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Based on your research of consumer needs in our main markets, describe your value proposition, or the benefits that ACME and its potential new product would provide to customers. Remember, a value proposition is essentially the promise that is made to the customer; the value that the product provides to the consumers, and which would compel them to buy it. Also provide a half-page recommendation to ACME on whether or not to manufacture that product.Then Combine the first two (Part 1&2) deliverables into a single report after making any necessary corrections and edit them to ensure that there is clear flow of ideas from one section to the other.In addition, prepare a one-page executive summary (following the cover page) that highlights the most important findings of the report. APA style should be applied to in-text citations and in the reference list. project_1_part_two_steps.docx strategic_planning.pdf value_proposition.docx value_proposition.pdf Unformatted Attachment Preview Project 1: Researching Consumer Buying Behavior Step 5: Complete Your Value Proposition Early in Week 2, submit a one-page value proposition to Erik. INBOX: 1 New Message From: Erik Knops, CEO, ACME To: You Just a quick note, I wanted to clarify that a customer-focused value proposition explains the reason why a customer purchases a product or uses a service (i.e., the value that a company delivers to its customers). Deliverable: Based on your research of consumer needs in our main markets, describe your value proposition, or the benefits that ACME and its potential new product would provide to customers. Remember, a value proposition is essentially the promise that is made to the customer. Also provide a half-page recommendation to ACME on whether or not to manufacture that product. Support your work with the course readings, scholarly sources, and reliable nonscholarly sources, such as Reuters, Bloomberg, Yahoo! Finance, Barrons.com, Morningstar.com, Money, Forbes, Fortune, the Financial Times, the Wall Street Journal, and the Harvard Business Review, as well as the UMUC Library databases, such as Hoover’s. All sources need to be cited using APA formatting, both within the text and in the reference list. The value proposition should be organized using headings and subheadings to improve its readability. I know these are tight turnarounds, but I have no doubt youll knock this out, Erik Step 6: Complete Your Final Consumer Buying Behavior Report Deliverable: By the end of Week 2, combine the first two deliverables into a single report after making any necessary corrections and edit them to ensure that there is clear flow of ideas from one section to the other. In addition, prepare a one-page executive summary (following the cover page) that highlights the most important findings of the report. APA style should be applied to in-text citations and in the reference list. Your final report to Erik should be eight to nine pages, excluding cover page, executive summary, the reference list, and appendices. Any graphs, tables, and figures should be included as appendices. Your report should have one-inch margins and be double spaced in 12-point Times New Roman font. The report should be organized using headings and subheadings to improve its readability. 1/12/2020 Strategic Planning Learning Resource Strategic Planning What Is a Value Proposition? Individual buyers and organizational buyers evaluate products and services to see if they provide desired benefits. For example, when youre exploring vacation options, you want to know the benefits of each destination and the value you will get by going to each place. Before you (or a firm) can develop a strategy or create a strategic plan, you have to develop a value proposition. A value proposition is a 30-second elevator speech stating the specific benefits a product or service offering provides a buyer. It shows why the product or service is superior to competing offers. The value proposition answers the questions, Why should I buy from you or why should I hire you? As such, the value proposition becomes a critical component in shaping strategy. The following is an example of a value proposition developed by a sales consulting firm: Our clients grow their business, large or small, typically by a minimum of 30 percent to 50 percent over the previous year. They accomplish this without working 80-hour weeks and sacrificing their personal lives (Lake, 2016). Note that although a value proposition will hopefully lead to profits for a firm, when the firm presents its value proposition to its customers, it doesnt mention its own profits. Thats because the goal is to focus on the external market or what customers want. Firms typically segment markets and then identify different target markets, or groups of customers, that they want to reach when firms are developing their value propositions. Be aware that companies sometimes develop different value propositions for different target markets just as individuals may develop a different value proposition for different employers. The value proposition tells groups of customers (or potential employers) why they should buy a product or service, vacation