Analysis of The Role of Strategic Selling in the Company Turnaround Process Article - Assignment Example

 The Role of Strategic Selling in the Company Turnaround Process Introduction Business is the backbone of the economy of a country. It is a complex task. Organizations need to develop right strategies at the right time and implement it at the right place in order to stay in the market. Many companies are coming and going in the business world because of the improper and untimely business strategies. World is changing rapidly and so is the business strategies. For example, globalization has brought many opportunities and challenges to the business world. Some people succeeded in exploiting the opportunities while others struggled to do so and forced to close down their operations. The role of marketing or selling for the business growth need not be mentioned again and again. Whatever the service or product offered to the customers by the organization must move well in the market and it is impossible to achieve such rapid movement of goods or service without the support from the marketing people. On the other hand marketing strategies are also undergoing drastic changes over the last few decades. Earlier, marketing people worked for the temporary gains and used all the possible tactics to exploit the customers by false claims and unbelievable and exaggerated facts about the products or service they sell. But now relationship building is accepted as the core of every business functions especially in marketing. Marketers have realized that prolonged relationships with the customers are beneficial for the organizations to achieve their long term goals. Thus marketing strategies are at present focussing more on building the relationships with the customers. This paper reviews the journal article The Role of Strategic Selling in the Company Turnaround Process written by Harker, Michael, Harker, Debra and published on Journal of Personal Selling & Sales Management, 08853134, Spring98, Vol. 18, Issue 2. An overview of the Company Turnaround Process Turnaround has been described as a two stage process; performance decline followed by performance improvement (Harker et al, 1998, p.2). Only the companies which are capable of accomplishing a turnaround will sustain in the market whereas those which failed to do so will force to close down. The turnaround process can be managed successfully if right strategies were taken at the appropriate time. The management of company turnaround is a daunting task when it is considered that the majority of turnaround attempts fail to produce a viable business (Harker et al, 1998, p.1). Company turnaround is a process of reverting the poor performances of a company. It is not necessary companies sustain their good performances for a longer period. Business always depends on so many internal and external factors of the company. Keeping all these factors in tact is a difficult task and at times it is beyond the control of the company. Business problems often reflect in the social and economic sector as people may lose their jobs and will struggle to find their livelihoods. Moreover, the economic growth of the country will also be affected because of decline in business. For example, the current recession came at an unexpected time and many business entities suffered major setbacks. Many people lost their jobs and many countries including United States suffered major setbacks. A turnaround from such setbacks is necessary not only for the organization, but for the people and the country as well. Company turnaround depends on many factors and strategic selling is one among them. The Role of Strategic Selling in the Company Turnaround Process Marketing is a management process and marketing oriented firms are more capable of sustained performance than one which is less focused (Harker et al, 1998, p.2). If the goods or services produced by the firms are not reaching the customers, the firm cannot survive in the market. Finished goods and services are meant for the customers and if it accumulates in the organization, the organization will not be able to find financial resources to sustain its operation. Whatever the money spent by the organization for making the goods should come back to the organization through selling of the finished goods. Selling of the goods can be accomplished only through proper marketing of the goods and hence marketing oriented firms may succeed more than other firms in sustaining their business. Review of The Research Approach Carefully selected companies from heavy engineering industry in Australia are utilized as the subjects in this study. Appropriateness has given more importance than orthodoxy in the collection of data in this study. Two years time period has taken for this study. Moreover this research focused on four case studies to arrive at conclusions. Data collection has been done through observations of companies, people, and processes; archival materials like industry studies, company annual reports, company brochures and newspapers, submissions for awards, flotation prospectuses and company records; and semi-structured, tape recorded, interviews (Harker et al, 1998, p.4). Review of the findings It has been suggested that the actions which need to be taken to improve the performance of an ailing business can be established by diagnosing the causes of decline (Harker et al, 1998, p.6). There are no standardized solutions for improving the performances of organizations as the reasons for their bad performances might be different for different organizations. Identification of the reason is the first step in the company turnaround process. In some cases, there may be more reasons; internal and external, for the bad performances of a company. Tackling of each reason with appropriate strategies will bring the organization back on track. The sales functions played a vital part in the turnaround process as they developed and implemented revenue generating strategies of"Market Management and Insulation." It includes environmental comprehension; market selection; innovative market offers; and managed relationships (Harker et al, 1998, p.6). Strategy is important in sales. The successful sales strategy implemented at one place may not be successful in another place even for the same product or service because of the social, cultural, political, environmental and economical differences. For example, Parker Pen Company has tried to standardize their marketing strategy across the world for selling their product, pen and failed miserably. Sales teams should learn from their experiences in order to implement tailor made strategies for each region in which they operate. For example, Tiger Woods might be a good brand ambassador in American conditions whereas he might be a failure in China. In China you need the services of personalities like Jackie Chan for the movement of products. Information collection and formulation of strategies based on the information collected are essential for success of a business. Competitor strategies, customer views etc can be collected from the environment only. Some entrepreneurs take all these environmental information seriously and they will excel in the market whereas some others put it in the dustbin and will fail in the market. Market selection is another important point in sales strategies. It is impossible to sell the expensive Ferrari or Benz cars in a country like Somalia or Ethiopia. On the other hand sales of such vehicles may be successful in Indian or Chinese conditions because of the better financial conditions in these markets. Innovative market offers is another sales strategy which can bring the company back in its growth phase. Some people are more interested in participating lucky draws whereas some others are more interested in getting a complement while purchasing something. Identification of these customer preferences is important while formulating sales strategies. Successful turnaround depended upon many factors, but a vital element in the process was the careful selection and