1
It enables the company to
pursue growth in multiple territorial,
“segmentorial” & product markets.
(demographic, psychographic, and behavioural consumer segments.)
© 2014 Berlin Asong. All rights reserved. 124
125. 2
By moving resources &
core competencies into new
industries, the firm can use its
capabilities efficiently.
© 2014 Berlin Asong. All rights reserved. 125
126. The efficiency of a factory is
improved by producing two or
more product categories compared if
multiple production platforms are used.
© 2014 Berlin Asong. All rights reserved. 126
127. synergy
When two firms combine; they can
share & use the same capabilities.
Thereby, reducing costs.
© 2014 Berlin Asong. All rights reserved. 127
128. Before the 2008 global financial crisis,
GE finance accounted for 50% of GE’s profit & funded
the operations of GE’s businesses like Energy.
© 2014 Berlin Asong. All rights reserved. 128
131. Possible areas
of synergistic gains.
Administration
HR Technology Marketing Distribution R&D Manufacturing
© 2014 Berlin Asong. All rights reserved. 131
132. 3
Risks Spreading
Are single-product firms more
at risk than multi-product firms?
© 2014 Berlin Asong. All rights reserved. 132
133. 4
Shareholders’ wealth
may improve as a direct
result of reinvesting
cash in new businesses.
© 2014 Berlin Asong. All rights reserved. 133
134. 20 minutes
Growth through Diversification
Challenges
© 2014 Berlin Asong. All rights reserved. 134
135. 1
It requires a strong
management system to keep
tap of multiple businesses.
© 2014 Berlin Asong. All rights reserved. 135
136. 2
The risk of cross
contamination is
always there.
© 2014 Berlin Asong. All rights reserved. 136
137. News of the World, a UK-based
newspaper outfit of News Corp.,
was shutdown amid a phone
hacking scandal in 2011.
© 2014 Berlin Asong. All rights reserved. 137
138. News Corp pulls out of BSkyB bid
Source: The Guardian (2011). Retrieved from www.guardian.co.uk/media/2011/jul/13/news-corp-pulls-out-of-bskyb-bid
© 2014 Berlin Asong. All rights reserved. 138
139. News Corp pulls out of BSkyB bid
Source: The Guardian (2011). Retrieved from www.guardian.co.uk/media/2011/jul/13/news-corp-pulls-out-of-bskyb-bid
© 2014 Berlin Asong. All rights reserved. 139
140. 3
Diversification has
in many cases devalued
shareholders’ wealth.
The new diversified business, especially if it
turns out to be successful, dilutes or lowers
the value of investors’ shareholding.
© 2014 Berlin Asong. All rights reserved. 140
141. Learning Objectives
I. Define product management.
II. Discuss the constituents of a product.
i. Examine the significance product elements.
III. Evaluate the role of product packaging in consumers’ buying decisions.
IV. Evaluate four product-growth decisions.
V. Use techniques for product management.
© 2014 Berlin Asong. All rights reserved. 141
143. Product life-cycle
BCG Matrix
GE-McKinsey Matrix
Cost-Benefit Analysis
Discounted Cash Flow Analysis
Payback Period analysis
Breakeven Analysis
Etc.
© 2014 Berlin Asong. All rights reserved. 143
145. Raymond Vernon–
Product Life-cycle, (1966)
Economist, Professor
1914-1999
© 2014 Berlin Asong. All rights reserved. 145
146. Philip Kotler & Gary Armstrong (2009) Principles of Marketing, 13Ed.
© 2014 Berlin Asong. All rights reserved. 146
147. As a product manager, what
actions would you take to
minimise the cost and maximise
the sales of a product through
out its lifecycle?
© 2014 Berlin Asong. All rights reserved.
148. Which element or
mix of elements Product
would you use to Planet Price
manage the
product along its
life-cycle? Process Marketing Mix Place
Physical Promotion
Layout
People
© 2014 Berlin Asong. All rights reserved. 148
151. iPad 3 launch, March 7 2012
© 2014 Berlin Asong. All rights reserved.
