A.T. Kearney - BU Strategy Training Program v.1.2

1IntroductionA.T.KEARNEYBUSINESSUNITSTRATEGYTRAININGContentsofModuleIIIntroductionIndustrystructure•Playersanalysis•Strategicgroupanalysis•Substitutionanalysis•Supplychainanalysis•ExitandentrybarrierassessmentDevelopmentoftheindustry•Industrystrategiceraanalysis•Lifecycleanalysis•TrendsanalysisProduct/marketanalysis•Sizeandgrowthofthemarket•Product/marketsegmentationDemandandsupplyeconomicsIndustryanalysisframeworks•Structure-conduct-performance•Thefiveforces•Thestrategictriangle2IntroductionA.T.KEARNEYBUSINESSUNITSTRATEGYTRAININGSegmentationistheprocessofdividingtheoverallmarketintogroupingsalongthedimensionsmostrelevanttomaximizingprofitintheindustryUSD1,300mill.GeographicsegmentsProductsegmentsTheMarket1997ChannelsSource:A.T.KearneyProduct/marketsegmentationProduct/marketanalysisDescription3IntroductionA.T.KEARNEYBUSINESSUNITSTRATEGYTRAININGMarketscanusuallybesegmentedalongfourgenericdimensionsSource:A.T.KearneySegmentationcategoryProductsCustomerGeographyDistributionchannelsDescriptionDifferenttypesavailabletothecustomers:size,technology,coststructure,types,package,etc.Clustersofusersdividedaccordingto:demographics,behavior,economiccharacteristics,etc.Differentareaswherethecustomersarepresentonaspatiallevel:regional,national,international,etc.Variousmeansofreachingthecustomers:wholesalers,nationalchains,specialtystores,mailorders,etc.Product/marketsegmentationProduct/marketanalysisUsage4IntroductionA.T.KEARNEYBUSINESSUNITSTRATEGYTRAININGSegmentsmustmeetfundamentalrequirementsRelevanceHowmuchandwhatthesegmentationaddstoourunderstandingofcustomer’sbehaviorandattitudesMeasurabilityThedegreetowhichthesizeandpurchasingpowerofsegmentscanbemeasuredAccessibilityThedegreetowhichthesegmentscanbeeffectivelyreachedandservedSubstantialityThedegreetowhichthesegmentsarelargeand/orprofitableenoughtobeworthconsideringforseparatemarketingattentionDurabilityThedegreetowhichsegmentswilldiminishastheproductcategoryorindustrymaturesRequirementSource:A.T.KearneyCommentProduct/marketsegmentationProduct/marketanalysisUsage5IntroductionA.T.KEARNEYBUSINESSUNITSTRATEGYTRAINING3ProductsegmentsintheconfectioneryindustryUSDMill.Source:A.T.KearneyAproductsegmentmapgivesanoverviewofthevariousofferingsandtheirplacewithintheoverallindustrySource:A.T.KearneyAnoverall,broadindustrydefinitionprovidesacontextforaspecificofferingThepositionofthespecificmarketofrelevance25%15%10%10%5%5%30%Gummi-productsLicoriceToffeeSugarPurechocolateFilledchocolateOtherPick&Mix100%=3,300ExampleProduct/marketsegmentationProduct/marketanalysis6IntroductionA.T.KEARNEYBUSINESSUNITSTRATEGYTRAINING3Danishconsumerhabits-mixedcandybagsPercentSource:A.T.Kearney;IndexDK/GallupmarketingCustomersegments,onagenericlevel,illustratecharacteristicsabouttheconsumerSource:A.T.KearneyAsegmentationcanbeperformedinanumberofways.Itisthestrategist’sjobtofindthemostmeaningfuldepictionofthemarketcomponentsDaily/almostdaily3-4timesaweek1-2timesaweek1-3timesamonth1-5timesperhalfyearRarelyNeverUnans-wered0%1%11%29%17%19%22%016%26%42%4%22%SticktobrandShiftamong2-3brandsChooseamongallbrandsDonotknowNeveruse•75-80%percentoftheconsumersbuymixedcandyinbags•Morethanhalfoftheconsumerschooseamongdifferentproducts/brandsCharacteristicsabouttheconsumerhighlightchallengesoropportunitieswithinthemarketSource:100%=4,428respondentsFrequencyLoyaltyExampleProduct/marketsegmentationProduct/marketanalysis7IntroductionA.T.KEARNEYBUSINESSUNITSTRATEGYTRAININGGeographicsegmentationcanprovetobeveryrevealingdependingontheindustry3ConsumptionofsugargoodsisgreatestinDenmark,Ireland,andGermanyKg.percapita–1994Source:LeatherheadFood;IOCCC6.598.086.768.089.266.768.905.404.905.045.854.093.414.592.501.182.141.501.009.855.816.134.362.915.042.635.315.225.084.185.534.633.092.133.312.132.541.77DenmarkGermanySwitzerlandAustriaUSAAustraliaFinlandGreeceItalyJapanSugarGoodsChocolateGoods100%=15.4413.8912.8912.4412.1711.5311.8010.7110.1210.1210.038.047.679.624.634.494.274.042.77GeographicsegmentscanbeusefulbothforbenchmarkingagainstneighboringareasortoreflectmarketopportunitiesabroadAreasofparticularinterestorpotential(e.g.,theScandinavianmarket)canbehighlightedSource:A.T.KearneyIrelandNorwayTheNetherlandsFranceSpainBrazilBelgiumGreatBritainSwedenExampleProduct/marketsegmentationProduct/marketanalysis8IntroductionA.T.KEARNEYBUSINESSUNITSTRATEGYTRAININGDistributionofconfectioneryproductsbywholesalechannelSource:A.T.Kearney3Supermarketsdistributeapprox.twiceasmuchcandyasconveniencestoresdoTonsDistributionchannelscanoftenbethelifelineofaproductGroupingsofdistributionchannelscanhighlightthepotentialmarketareasthatoffersignificantexpansionopportunity100%=30,70727,384tonsMetroandothersDagrofakioskSügroLekkerlandVibhamDagrofaDanskSupermarked*Otherdiscountchains**FDBGroup***Totalmarketshare33.9%6.08.89.612.64.56.516.228.25.68.27.29.65.67.78.816.031.37.6Totalmarketshare66.1%SugargoodsChocolateConveniencestoresectorSupermarketsExcl.NettoAldi,Fakta,NettoExcl.FaktaSource:A.T.Kearney******ExampleProduct/marketsegmentationProduct/mar