to a particular destination, donate to an organization, hire you, etc. https://leocontent.umuc.edu/content/umuc/tgs/mba/mba640/2201/learning-resourcelist/strategic-planning.html?ou=441265# 1/18 1/12/2020 Strategic Planning Once the benefits of a product or service are clear, the firm must develop strategies that support the value proposition. The value proposition serves as a guide for this process. In the case of our sales consulting firm, the strategies it develops must help clients improve their sales by 30 percent to 50 percent. Likewise, if a companys value proposition states that the firm is the largest retailer in the region with the most stores and best product selection, opening stores or increasing the firms inventory might be a key part of the companys strategy. Looking at Amazons value proposition, Low price, wide selection with added convenience anytime, anywhere, one can easily see how Amazon has been so successful (InfoMarketersZone.com, n.d.). Individuals and students should also develop their personal value propositions. Tell companies why they should hire you or why a graduate school should accept you. Show the value you bring. A value proposition will help you in different situations. Think about how your internship experience and/or study abroad experience may help a future employer. For example, you could explain to the employer the benefits and value of going abroad. Perhaps your study abroad experience helped you understand customers that buy from Company X and your customer service experience during your internship increased your ability to generate sales, which improved your employers profit margin. Thus you may be able to quickly contribute to Company X, something that Company X might value. Key Points A value proposition is a 30-second elevator speech stating the specific value a product or service provides to a target market. Firms may develop different value propositions for different groups of customers. The value proposition shows why the product or service is superior to competing offers and why the customer should buy it or why a firm should hire you. Components of the Strategic Planning Process Conducting a Situation Analysis As part of the strategic planning process, a situation analysis must be conducted before a company can decide on specific actions. A situation analysis involves analyzing both the external (macro and micro factors outside the organization) and the internal (company) environments. The firms internal environment—such as its financial resources, technological resources, and the capabilities of its personnel and their performance—has to be examined. It https://leocontent.umuc.edu/content/umuc/tgs/mba/mba640/2201/learning-resourcelist/strategic-planning.html?ou=441265# 2/18 1/12/2020 Strategic Planning is also critical to examine the external macro and micro environments the firm faces, such as the economy and its competitors. The external environment significantly affects the decisions a firm makes, and thus must be continuously evaluated. For example, during the economic downturn in 2008–2009, businesses found that many competitors drastically cut the prices of their products. Other companies reduced package sizes or the amount of product in packages. Firms also offered customers incentives (free shipping, free gift cards with purchase, rebates, etc.) to purchase their goods and services online, which allowed businesses to cut back on the personnel needed to staff their brick-and-mortar stores. While a business cannot control things such as the economy, changes in demographic trends, or what competitors do, it must decide what actions to take to remain competitive—actions that depend in part on the internal environment. Conducting a SWOT Analysis Based on the situation analysis, organizations analyze their strengths, weaknesses, opportunities, and threats, conducting whats called a SWOT analysis. Strengths and weaknesses are internal factors and are somewhat controllable. For example, an organizations strengths might include its brand name, efficient distribution network, reputation for great service, and strong financial position. A firms weaknesses might include lack of awareness of its products in the marketplace, a lack of human resources talent, and a poor location. Opportunities and threats are factors that are external to the firm and largely uncontrollable. Opportunities might entail the international demand for the type of products the firm makes, few competitors, and favorable social trends such as people living longer. Threats might include a bad economy, high interest rates that increase a firms borrowing costs, and an aging population that makes it hard for the business to find workers. You can conduct a SWOT analysis of yourself to help determine your competitive advantage. Perhaps your strengths include strong leadership abilities and communication skills, whereas your weaknesses include a lack of organization. Opportunities for you might exist in specific careers and industries; however, the economy and other people competing for the same position might be threats. Moreover, a factor that is a strength for one person (say, strong accounting skills) might be a weakness for