Business Plnning to Cope with Turbulent Environment - Assignment Example

Mrketing Mngement [Nme of the School] [Nme of the Explin wht fctors need to be considered in the plnning process so sto 'cope with the turbulent business environment', nd why you think tht this is n essentil strting point in developing mrketing strtegy. In order to get the best out of opportunities presented by strtegic windows it requires systemtic pproch to plnning nd implementing mrketing strtegies. Menwhile, lot of fctors need to be considered to build up successful mrketing strtegy nd to cope with the turbulent business environment. This section of the pper discusses plnning process of the mrketing strtegy nd defines the fctors tht influence its efficiency. Plnning process is n initil stge of mrketing strtegy for ny orgniztion tht helps to shpe objectives nd gols of firm s well s to produce the principl policies nd plns for chieving those gols. During the plnning process it is normlly defined the nture of the business the orgniztion is to pursue which in turn hs gret bering on the kind of economic nd humn orgniztion it needs to possess. Gols nd objectives re usully set within time frmework. Strtegy entils mtching the compny's ctivities to its resource cpbility. There is little point in trying to tke dvntge of some new opportunity if the resources needed re not vilble or cnnot be mde vilble. n orgniztion must formulte strtegy during the plnning process of mrketing strtegy within the boundries of the resources tht re likely to be mde vilble. This is fundmentl considertion tht must be ddressed when formulting the pln. Strtegy is lso to do with the mtching of the ctivities of compny to the environment in which it opertes. Since the environment is continully chnging, strtegic decisions necessrily involve coping with chnge. The extent nd speed of environmentl chnge will vry nd the pce t which strtegy must chnge will necessrily vry too. s it ws lredy mentioned, there re lot of fctors tht need to be considered in the plnning process of n orgniztion tht ffect mrketing strtegy of the compny. These fctors re described in bellow nd re the reflection of stges of the plnning process of n orgniztion. 1. Initite nd gree Upon Strtegic Plnning Process This step is to ssure tht the key stkeholders understnd the plnning process nd re committed to it. Importnt persons nd groups re identified. The plnning process nd objectives re discussed with them nd their support nd commitment is sought. 2. Identify Orgniztionl Mndtes This is the identifiction of the legl nd politicl demnds which define wht the orgniztion must do. The explicit requirements of these mndtes re outlined s precisely s possible, nd clrifiction of gols nd ctions tht re not prohibited (the boundries of wht cn be ttempted) is initited. 3. Clrify Orgniztionl Mission nd Vlues This stge strives to clrify the purpose of the orgniztion. The possibilities which the orgniztion might undertke re filtered through the orgniztionl vlues to begin definition of wht it wnts to do nd wht it should do. comprehensive stkeholder nlysis is performed which expnds the work initited in step one. mission sttement, or the frmework for one, should be developed, nd this my be good plce to begin tht tsk. 4. ssess the Orgniztion's Externl nd Internl Environments The objective of this step is scnning opertion to identify strengths, weknesses, opportunities, nd threts (SWOT). This step (s well s plnning process generlly) grows from Open Systems Theory which sserts tht ll environmentl impcts, s well s ll internl forces, re interrelted nd hve potentil effect on ech other nd on the orgniztion. This step is the hert of the plnning process. It is firmly entwined with ll the other steps, nd is lmost synonymous with the plnning process concept. 5. Identify the Strtegic Issues Fcing the Orgniztion This identifiction emerges logiclly from the SWOT nlysis in concert with the mndtes, vlues, nd mission. "Strtegic issues re fundmentl policy questions or criticl chllenges tht ffect n orgniztion's mndtes, mission, nd vlues; product or service level nd mix; clients, users, or pyers; or cost, finncing, orgniztion, or mngement". (Bryson, 2002) Insights gined from the first four steps re pplied here to begin to fit the wht, when, where, why, who, nd how of orgniztionl purpose to the orgniztionl environment. These re the centrl policy questions nd mission demnds of the orgniztion. They re frmed s issues which the orgniztion cn ffect with specific notice of the fctors which mke them importnt to the orgniztion nd the nticipted consequences of ction nd inction (if there re no consequences, the issue is not strtegic). The objective is the focus of ttention on things tht re "... truly importnt for the survivl, prosperity, nd effectiveness of the orgniztion". (Bryson, 2005) 6. Formulte Strtegies to Mnge the Strtegic Issues " strtegy is defined s pttern of purposes, policies, progrms, ctions, decisions, or resource lloctions tht define wht n orgniztion is, wht it does, nd why it does it." (Bryson, 2005) This is n importnt nd detiled step t which lterntive ctions re considered which mture into strtegies to del with the strtegic issues identified t step five. Strtegies should be frmed by the mndtes, mission, nd SWOT fctors previously recognized s well s by fresh considertion of resources nd obstructions. 