Business Strategy & the Marketing Program

Business strategies

(Porter’s typology)Overall cost leadership

broad focus narrow focus

Differentiation broad focus narrow focus

Porter’s Typology

Cost Leadership

Differentiation

Narrow Focus

Broad Focus

Business strategy

Miles & Snow’s typology

ProspectorsDefendersAnalyzersReactors

Miles & Snow Typology

ProspectorsAggressive in new product

development“First mover”High expenditures in new product

R&DOften found in technology-oriented

industries

Miles & Snow Typology

ProspectorsOften found in “new” industriesOften in introduction or early growth

stage of PLC

Miles & Snow Typology

ProspectorsCustomer segments often not well

defined Relatively inefficient in terms of cost-

per-unitOften “cash hungry” Sharing resources with other SBUs

diminishes flexibility

Miles & Snow Typology

DefendersFocus on maintaining position

may entail aggressive marketing efforts Typically found in mature markets

(grocery, soft drinks, etc.)“Cash cows”

Miles & Snow Typology

DefendersTargets “mass market”Repeat/replacement buyersUnderpinned by stable technologyStable, established competitors

Miles & Snow Typology

DefendersCompete through

cost-reduction through process engineering operating synergies with other SBUs

quality improvement R&D price competition promotion

Miles & Snow Typology

DefendersLow-cost defenders (Porter+Miles &

Snow) significant economies of scale and

manufacturing efficiency (process engineering)

low-cost sources of supply

Miles & Snow Typology

DefendersLow-cost defenders (Porter+Miles &

Snow) (cont’d) try to maintain the “low cost” position in

their markets may focus on low price offerings at the

expense of marketing, sales, or service often focus on “commodity-type”

products

Miles & Snow Typology

DefendersDifferentiated defenders

(Porter+Miles & Snow) differentiated offerings cost of differentiation increases cost

structure often found in fragmented markets

Miles & Snow Typology

Analyzers Elements of both prospectors and

defendersFocus on maintaining position in core

marketsSelective pursuit of new product

opportunities

Miles & Snow Typology

Analyzers Low cost analyzers (Porter+Miles &

Snow) maintain “low cost” position when

selectively expanding into new markets Differentiated analyzers (Porter+Miles &

Snow) expand into new markets with

“differentiated” offerings

Miles & Snow Typology

Reactors No well-defined strategyReactive decision-making

Porter & Miles & Snow Combined (BW&L, p. 216)

Prospector Analyzer Defender Reactor

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Emphasis on new product-market growth(Miles & Snow)

DifferentiatedDefender

Low-costDefender

DifferentiatedAnalyzer

Low-costAnalyzer

Miles and Snow s Miles and Snow TypologyExamples

Defender: McDonald’s

Prospector: Reebok International, Mrs. Fields

Analyzer: Procter & Gamble (Crest), Starbucks

Reactor: W.T. Grant