Lecture Reviews about Business Marketing Strategy Management

Question: 1. Discuss each of the issues raised and use the material from the lectures and other sources. 2. Where appropriate use references in the Harvard style, and diagrams and theories Answer: 1:- There are many factors that affect the marketing management and help in building and maintain the form has with its target customers. These environment factors include macro- environmental factors like demographics, natural forces, economic, political and legal forces. As the firm operates in these macro environment forces it both pose threats and shape oppurtunities for the firm. As these factors influence a firm development and performance but these factors are outside the control of the firm.( Weick, 2000) Environmental scanning has always helped firms or organisations to use and acquire information about relationships, trends and events in a firms external environment.( Anderson Nicols, 2007) This knowledge helps the management to plan the course of action for future strategies. This scanning helps them to understand the external environment and change their strategies accordingly which helps them to gain competitive advantage along with improving short and long term planning. This environment analysis is about searching for information and along with viewing this information. Figure 1:- A conceptual Framework for Environmental scanning or analysis (Choo, 2000) But does the environmental analysis or scanning help the firms with their business has been studied by many. West in the year 1988 examined the relationship between environment analysis and organisational strategy in the US food industry. (West, 1988)He used the data from about 65 companies and found out that environmental analysis had a substantial influence on the organisation sales and assets.( Subramanian,FernandesHarper, 1993) Subramanian in the year 1993 studied environment analysis in US fortune 500 companies and found out that growth and profitability depended on environmental analysis. Choo in the year 2001 suggested how managers who had higher level of perceived environmental uncertainty usually tend to go for a higher level of environmental analysis.( Choo, 2000) Lets take an example of Motorola whose strategic intelligence system was the first in the 80s. Motorola hired Jan Herring who was an intelligence officer by profession as he designed the scanning system or analysi s system. Through him the corporate office ran maintained and coordinated the central database along with the supporting operating divisions. But the operating divisions took the tactical and operational decisions themselves as they did the environment analysis were being done on divisional level. The staff and the management have been trained for both the business and intelligence experience as they analyse the information that is gathered by the environment analysis. They also base strong emphasis on the information gathered from foreign countries. As Motorola is one of the very few US firms that analyses its data in countries like Japan that helps them to develop and maintain successful relationships with Japanese firms and researchers.( Peteraf Bergen,2003) Now lets take an example of socio cultural factor that is demographic changes such as population changes. In the US the decline in population due to decrease in birthrate and increase in aging population due to better health facilities caused in an increase in the average age. Thus changing with the scenario many companies that were first targeting the youth are now trying to appeal the older generation. One such example is of Levi Strauss co which was in the past very popular among the younger generation. But now they have created a new label Dockers to attract the adult market which is becoming very popular among the older generation. Many times environmental analysis results in huge profits for the firms example Ford Motor successfully analysed the technological change that was needed in their Norfolk assembly plant. They updated to a F-150 assembly line that not only created 270 new jobs but also increased their production by eleven percent. 2:- The competitive advantage of an organisation is likely to be based on the strategic capabilities it has that are valuable to customers and that its rivals do not have, or have difficulty in obtaining, Johnson, Whittington and Scholes (2014). This could be best understood by taking an example of Yahoo and its leaked memo that was issued by manager Brad Garlinghouse. This memo in the media was named as the Peanut butter manifesto as it accused Yahoo senior management of lacking any strategic direction. Brad has pointed out how the growth of the company has slowed down as Yahoo was being overtaken by Google. The share price and the revenues that were being generated from online advertisements have decreased significantly. He explained how Yahoo like peanut butter is spread too thin as a much needed strategic change is needed. Therefore we know that all firms whether it be a technological giant as Yahoo or any smaller firm face challenges regarding strategic decisions and directions. (Wang Ahmed, 2007) Firstly let us study what is a strategy.( Whittington, 2000) Strategy is a scope and direction for a firm over a period of long time that generates profit or advantage for the firm in a changing environment. Now lets concentrate that why issues are such as the one that Yahoo was facing were called strategic. The capabilities of any organisations are called strategic due to many reasons some of them are when a long term direction is needed in any organisation as in the case of Yahoo. Brad Garlinghouse has successfully analysed that Yahoo needed a marathon realization and improvement in its strategies. Another reason for a strategic capability build up would be advantage over the competitors as we have already read that in the case of Yahoo it was getting lagged and overtaken by Google. Thus strategic capabilities that would resolve this issue can be many such as providing better services than your competitors. (Lovallo Kahneman, 2003) Nokia is another example of a company that is growing due to its strategy to keep customers as their main priority. They believe in focusing on people and using technology to help people feel closer. There business strategy focuses on five areas that are build networks, focus on technology to create new devices, expand services, embrace internet services being used by consumers and deliver solutions. They invest in customer fulfillment and engagement, brand and design and architecture and technology. (YigangChi,1999)Strategies do not happen on their own there are people who plan and execute them. There are many factors that have to be taken care of while generating and forming a strategy such as Environment, and the strategic capability of an organisation. We have to realize that where the competitive advantage lies in a firm or organisation. This can be achieved by analyzing the internal constraints and influences. We learnt from both the examples of Nokia and Yahoo that strategic c apability of a firm can be a combination of the resources or the high levels of core competence. (YigangChi, 1999) Figure 2:- Strategic capabilities and competitive advantage Organisations are not identical they have different capabilities as in the case of Sainsburys, Asda and Tesco. All three are from the same environment yet Tesco is the superior performer amongst them. Thus the firm can only obtain competitive advantage when it focuses on capabilities that its competitors do not possess. Reference Anderson Nicols, M.H. M.L. , 2007, Information gathering and changes in threat and opportunity perceptions,Journal of Management Studies, 44(3), 367387 Choo, C W, 2000,Information management for the intelligent organization: the art of scanning the environment, 3rd ed, Medford, NJ: Information Today, Inc West, J J , 1988,Strategy, environmental scanning, and their effect upon firm performance: an exploratory study of the food service industry, 1st ed, Blacksburg, VA: Virginia Polytechnic Institute and State University Weick, K E, 2000,Making sense of the organization, 1st ed, Boston, MA: Blackwell Publishers Subramanian,FernandesHarper, R, N E, 1993, "Environmental scanning in US companies: their nature and their relationship to performance." .Management International Review, 33 (3), 271-286 Lovallo Kahneman, D. D. , 2003, Delusions of success,Harvard Business Review, 81(7), 5664 Peteraf Bergen, M.A. M.E. , 2003, Scanning dynamic competitive landscapes: a market and resource based framework,Strategic Management Journal, 24(10), 10271042 Wang Ahmed, C.L. P.K. , 2007, Dynamic capabilities: a review and research agenda, International Journal of Management Reviews, 9(1), 3152 Whittington, R. , 2000,What is Strategy and Does it Matter?, 2nd ed, UK: Thomson YigangChi, P P S.K. , 1999, "Financial Performance and Survival of Multinational Corporations in China." ,Strategic Management Journal, 20(1), 359374