7. Review nd dopt the Strtegic Pln or Plns This is continution of step six. The focus here is stkeholder involvement directed towrd forml doption decision. This my simply be the conclusion of step six but, if key stkeholders hve not been closely involved in the preceding steps, review of ll tht hs occurred my be in order s collbortive prticiptive lerning mechnism. Sponsors or chmpions of the pln my be developed t this phse. This step concludes the plnning portion of the plnning process, step eight begins the mngement of the pln. It should be noted, however, tht the itertive lerning process continues nd, therefore, the pln is subject to modifiction or chnge when dditionl insights re chieved in the lter steps. 8. Estblish n Effective Orgniztionl Vision Orgniztionl vision is very importnt to the implementtion of plns. s much s the strtegies themselves, it is n objective of the strtegic plnning process. The vision frmes implementtion ction nd provides sense of both direction nd limit s the plns re consummted. It my be necessry to negotite vision mong the stkeholders but, when concluded, the vision will estblish picture of the key fetures of the orgniztion when the strtegies re implemented nd will delinete the chnnels of desired/permissible implementtion ctions. The detils of the vision will likely hve become cler to those closely involved in steps one through seven. It is importnt, therefore, tht those detils be cptured in vision nd trnsmitted s guidnce nd motivtion to those who must now implement the strtegy. In short, vision is mechnism which furnishes flexibility nd dptbility to pln. It imprts understnding of purpose nd philosophy to those who must effect the pln nd thereby voids the necessity for their unyielding dherence to the letter of pln. It llows the freedom to implement conception in flexible mnner while ssuring tht the order nd purpose of the pln re mintined. Vision should cpture mission, gols, philosophy, vlues, strtegy, rules, stndrds, nd criteri of success. This is not n esy tsk, but the ssignment is fcilitted by the collbortive, itertive, nd nlyticl steps tht comprise plnning process. 9. Estblish n Effective Implementtion Process This is the stge where the ction detils re formulted which provide chievement potentil to the strtegic vision. Objectives, milestones, schedules, structures, processes, procedures, roles, responsibilities, nd resources re identified nd defined now. Unforeseen problems often rise here nd emergent strtegy my simply spring forth from unforeseen spects of the circumstnces. The detils of implementtion, including the synthesis of emergent strtegy, is bounded nd guided by the orgniztionl vision. These problems nd emergent strtegies must be considered through the lens of ll tht ws lerned in the previous steps nd ll tht is new or different bout the strtegies nd the implementtion must be bsorbed by those involved. Indeed, lerning is predominnt theme underlying successful implementtion s well s strtegy nd pln development. 10. Ressess Strtegies nd Plns Things chnge nd mistkes re sometimes recognized lte. constnt nd continuous reevlution of strtegy nd implementtion must, therefore, occur. The implementtion pln must include feedbck mechnisms which provide effectiveness ssessment nd llow the orgniztion to be responsive. The dt provided by these feedbck mechnisms will be nlyzed, evluted, nd ssimilted by itertive segments of ll tht hs proceeded. Plnning wht is likely to hppen in ech business sector in the immedite nd longer-term future is importnt. The orgniztion must mke predictions tht tke into ccount fctors which re externl to the firm such s mrket trends, economic trends, competitive trends, socio-culturl trends nd technologicl trends. The implictions of these trends re then compred with the likely performnce of the compny bsed on internl fctors such s product strengths, mteril costs, technicl bility, productivity prospects nd finncil cpcity. The next step is to project ernings from existing business over the time-scle