another person (poor accounting skills). The same is true for businesses. The easiest way to determine if a factor is external or internal is to take away the company, organization, or individual and see if the factor still exists. Internal factors such as strengths and weaknesses are specific to a company or individual, whereas external factors such as opportunities and threats affect multiple individuals and organizations in the marketplace. For example, if you are doing a situation analysis on PepsiCo and are looking at the weak https://leocontent.umuc.edu/content/umuc/tgs/mba/mba640/2201/learning-resourcelist/strategic-planning.html?ou=441265# 3/18 1/12/2020 Strategic Planning economy, take PepsiCo out of the picture and see what factors remain. If the factor—the weak economy—is still there, it is an external factor. Even if PepsiCo hadnt been around in 2008– 2009, the weak economy reduced consumer spending and affected a lot of companies. Assessing the Internal Environment When an organization evaluates which factors are its strengths and weaknesses, it is assessing its internal environment. Once companies determine their strengths, they can use those strengths to capitalize on opportunities and develop their competitive advantage. For example, strengths for PepsiCo are what are called mega brands, or brands that individually generate over $1 billion in sales (PepsiCo, n.d.). These brands are also designed to contribute to PepsiCos environmental and social responsibilities. PepsiCos brand awareness, profitability, and strong presence in global markets are also strengths. Especially in foreign markets, the loyalty of a firms employees can be a major strength, which can provide it with a competitive advantage. Loyal and knowledgeable employees are easier to train and tend to develop better relationships with customers. This helps organizations pursue more opportunities. Although the brand awareness for PepsiCos products is strong, smaller companies often struggle with weaknesses such as low brand awareness, low financial reserves, and poor locations. When organizations assess their internal environments, they must look at factors such as performance and costs as well as brand awareness and location. Managers need to examine both the past and current strategies of their firms and determine what strategies succeeded and which ones failed. This helps a company plan its future actions and improves the odds it will be successful. For example, a company might look at packaging that worked very well for a product and use the same type of packaging for new products. Firms may also look at customers reactions to changes in products, including packaging, to see what works and doesnt work. When PepsiCo changed the packaging of major brands in 2008, customers had mixed responses. Tropicana switched from the familiar orange with the straw in it to a new package and customers did not like it. As a result, Tropicana changed back to the familiar orange with a straw after spending $35 million for the new package design. Individuals are also wise to look at the strategies they have tried in the past to see which ones failed and which ones succeeded. Have you ever done poorly on an exam? Was it the instructors fault, the strategy you used to study, or did you decide not to study? See which strategies work best for you and perhaps try the same type of strategies for future exams. If a strategy did not work, see what went wrong and change it. Doing so is similar to what organizations do when they analyze their internal environments. https://leocontent.umuc.edu/content/umuc/tgs/mba/mba640/2201/learning-resourcelist/strategic-planning.html?ou=441265# 4/18 1/12/2020 Strategic Planning Assessing the External Environment Analyzing the external environment involves tracking conditions in the macro and micro marketplace that, although largely uncontrollable, affect the way an organization does business. The macro environment includes economic factors, demographic trends, cultural and social trends, political and legal regulations, technological changes, and the price and availability of natural resources. The micro environment includes competition, suppliers, marketing intermediaries (retailers, wholesalers), the public, the company, and customers. When firms globalize, analyzing the environment becomes more complex because they must examine the external environment in each country in which they do business. Regulations, competitors, technological development, and the economy may be different in each country and will affect how firms do business. Although the external environment affects all organizations, companies must focus on factors that are relevant for their operations. For example, government regulations on food packaging will affect PepsiCo but not Goodyear. Similarly, students getting a business degree dont need to focus on job opportunities for registered nurses. The Competitive Environment All organizations must consider their competition, whether it is direct or indirect competition vying for the consumers dollar. Both nonprofit and for-profit organizations compete for customers resources. Coke and Pepsi are direct competitors in the soft drink industry, Hilton