152. Product
Planet Price
Process Marketing Mix Place
Physical Promotion
Layout
People
© 2014 Berlin Asong. All rights reserved. 152
153. Product
Plan Price
Marketing
Process Place
Mix
Physical
Promotion
Layout
People
© 2014 Berlin Asong. All rights reserved. 153
156. Product
Planet Price
Marketing
Process Place
Mix
Physical
Promotion
Layout
People
© 2014 Berlin Asong. All rights reserved. 156
158. Product
Planet Price
Marketing
Process Place
Mix
Physical
Promotion
Layout
People
© 2014 Berlin Asong. All rights reserved. 158
159. Product
Planet Price
Marketing
Process Place
Mix
Physical
Promotion
Layout
People
© 2014 Berlin Asong. All rights reserved. 159
160. Product
Planet Price
Marketing
Process Place
Mix
Physical
Promotion
Layout
People
© 2014 Berlin Asong. All rights reserved. 160
164. Product
Planet Price
Marketing
Process Place
Mix
Physical
Promotion
Layout
People
© 2014 Berlin Asong. All rights reserved. 164
166. Product
Planet Price
Marketing
Process Place
Mix
Physical
Promotion
Layout
People
© 2014 Berlin Asong. All rights reserved. 166
168. Product Life-Cycle
Has it got limitations?
© 2014 Berlin Asong. All rights reserved. 168
169. 1 Can you locate the precise
stage of the product on its life-cycle?
Introduction Growth Maturity Decline
0
Low rivalry Increasing Stronger rivalry Extreme
rivalry Rivalry
© 2014 Berlin Asong. All rights reserved. 169
170. Difficult to determine
an accurate position of a
product on the curve.
© 2014 Berlin Asong. All rights reserved. 170
171. 2 Do all products actually go
through such a neat, tidy curve?
Introduction Growth Maturity Decline
0
Low rivalry Increasing Stronger rivalry Extreme
rivalry Rivalry
© 2014 Berlin Asong. All rights reserved. 171
173. A fall in sales doesn’t necessarily
mean the product or industry
has reached maturity or decline.
© 2014 Berlin Asong. All rights reserved. 173
174. 3
Do all products
“die-out”?
© 2014 Berlin Asong. All rights reserved. 174
178. The BCG Matrix is a…
…tool used for deciding
how to allocate resources
to a group of products.
© 2014 Berlin Asong. All rights reserved. 178
179. Product Portfolio
The total range of products owned by a firm.
© 2014 Berlin Asong. All rights reserved. 179
180. Product Mix
Variety of products owned by a firm.
© 2014 Berlin Asong. All rights reserved. 180
181. Product Line
A group of products sharing a common
parental name or common characteristics.
© 2014 Berlin Asong. All rights reserved. 181
182. Homecare Skincare Food&Beverages
It’s the start of a new financial year.
Your job as CFO is to allocate specific
funding for each of the three businesses
owned by Unilever. Assuming you have
a total budget of £10m. Allocate the
funding & justify your decision.
© 2014 Berlin Asong. All rights reserved. 182
183. How much funding
should we allocate to
homecare, skincare and
food & beverages?
© 2014 Berlin Asong. All rights reserved. 183
184. …it depends on the market
share of each business, and
its market growth rate.
© 2014 Berlin Asong. All rights reserved. 184
185. What is market
share? Why is it
an important
indicator?
© 2014 Berlin Asong. All rights reserved. 185
186. 120 UK Mobile Phones Market Volume : million units, 2008–2012
Market demand (million units) 100
80
60
40
20
2008 2009 2010 2011 2012 2013 2014 2015 2016
What is market
growth rate? Why is it an
important indicator?
© 2014 Berlin Asong. All rights reserved. 186
187. Is the growth rate rising,
falling or stagnant?
© 2014 Berlin Asong. All rights reserved. 187
188. The sweetest spot for any business is to…
“…achieve the maximum
market share that generates the
most cash with minimal costs.”
© 2014 Berlin Asong. All rights reserved. 188
190. MarketShare
High Low
High
MarketGrowthRate
Low
© 2014 Berlin Asong. All rights reserved. 190
192. The results from the BCG Matrix analysis…
…can reveal possible
strategies to adopt for a
given product or business.
© 2014 Berlin Asong. All rights reserved. 192
193. What actions would you
adopt for a star product?
© 2014 Berlin Asong. All rights reserved. 193
194. Star Business: Strategic Options
Grow market share leadership.