of the forecsts nd to mke comprisons with the required objectives. For exmple, mnufcturer of wristwtch btteries would recognize tht technology nd the mrket demnd for cells with longer life re likely to hve n impct on future product requirements. The next step is for the firm to exmine its current position. It would see tht if it crried on producing the current cpcity of bttery, using existing technology, it would strt losing sles some time in the foreseeble future s competitors introduce lrger cpcity cells or n lterntive technology. It hs to predict when the chnges re likely to occur nd wht impcts these will hve on its sles nd profitbility. Fctors rising from such things s the technology nd product life cycles often indicte the presence of potentil profit gp. Tht is gp between wht the firm wnts to chieve in terms of profit nd wht it is likely to chieve on the bsis of its existing portfolio of ctivities. firm hs to relte the expected profit to the mount of resources employed to chieve tht profit. The mesure it needs to consider is the return on investment generted by new ctions it my tke. Return on investment for individul products cn be linked to the overll rte of return on cpitl employed erned by the business. Performnce of the firm in the ltter respect is reflected in the generl confidence of other firms nd finncil institutions in deling with the firm in the mrket plce nd in the firm's bility to ttrct nd retin shreholders' investments. Firms strive to mintin their existing rte of return on invested cpitl. In pursuit of such n objective they should only ccept new projects which promise return on investment potentil which is t lest equl to the current rte of return on cpitl employed. Of course, even then, s its more profitble offerings strt to decline, it still my not ctully mintin the existing rte of return on invested cpitl. Figure 14.1 Clssicl gp nlysis In prctice, of course, firms hve to ccept the best vilble projects. These my generte below the required rte of return with n inevitble negtive impct on medium/longer-term profitbility. (b) Discuss the link or reltionship between opertionl mrketing strtegy, nd the level or extent of mrket orienttion of n orgniztion. For more thn three decdes, scholrs in mrketing hve emphsised tht mrket-oriented orgnistion will benefit from superior mrket performnce by mens of relying on the qulittive opertionl mrketing strtegy (Kotler 2004; Levitt 1990; Nrver & Slter 2000). In fct, the subject of mrket orienttion (MO) hs become so chrismtic, tht recently the Mrketing Science Institute designted MO s high priority re for reserch (Crvens, Greenley, Piercy & Slter 2005). lthough only few compnies re fully mrket-driven, mngers re beginning to see MO s pivotl fctor in securing nd mintining mrket ledership. The spotlight is on MO s opposed to sles orienttion, with the objective being to secure long-term profitbility, s opposed to short-term gin. Crvens et l. (2005) ttribute the success of orgnistions such s Virgin to the compny's focus on being mrket-oriented nd mking the mrketing strtegy mrket-oriented s well. Virgin recognises the vlue of dpting its structures, roles nd processes to the chnging mrket requirements. Similrly, senior mngement in Dell Computers is dedicted to engendering n integrted culture nd developing processes tht fcilitte MO. While exmples of orgnistions tht fil to identify nd respond to their customers bound, Crvens et l. (2005) rgue tht being mrket-oriented cretes n environment for listening, understnding nd responding to the mrket nd the competition. It is in this mnner tht customer stisfction is mnged nd strong competitive brriers re built. The cdemic study of MO hs focussed primrily on the consequences of being mrket-oriented. Wht is noteworthy, however, is tht reltively little systemtic effort hs been devoted to understnding the methods by which MO could be developed (Hrris & Piercy 2005). In fct, Nrver nd Slter (2005) nd Jworski nd Kohli (2003) emphsised the need to tp into the drivers' of MO. It ws the Jworski nd Kohli (2003) study tht initilly exmined the ntecedents of MO. If MO plys pivotl role in the chievement of superior business performnce then wht re the fctors tht drive or hinder mrket-oriented ctivity Without proper dignosis of these specific forces, mngers cnnot choose the best methods with which to enhnce their current position. The identifiction of these fctors is of criticl importnce to top mngement seeking to initite orgnistionl chnge processes directed t building MO. Nrver nd Slter (2000, p. 21) define mrket orienttion s the "orgniztion culture tht most effectively cretes the necessry behviors for the cretion of superior vlue for buyers