Competitive Business Environment - Term Paper Example

Introduction The fast changing socio economic dynamics have created a fiercely competitive business environment. In the rapidly changing environment of globalization, change is essential for development and organizations tend to adapt to the constantly evolving business environment. “Organizations must change because their environments change” (Bateman, 1990). They implement necessary changes in the organization to not only survive but compete with their rival with confidence. Changing environment of technological advancement has made it imperative for one to evolve new marketing strategy in order to maintain an edge over their rivals. The changing business strategies to cope with the fast transforming socio-economical paradigms of the times have become crucial factors that enable the businesses to compete against their rivals. The external factors are often the major proponents that necessitate organizational changes. Recessive trends The world economy is presently undergoing tremendous turmoil. In the recent past, the American economy has been under tremendous strain with its deteriorating job market and dismal performance of its various public private companies. Its offshore business has also suffered as a result of bad economic policies of the current republican government, headed by George Bush. The bankruptcy of few of its major financial institutions has resulted in the financial meltdown that has created a serious crisis situation in the American economy that has cascaded down to the rest of the world. The recessive trend in the American economy has forced the businesses to meet the challenges with creative business strategies and embrace the changing business compulsions with vigour and vitality. Market strategy in changing business environment In a news report in the ‘Guardian’ on 3 December 2008, it was reported that UK’s top retailer, Tesco was really struggling against ‘Morrisons’ to maintain its position. While Tesco had registered its worst sales in 14 years during the Christmas, Morrisons had surged ahead towards the position of top retailer! The article was succinct in describing the cause and effects of the current recessive trend in the retail industry and the various ways through which they were trying to meet the challenges and attract customers to increase their sales. In yet another news item in the same issue, Christ Hirst had highlighted the ‘Christmas supermarket advertisements’. Hirst has revealed that the advertisements play a significant role in the boosting the sales figure and Morrisons’ ‘The campaign is about freshness and provenance, even including an illusion to the Hovis ad’ seems to have given a fresh lease of life to its sales figure (Guardian.co.uk). In the recent economic scenario, the organizations have focused on the strategy of ‘price cut’ that has drastically reduced the profit margin but has still not given any indication of guaranteed increase in sales. The organizations, therefore have adopted more innovative approach to their market strategy to motivate their customers. The success of Morrisons, during the festival season can be primarily contributed to its creative advertisements and aggressive marketing, backed by quality products at highly competitive prices. The store revamped its interiors and brought in celebrities. Tesco seems to have lost its market position temporarily because recently in September, it had introduced 350 new line products at low cost which had seen increased sales. But the reverse trend in the organic products and value line had prompted the overall sales figure to go down. Tesco’s strategy to give quality products at competitive price, while introducing low cost quality product through new lines is a visionary step that is designed to capture the interests of the customers. The online presence of Tesco gives a radical zing to Tesco’s marketing strategy as internet has become highly popular. Tesco’s market strategy is totally focused on the needs and requirements of the people and makese continuous efforts to update its products line with that of the changing public demands. This was reflected on its continuously changing website which became increasingly people-centric. The inherent belief of Tesco in its strategy is reflected in its innovative approach to introduce new lines in shampoo and curry sauce etc that has brought in fresh customers. Carly Harrington in an internet based newspaper1 has given a valuable insight into the McDonald’s market strategy in the current tough times. The article has talked about the expanded menu of McDonald that now includes latte, coffee, Mochas, frappucchinos and smoothies along with their burgers. The introduction of McCafes to meet the challenges of Starbuck, Barista can be clearly seen as the right attitude to meet the challenges in the deteriorating economic conditions. The diversification of product and services are indicative of flexible market strategies of the organizations to meet the challenges of the changing business environment. McDonald has proved that its brand has the ability to encompass new products and services to meet the demands of the people and at the same time, the diversification of the business in new area provides the organization with new opportunities to explore further business potential. In yet another news item in The Telegraph, Jonathan Sibun has reported that the dismal sales figure in the clothing retail outlet are hit hard by credit crunch and economic slowdown. Abercrombie & Fitch have even warned that ‘without a "notable improvement in the macroeconomic environment and a return of consumer confidence" it expected sales to continue to be weak in the vital pre-Christmas sales period’ (Sibun, October 2008). The clothing giants like Gap, A&F, Saks etc have introduced discounts but have lacked imaginative strategic inputs that could improve their business performance even in the recessive times. Conclusion In order for the company to follow a strategic growth plan, it is important that it understands and takes into account the vagaries of anticipated demands for the products by the factors that may or may not conform to market rules and regulations. The challenges of unarticulated elements like the presence of grey market and manipulated demand and supply chain by some vested interests, needs to be met by the innovative strategic methodology of marketing and sale of its mainstream products. Consumers are the mainstay of any business and therefore, efforts must be made to develop better understanding with customers with regard to consumer demands and correlate it with the product so that appropriate market strategy could be developed. In the present market scenario a more aggressive approach to market its goods and services need to be adopted to meet the challenges of the changing time. Emerging markets are crucial in the era of globalization and can be defined as the new area with high income and where the demand for the product can be created with relative success. Since marketing primarily deals into products and services that benefit people in some way or the other, people become the most important factor in the market strategies. A good marketer always tries to exploit the personal preferences of the persons to influence his behaviour as a consumer of goods and services that he wishes to sell. Hence, different market strategy is adopted for different group of people. The external factors become significant in evolving new strategies to meet the challenges of the emerging new dynamics of the business paradigms. The company needs to formulate marketing and communication strategy in a way that would not only uphold a high standard of corporate ethics but it must be able to ensure and exhibit understanding of the cross cultural values and demands of the people coming from different race, colour and culture. (1219) Reference Finch, Julia. (3 December 2008). ‘Mighty Tesco feels the bite of Hamster business’. Available from: [Accessed 11 January 2009]. Hirst, Christ. (3 December 2008).’Christmas supermarket campaigns: advertisements’. Available from: [Accessed 11 January 2009]. Harrington, Carly. (26 November 2008). ‘McDonald’s goes after slice of gourmet coffee market’. Available from: [Accessed 11 January 2009]. Sibun, Jonathan. (9 October 2008). ‘US Clothing Retailers are cut down a size’. Available from: [Accessed 11 January 2009]. Read More