Penetrate market withexisting product.
Innovateexisting product.
BoostR&D expenditure.
Allocatethe best resources.
© 2014 Berlin Asong. All rights reserved. 194
195. What actions would you
adopt for a cash-cow product?
© 2014 Berlin Asong. All rights reserved. 195
196. Cash-cow Business: Strategic Options
Defend market share leadership.
Penetrate market withexisting product.
Acquire rival firms.
Innovateexisting product.
Reduce R&D expenditure.
Seek operational efficiency.
© 2014 Berlin Asong. All rights reserved. 196
197. What actions would you adopt
for a question-mark product?
© 2014 Berlin Asong. All rights reserved. 197
198. Question-mark Business: Strategic Options
Grow market share.
Acquire rival firms.
Innovateexisting product.
PrudentlyboostR&D expenditure.
Prudentlyallocate thebest resources.
© 2014 Berlin Asong. All rights reserved. 198
199. What actions would you
adopt for a dog product?
© 2014 Berlin Asong. All rights reserved. 199
200. Dog Business: Strategic Options
Sell the business.
Kil the business.
Prudentlyinnovateexisting product.
Cost-cutting.
© 2014 Berlin Asong. All rights reserved. 200
201. Homecare Skincare Food&Beverages
As CFO, you have allocated
funding for each business based
on market share and market growth
rate. Is that a valid decision? Explain.
© 2014 Berlin Asong. All rights reserved. 201
202. False assumption
of equating market-share
to profitability.
1
© 2014 Berlin Asong. All rights reserved. 202
203. False assumption of
2 equating market-growth to
industry attractiveness.
© 2014 Berlin Asong. All rights reserved. 203
206. Our focus is on the…
GE Matrix.
© 2014 Berlin Asong. All rights reserved. 206
207. The GE Matrix analysis…
…reveals what strategy
a business should adopt by
analysing its strengths and
industry attractiveness.
© 2014 Berlin Asong. All rights reserved. 207
209. Industry Attractiveness
PESTEL Forces.
Porter’s Five Forces.
Market growth rate.
Market Size.
Etc.
© 2014 Berlin Asong. All rights reserved. 209
210. Competitive Strength of Business
Market share.
Resources.
Finance.
Talents.
Knowledge.
Strategic alliances.
Brand | reputation.
Culture.
R&D.
Etc.
© 2014 Berlin Asong. All rights reserved. 210
211. High Invest | Grow
IndustryAttractiveness
Medium Hold
Harvest| Divest
Low
High Medium Low
CompetitiveStrengthofBusiness
© 2014 Berlin Asong. All rights reserved. 211
212. Mooradian, Matzler & Ring (2012), “Strategic Marketing”. 1st Ed., Pearsoned
© 2014 Berlin Asong. All rights reserved. 212
214. A thorough examination of
the financial and non-financial
costs and benefits of a proposed
investment in a product project.
© 2014 Berlin Asong. All rights reserved. 214
216. The amount of time (in weeks, years or months) it takes for a
business to make back the money it spends on a specific investment.
© 2014 Berlin Asong. All rights reserved. 216
217. Source: Johnson, J., Scholes, K. & Whittington, R. (2007) “Exploring Corporate Strategy”, 8 ed.
© 2014 Berlin Asong. All rights reserved. 217
219. It’s the NPV of the future
cash flows generated by a
proposed investment.
NPV:NetPresentValue
© 2014 Berlin Asong. All rights reserved. 219
220. Cash Cash Net Cash
−2 million
Inflows (£) Outflows (£) Flows (£)
2011 2 million
2012 7 million 4.5 million 2.5 million
2013 10 million 6 million 4 million
2014 15 million 9.5 million 5.5 million
2015 18 million 10 million 8 million
2016 20 million 10 million 10 million
2017 25 million 12 million 13 million
2018 30 million 13 million 17 million
What is the NPV of a £2m
investment in a physical asset if the
discount rate is 10% in the next 7 years?
© 2014 Berlin Asong. All rights reserved. 220
222. Because the NPV (£35.4m) is
positive, the benefits (£35.4m) of the
investment exceed the cost(£2m).
NPV:NetPresentValue
© 2014 Berlin Asong. All rights reserved. 222