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Chapter 12 - Leveraging the business. This chapter presents the following content: Which assets and competencies can be leveraged? brand extensions, expanding the scope of the offering, new markets, evaluating business leveraging options, the mirage of synergy. | PPT 12- Chapter Twelve Leveraging the Business Strategic Market Management 7th Edition – David Aaker PPT 12- Growth Options Which assets and competencies can be leveraged? What brand extensions are possible? Can the scope of the offering be expanded? Do viable new markets exist? PPT 12- Which Assets and Competencies Can be Leveraged? Marketing Skills Capacity in Sales or Distribution Manufacturing Skills R&D Skills Achieving Economies of Scale PPT 12- Brand Extensions Does the brand fit the new product context? Does the brand add value to the offering in the new product class? Will the extension enhance the brand name and image? PPT 12- Brand Extension Logic Brand New Offering Add Value Enhance Brand Fit Figure 11.1 PPT 12- New Products for Existing Markets Expand boundaries: From laundering rags to maintaining factories From salty potato chips to all snacks Explore customer use context Strategic Market Management 7th Edition – David Aaker PPT 12- New Markets for Existing Products Expanding Geographically Expanding into New Market Segments Distribution Channel Age Home vs. Office Strategic Market Management 7th Edition – David Aaker PPT 12- Evaluating Business Leveraging Options Is the product-market Attractive? Is the core business successful? Can the core business be transferred to the new product-market? How much of a stretch is it? Will the new business be successful, become a market leader? Is the leverage strategy repeatable? Question: If the criteria are clear, why do so may new businesses fail? What judgments go wrong? Strategic Market Management 7th Edition – David Aaker PPT 12- The Mirage of Synergy Potential Synergy Does not Exist Potential Synergy Exists But is Unattainable Potential Synergy is Overvalued Strategic Market Management 7th Edition – David Aaker PPT 12- Key Learnings Leveraging assets and competencies involves identifying them and creatively determining in what business areas they might be able to contribute. Brand extensions should both help and be enhanced by the new offering, in addition to being perceived to have a fit with it. The business can be leveraged by introducing new products to the market or expanding the market for the existing products. In doing so, the new product market should be attractive, be accessible to the business with its current assets and competencies, and have access to the needed resources to be successful. Entering a new product market is risky, as the new offering might lack market acceptance or needed resources. Success likelihood goes up if the core business is healthy, if the new product market is attractive (competitors will be profitable), if the business model is repeatable, if market leadership is possible, and if the stretch from the core is small. Synergy can be a mirage. Too often, it does not exist, or it exists but is unattainable or overvalued. PPT 12- Ancillary Slides Strategic Market Management 7th Edition – David Aaker PPT 12- “Results are gained by exploiting opportunities, not be solving problems.” - Peter Drucker Strategic Market Management 7th Edition – David Aaker PPT 12- “The more opportunities I seize, the more opportunities multiply before me.” - Sun Tzu Strategic Market Management 7th Edition – David Aaker PPT 12- “The most dangerous moment comes with victory.” - Napoleon