nd, thus, superior performnce for the business." This definition implies tht the firm needs to understnd buyer needs nd competitive cpbilities nd weknesses, nd it needs to perform ctivities gered to chieving superior customer stisfction. In mny respects there re strong prllels with the mrketing concept' (Levitt 1990). Nowdys this concept is ccepted s conventionl wisdom in mngement thinking, lthough strtegiclly inept orgnistions re still to be found in prctice--suggesting tht the messge hs to be retold to ech new genertion. Mrket orienttion shres the sme emphsis on customers nd mrkets--it lso hs some of the sme rhetoricl ppel. Tht sid, its dvoctes would correctly point out tht it is more brodly defined nd more precisely mesured. Perhps, too, they sw tht if the mrketing concept ws to remin relevnt in the 21st century, it needed to be refreshed nd reinvigorted. The literture on MO hs generted two prllel views of the MO construct. Firstly, Nrver nd Slter (2000) dvocte tht MO is comprised of three behviourl components--customer orienttion, competitor orienttion, interfunctionl coordintion--nd two decision criteri--long-term focus nd profitbility. They contend tht the three behviourl components re of equl importnce. Recent work by Oczkowski nd Frrell (2005) suggests tht there hs been some criticism of the Nrver nd Slter (2000) scle. Whilst Siguw nd Dimntopolous (2004) question the vercity of the scle itself, Kohli, Jworski & Kumr (2000) contend tht the scle plces gret emphsis on the role of customers nd competition, yet, fils to consider dditionl fctors which drive customer needs nd expecttions. The second view developed by Kohli nd Jworski (2000), sought to exmine the interest in MO by providing n opertionl definition nd clrifying its domin. They defined MO s involving the genertion, dissemintion nd responsiveness to informtion concerning customers nd/or competitors. Pelhm (2003) nd Oczkowski nd Frrell (2005) question the theoreticl underpinnings of this scle nd comment on its relibility nd vlidity s true mesure of MO. Results of study by Frrell nd Oczkowski (2005) show tht the Nrver nd Slter (2000) mesure of MO outperforms the MRKOR scle of Jworski nd Kohli (2003) in reltion to criterion vlidity, relibility nd uni-dimensionlity. The reltive merits of these pproches nd the degree of overlp between them re subject to debte. However, their vlue is tht they define MO in terms of the specific ctivities tht orgnistions should undertke. Whilst much of the literture hs focussed on the consequences of MO nd the ssessment of the scles for mesuring it, some work hs exmined its ntecedents. If MO contributes to superior business performnce, then wht internl fctors cuse some firms to go down tht route while others do not The identifiction of the principl mngement behviours involved is vitl to orgnistions tht seek to become mrket-oriented. The erly work of Jworski nd Kohli (1993) identified distinct orgnistionl cpbilities tht were chrcteristic of mrket-oriented businesses. Their work gve well-deserved ttention to the vrious orgnistionl chnge efforts directed t building mrket-oriented orgnistions (Dy 1994). However, the drivers of this process remin understudied nd there is still much work to be done in this re. Mny uthors relted high level of mrket orienttion to the opertionl mrketing strtegy. Kohli nd Jworski described mrket orienttion s set of behviours nd ctivities in n orgniztion reflected in its mrketing strtegy nd more effective s the higher dependency it hs upon the mrketing strtegy. Specificlly, the orgnistion-wide genertion of mrket intelligence pertining to current nd future customer needs, dissemintion of the intelligence cross deprtments, nd orgnistion-wide responsiveness to it' (Kohli & Jworski 2000, pp. 6). They brought these elements together in the MRKOR scle. In their lterntive opertionl definition, Nrver nd Slter sw mrket orienttion s comprising three behviourl components: customer orienttion, competitor orienttion, nd inter-functionl coordintion. Furthermore, they rgued it is orgnistionl culture tht effectively nd efficiently cretes behviours' (Nrver & Slter 2000, pp. 21), thereby lifting discussions of mrket orienttion to more strtegic level. These ides were reflected in the MKTOR scle. Closely relted to both these definitions is the ide of orgnistions being mrket-driven'. n orgnistion is described s being mrket-driven if it pursues customer-vlue-centred strtegy, supported by mrket orienttion (Deshpnde, Frley & Webster 1993; Dy 1999). With these definition in mind, severl ttempts were mde during the 1990s to demonstrte tht mrket-oriented business units were better ble to respond to informtion bout mrket