Sample MtsSiOi! Slalements important issues. Third, they define the major competitive spheres within which the company will operate;

□ Industry. The range ^Industries in which .a eotnpany will operate, Some companies will operate in only one industry: some only in a set of related industries; some only in industrial goods, consumer goods, or services; and some in any industry. For example DuPont prefers to operate in die Industrial market, whereas IJow is willing to operate in 1 Jit? industrial and consumer markets- 3M wi|] gel into almost any industry where it can mate money.

o Products and applications. the range of products and applications a company will supply. St. hide \tedical aims lo "serve physicians worldwide with high-quality products for cardiovascular care."

rj Competence. The range of technological and oth0t core competencies thai a company will master and leverage, japan's IMIitJ has built its cone competencies jit computing, communications, and components to support production of laptop computers, television receivers, and handheld telephones.

b Market segment. The type oi market or customers a company will serve. E:or example, Porsche mates only expensive ears. Gerber serves primarily ¡tie baby market.

■ Vertical. The number of channel levels from raw material to final product and distribution in which a company will participate. At one extreme are companies with a large vertical scope: at onetime Ford owned its own rubber plantations, sheep farms, £lass manufacturing plants, and steel foundries. At die other extreme are "hollowcolorations" or'pure marketing companies" consisting of a person with a phone, fas, computer, and desk who contracts out for every service, including design, manufacture, marketing, and physical distribution.^

a Geogrttf/hical. The range of tegioris, countries, or country groups in which a company will operate. At one extreme are companies that operate in a specific city or state. At the other are multinationals such as Unilever and Caterpillar, which operate in almost every country in the world.

Defining the Business

Companies often define their businesses in terms of products: They are in the "auto business" or the "dothins?, business." [Jul Levitt argues that market definitions of a business are superior to product definitions."1 A business must be viewed as a customer-satisfying process, nnt a grinds-product rig process. Products are transient; basic needs and customer groups endure forever, Transportation isn need: the horse and carriage, the automobile, the railroad, the airline, and the truck are products that meet thai need.

Levitt encouraged companies to redefine their businesses in terms oi needs, not products. Pitney-Howes Inc., an old-line manufacturer of postage meters, is in the process of doing just that. With old-fashioned paper mail under siege. Pitney-Beeves can no longer

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