development of new overseas markets which offered greater potential at a particular time (Harker et al, 1998, p.8). For example, India and China like Asian countries escaped from the current recession without many damages. So, for the time being, most of the overseas companies targeting India and China for their future growth prospects. Market selection and development seems to be the most critical sales strategy in a period like current recession. Overseas market development is not an easy task. The marketing team should take lot of pain in developing an overseas market. Overseas markets will always have different culture, socially, politically, linguistically and economically. Identification and selection of suitable strategies in accordance with these varying parameters is essential for the success of business in overseas countries. Meeting the customer needs is more important than meeting the challenges of the competitors. Too much focus on competitor strategies may prevent an organization from giving proper care to the customer needs. If the customers have strong beliefs in an organization’s abilities, no competitor can take change that. So it is important to give more importance to customers rather than competitors. “As management involved itself more with sales personnel and customers, turnaround companies became even more committed to understanding and solving customer problems” (Harker et al, 1998, p.10). Skillful selling is another strategy for company turnaround. Some sales guys may hurt the feelings of the customers because of their poor working conditions or something else and will lose the customers. The sales guys should think like the customers while managing the customers. In order to convince the customers, customer mindset should be recognized by the sales person. For example some customers may be more particular about the cheaper price while some others might be more particular about the quality of the product rather than cheaper price. If the sales person was able to read the customer correctly, he/she can adopt suitable strategies to convince the customer. Sales people in turnaround firms were given more latitude and support from senior management than hitherto, in developing and negotiating contracts. With mutually beneficial agreements the foundations had been laid for the development of sound customer-supplier relationships which are fundamental to the market management and insulation process (Harker et al, 1998, p.10). A combined effort from all the employees is essential for the turnaround process. So, senior managers will give more focus on sales while the company tries to turnaround. The increased support from senior managers will help the sales people to take quick decisions at the right time to establish strong relationships with the customers. Managed relationships with the customers are the fourth element of sales strategies at present. Commitment to overseas accounts, total customer support, accountability of individual sales people in the sales deals, individual account handling etc are some of the strategies for building relationships with the customers. Customers can make or break a business. Current organizations are more aware of the importance of customer relationships for the success of their business. Customers always value the services they receive from the organization. A customer who tasted some bad experience from a seller will never go back to that seller. On the other hand, better services will always attract the customer again and again to the same seller. Review of the limitations of the study The given research has focussed only a limited number of case studies to make conclusions. Moreover the research focussed only on some Australian companies and has not tried much to collect data from overseas organizations. So, the given research and its findings are more suitable to the Australian perspectives rather than a global perspective. The dangers of subjective errors are also more prominent in this research. The selection of the subjects especially a limited number of subjects may not help to make generalizations. “Retrospective bias and the distorted perceptions of respondents, or incomplete recording by the researcher can occur in researches like this” (Harker et al, 1998, p.11) Review of future research directions The limitations of this research mentioned in the above section can be corrected in future researches. Researches with the help of subjects from all over the world will give more reliability and global acceptance to the findings. Company turnaround is a global phenomenon. Why some companies were able to bounce back even after disaster performances while some others struggle or forced to close down, need to be investigated more in detail. The future research needs to focus more diverse industries to get proper data. It is necessary to investigate whether any industry preferences are there in the company turnarounds. In other words, some industries bounce back more easily while some other industries struggle to regain its status. This research focussed mainly on the role of sales team in the turnaround process. It is necessary to research the roe of other departments also in the company turnaround process. Review of the conclusions This research concludes that sales teams are the major entities in the company turnaround process. “When the companies were struggling to survive, the sales-force generated life saving revenues and cash” (Harker et al, 1998, p.12) It is acceptable, but at the same time all the departments should function together in a more dedicated manner for achieving the turnaround. The fluctuation in foreign exchange rates like market characteristics should never affect the turnaround process, the research concludes. It is better for an organization to reduce its dependency on fluctuating market parameters. If it is able to insulate its activities from the market fluctuations, the turnaround process would be easier. Customers should never see any barriers for buying the company products or services. Barrier less entry of the customers to the organization and the barrier less exit will help the organization in establishing meaningful and long lasting ties with the customers. Review of the managerial implications The sales people should be able to establish relationships with the customers, at the same time the CEO and all the other top managers should establish strong relationships with the sales people. Sales people should be aware of the strategies the organization is trying to implement in order to make their effort more meaningful. Absolute commitment and wholehearted efforts are necessary to the CEO from all the corners to lead the turnaround process in a successful manner. Even a single employee can spoil the entire turnaround process. Investments in overseas markets should be done judiciously. The selection of overseas market for investment is critical in determining the success and failures. Overseas markets may have lot of differences from the domestic market and hence the sales team and the employees assigned to the overseas market should be given proper training by the human resource department to make them capable of getting a clear picture about the overseas market. The sales team should have good communication and persuasive skills to convince the customers. Moreover the sales should have the knowledge about the consequences of their activities. Different types of skills are required for the sales team to succeed in their mission and for that purpose they need better training. In short, in order to achieve turnaround, and meet the needs of key stakeholders, strategic moves need to be made on a number of fronts; a process of continuous corporate improvement in response to market needs has to be effected. The sales teams in our study a key role in this process (Harker et al, 1998, p.13) References 1. Harker, Michael, Harker, Debra,(1998), The Role of Strategic Selling in the Company Turnaround Process, Journal of Personal Selling & Sales Management, 08853134, Spring 98, Vol. 18, Issue 2 Read More