and Sheraton are competitors in the hospitality industry, and organizations such as United Way and the American Cancer Society compete for resources in the nonprofit sector. However, hotels must also consider other options that people have when selecting a place to stay, such as hostels, dorms, bed and breakfasts, or rental homes. A group of competitors that provide similar products or services form an industry. Michael Porter, a professor at Harvard University and a leading authority on competitive strategy, developed an approach for analyzing industries. Called the five forces model (Porter, 1980, pp. 3–33), the framework helps organizations understand their current competitors as well as organizations that could become competitors in the future. As such, firms can find the best way to defend their position in the industry. Competitive Analysis https://leocontent.umuc.edu/content/umuc/tgs/mba/mba640/2201/learning-resourcelist/strategic-planning.html?ou=441265# 5/18 1/12/2020 Strategic Planning When a firm conducts a competitive analysis, it tends to focus on direct competitors and tries to determine a firms strengths and weaknesses, its image, and its resources. Doing so helps the firm figure out how much money a competitor may be able to spend on things such as research, new product development, promotion, and new locations. Competitive analysis involves looking at any information (annual reports, financial statements, news stories, observation details obtained on visits, etc.) available on competitors. Another means of collecting competitive information is using mystery shoppers, or people who act like customers. Mystery shoppers might visit competitors to learn about their customer service and their products. Imagine going to a competitors restaurant and studying the menu and the prices and watching customers to see what items are popular and then changing your menu to better compete. Competitors battle for the customers dollar, and they must know what other firms are doing. Individuals and teams also compete for jobs, titles, and prizes and must figure out the competitors weaknesses and plans in order to take advantage of their strengths and have a better chance of winning. According to Porter, in addition to their direct competitors (competitive rivals), organizations must consider the strength and impact the following could have (Porter, 1980, pp. 3–33): substitute products potential entrants (new competitors) in the marketplace the bargaining power of suppliers the bargaining power of buyers When any of these factors change, companies may have to respond by changing their strategies. For example, because buyers are consuming fewer soft drinks these days, companies such as Coke and Pepsi have had to develop new, substitute offerings such as vitamin water and sports drinks. However, other companies such as Dannon or Nestlé may also be potential entrants in the flavored water market. When you select a hamburger fast-food chain, you also had the option of substitutes such as getting food at the grocery or going to a pizza place. When computers entered the market, they were a substitute for typewriters. Most students may not have ever used a typewriter, but some consumers still use typewriters for forms and letters. Suppliers, the companies that supply ingredients as well as packaging materials to other companies, must also be considered. If a company cannot get the supplies it needs, its in trouble. Also, sometimes suppliers see how lucrative their customers markets are and decide to enter them. Buyers, who are the focus of marketing and strategic plans, must also be considered because they have bargaining power and must be satisfied. If a buyer is large enough, and doesnt purchase a product or service, it can affect a selling companys https://leocontent.umuc.edu/content/umuc/tgs/mba/mba640/2201/learning-resourcelist/strategic-planning.html?ou=441265# 6/18 1/12/2020 Strategic Planning performance. Walmart, for instance, is a buyer with a great deal of bargaining power. Firms that do business with Walmart must be prepared to make concessions to them if they want their products on the companys store shelves. Lastly, the world is becoming smaller and more of a global marketplace. Companies everywhere are finding that no matter what they make, numerous firms around the world are producing the same widget or a similar offering (substitute) and are eager to compete. Employees are in the same position. The Internet has made it easier than ever for customers to find products and services and for workers to find the best jobs, even if they are abroad. Companies are also acquiring foreign firms. These factors all have an effect on the strategic decisions companies make. The Political and Legal Environment All organizations must comply with government regulations and understand the political and legal environments in which they do business. Different government agencies enforce the regulations that have been established to protect both consumers and businesses. For example, the Sherman Act (1890) prohibits US firms from restraining trade by creating monopolies and cartels. The regulations related to the ac ... Purchase answer to see full attachment