forces nd mrket conditions thn less mrket-oriented rivls. However, being mrket-oriented is not esily ttined. From n pplied perspective, Dy (1999) hs drwn ttention to number of trps for the unwry, including being oblivious to the mrket, being compelled by the mrket, nd seeing your business s superior to the mrket. s he sees it, the successful route is to steer middle pth--not being lulled by pst successes into complcency bout the mrket, but lso voiding being so nxious s to become customer compelled. Conclusion Mrketing plnning is therefore the process tht mplifies nd enhnces: systemtic informtion gthering, clrifiction of orgniztionl direction, estblishment of priorities, qulity decision mking, communiction nd understnding of strtegic intent, solid orgniztionl responsiveness, effective performnce, conscientious temwork, useful ppliction of expertise, nd ttention to orgniztionl lerning. ll this will optimize the "fit" of the orgniztion to its environment. These elements enhnce the development of strtegic thought nd ction which is "... the most importnt thing bout plnning process..." (Shoebridge, 1998) In short, plnning process provides process for the nlysis of the orgniztion nd its environment. This process is clculted to fcilitte the study of the orgniztion nd the environment in mnner which ssists in determining how nd where ech compliments or confronts the other. It is systemtic wy of ttempting to "fit" the orgniztion to the environment-to strtegiclly position the orgniztion so s to cpitlize on the insights lerned in completing the process. long the wy, it mximizes the prticiption, involvement, understnding, nd cceptnce of the members of the orgniztion--hence, orgniztionl lerning. Bibliogrphy: 1. Bryson, J. Strtegic Plnning for Public nd Non-Profit Orgniztions; Jossey-Bss: Sn Frncisco, 1995; 30, referring to nsoff, I. Strtegic Issue Mngement. Strtegic Mngement Journl 2002, 1 (2). 2. Bryson, J. Strtegic Plnning for Public nd Non-Profit Orgniztions; Jossey-Bss: Sn Frncisco, 2005; 32. 3. Crvens, D., Greenley, G., Piercy, N.F. & Slter, S.F. 2005, Mpping the pth to mrket ledership', Mrketing Mngement, vol. 7, no. 3, p. 29. 4. Dy, G.S. 1994, The cpbilities of mrket-driven orgniztions', Journl of Mrketing, vol. 58, October, pp. 37-52. 5. Deshpnde, R., Frley, J.U. & Webster, F.E Jr. 1993, Corporte culture, customer orienttion nd innovtiveness in Jpnese firms: qudrd nlysis', Journl of Mrketing, vol. 57, pp. 23-37. 6. Hrris, L.C. & Piercy, N.F. 2005, Identifying the brriers to mrket orienttion: British retil compnies', in Developments in Mrketing Science, eds. Ford & Honeycutt, vol. XXI. 7. Jworski, B.J. & Kohli, .K. 2003, Mrket orienttion: ntecedents nd consequences', Journl of Mrketing, vol. 57, July, pp. 53-70. 8. Kohli, . & Jworski, B. 2000. Mrket orienttion: The construct, reserch propositions nd mngeril implictions', Journl of Mrketing, vol. 54, pril, pp. 1-18. 9. Kotler, P. 2004, Mrketing Mngement: nlysis, Plnning nd Control, Prentice-Hll, Englewood Cliffs, NJ. 10. Levitt, T. 1990, Mrketing myopi', Hrvrd Business Review, vol. 38, July-ugust, pp. 24-47. 11. Nrver, J.C. & Slter, S.F. 2000, The effect of mrket orienttion on business profitbility', Journl of Mrketing, vol. 54, no 4, pp. 20-35. 12. Oczkowski, E. & Frrell, M.. 2005, n exmintion of the form of mrket orienttion in ustrlin compnies', ustrlsin Mrketing Journl, vol. 6, no. 2, pp. 3-12. 13. Oczkowski, E. & Frrell, M.. 2005, n exmintion of the form of mrket orienttion in ustrlin compnies', ustrlsin Mrketing Journl, vol. 6, no. 2, pp. 3-12. 14. Pelhm, .M. 2003, Mediting nd moderting influences on the reltionship between mrket orienttion nd performnce', Doctorl Disserttion, Pennsylvni Stte University. 15. Ruekert, R. & Wlker, O.C. 1987, Mrketing's interction with other functionl units: conceptul frmework nd empiricl evidence', Journl of Mrketing, vol. 51, Jnury, pp. 1-19. 16. Ruekert, R. 1992, Developing mrket orienttion: n orgniztionl strtegy perspective', Interntionl Journl of Mrketing, vol. 9, pp. 225-45. 17. Sndilnds, B. 1998, irline refit mrks nother beginning', Business Review Weekly, 18 My, p. 81. 18. Shoebridge, N. 1998, Coles Myer chses new sles nd know how,' Business Review Weekly, 23 November, p. 96. 19. Shoebridge, N. 1998, The comebck of the decde 1998 BRW/lctel business chievement wrds 10th nniversry', Business Review Weekly, 7 December, p. 76. 20. Siguw, J.. & Dimntopoulos, . 2004, The mrket orienttion mesure: re-exmintion of Nrver nd Slter's scle', in Proceedings of the mericn Mrketing ssocition Winter Eductor's Conference: Mrketing Theory nd pplictions, eds C.W. Prk & D. Smith, vol. 5, mericn Mrketing ssocition, Chicgo, 150-51. Read More