Strategy Marketing and Strategic Plans - Assignment Example

Strategic Marketing Question One: (a) The success of a company is determined by the strategic plans that individual businesses embrace. As a matter of fact, companies that employ creative and innovative approaches over the traditional planning perform considerably better in the present markets. Google Inc. for example has developed over the last few years surpassing existing companies and consequently controlling markets. This fete is attributable to not only innovation but also on a number of factors. Arguably the most notable shift from traditional approaches, Google develops its products with the consumer in mind and not considering the commercial impact of the product. Google’s aim is to ensure that information seekers access what they need. Whereas this approach contradicts the traditional business ethos, its main advantage is that new products are available to the user and the company rakes in more advertisement revenue (Ferrell, Fraedrich and Ferrell 2011, p.91). Scholars agree that before formulating strategies; a company ought to consider the business environment and the impact of the plan on the vision and the objectives of the company. This enables the business to build a sustainable competitive advantage. Google is the major search engine that most surfers prefer, apart from this, the company is aware that developing other products around the search engine adds more clientele and expands the advertisement space. The company overcomes the weakness of this approach by including more products namely: Google maps, scholar and mail. Unlike its competitors, Google exploits not only the internal organizational structures and resources but also ensures it is ahead in innovation and retains consumer confidence. Lamb, Hair and McDaniel (2012, p.41) observe that sustainable competitive advantage enables companies serve a given market segment and in the process the company curves a niche. In its first initial public offering (IPO), Google’s shares traded at a paltry $84; however, after one year, the company’s shares traded at $400. This is an indication of market leadership strategy. In addition to this, the company has acquired and partnered with different companies in a bid to raise its market strength. In this essence, the company has a sound market leadership strategy that ensures that it leads in innovation, integrate cutting edge technology and customer satisfaction is guaranteed. To be steadfast in innovation, the company has equally introduced revolutionary online search products and as well influenced evolutionary trends in the market. Google allows its employees to create new products and have their free time to develop. Ultimately, the creativity of each employee is integrated into the company’s existing products. This is advantageous to the company in that the employees are motivated and are consequently effective and efficient. In making marketing decisions, the company has adopted consumer questioning in order to have the clients’ views considered and any disputes or product inferiority alleviated before product launch. In this respect, the company is arguably considering the market trends and the demands in a dynamic business environment. It is equally important to note that through strategic positioning of its products, the company has achieved greater heights of success. According to Njuguna (2009, p 33), organizational learning processes are key to a company’s development. Considering Google, the company has employed dynamic processes that integrate knowledge with creation and acquisition of ideas in order to increase their resources. Question One: (b) Commercializing new ideas and strategies requires an in-depth analysis of the market reception and the factors that influence product performance in a market. In entrepreneurship, there are a number of financial metrics and analytical tools employed in evaluation of the effectiveness of a business activity. These financial metrics include the net present value, internal rates of return, and earnings per share among others. The choice of a metric or analytical scale used depends on certain factors. The most commonly used analytical tools are the financial ratios. On the contrary, Sheeba (2009, p.124) observes that since ratios are calculated basing on data taken from financial books, they are inappropriate in advising companies on ideas to commercialize. For example, the ratios are affected by price changes. It should be noted that price changes are inevitable and do not influence product launch. Apart from this, it is a fact that the ratios are only valid if they are compared with standard sets. Whereas the standards are available, the procedure is prone to errors and is tiresome. With these in mind, it is important for marketing teams to embrace other analytical tools. Unlike the financial statement metrics that explore the relationship in different ratios, cash flow metrics evaluate the cash inflows on every business activity namely investment and earnings. On the other hand, the earnings are not calculated basing on the earnings on each share. Cost benefit analysis is ideal in the case of Google’s intended idea commercialization. It is notable that the main questions that should be answered revolve around the cost of commercialization and the expected returns. With this in mind, it is paramount that the company performs a cost-benefit analysis on the intended product launch. Given the fact that the company will invest money in order to commercialize the idea, the first calculation is to evaluate the total cost of commercializing the idea and determining the ratio as compared to expected benefits. It should be noted that the ratio obtained after computing the cost of benefit analysis gives the indications of a viable investment. Rao, Gupta and Upadhyaya. (2007, p.96) posit that a CMA ratio which is greater than one is a viable investment. The rate of return on investment (ROI) computes gives a ratio on the net investment benefits. In this calculation, the result of total benefits less the total cost of investment gives the ratio against the total cost. Whereas the CMA and ROI are essential in establishing the viability of an investment, the two methods do not consider time and the investment size as factors. This is categorically of importance to Google because commercialization of ideas will target a considerably large clientele. The net present value (NPV), and the Internal Rate of Returns (IRR) is arguably the most recommended for Google. From Google’s profile, time is a vital factor in determining the viability of its investments. Rao et al (2007, p.98) observe that both the IRR and the NPV lay emphasis on time as a determinant in every business investment. The NPV gives the present net worth of an investment and is often expressed as per the day’s dollar value. The internal rate of returns gives the daily returns on an investment. The two methods are advisable because they are capable of giving long term predictions as compared to the other ratios. Although the two methods are accurate and give more representative figures, the NPV and the IRR have their weaknesses. To begin with, the two methods of appraisal assume that the interest rate is often constant and does not vary with changing business environments. In addition to this, the internal rate of returns (IRR) and NPV are inappropriate in evaluating mutually exclusive investments. The two methods are inadequate in determining the viability of investments that have a positive cash flow. The two methods are inadequate in determining the viability of investments that have a positive cash flow. Smith (2002, p 172) writes that the present value method is in accurate when time is considered. In his argument, he asserts that with the extension of the time of financial analysis increasing into the future, the results obtained are comparatively inaccurate. Question 2: Report This report is based on the critical analysis of the possible reasons for the pitiable performance of Glens Engineering Company in the past few years. From the analysis, it is notable that the root causes of the company’s failure to break even in the market are related to inadequate strategic planning and low employee motivation. Although the company has a team of brainy and innovative employees, the company is yet to become a market leader. To reverse this trend, the company has to adopt market leaders’ strategies and effectively reorganise the critical decision making organs within the organization. This should be based on the following recommendations. 1. Identify and exploit the competitive advantage: According to Blythe (2005, p 347), companies should analyze the competitors and the market structure in order to capitalize on a specific market segment and products. This should enable focus on the major strengths of the company and influence efficiency and affectivity of employees. 2. Redefine the leadership style and employee responsibilities: Market leaders have unique leadership and management styles. Given the number and the level of education that the employees posses, it is a fact that the company should be the most productive and efficient in its operations. However, this is not true of the company. The leader should inform and encourage open dialogue and embrace consultation in decision making. This will not only improve the relationship between employees and management but also allow employees to explore their creative abilities and further realize the vision and objectives of the company. It should be noted that in this company, the main producers are the scientists; the company should consider making it easier for the employees to express their ideas. It is advisable that the scientists and the engineers be given a chance to steer the company to greater heights without feeling embarrassed or curtailed by the administration. Blythe (2005, p.350) posits that market challengers often show certain characteristics. In his argument, the market challenger has three possible strategies to consider. To begin with, such companies should adopt a direct attack on the market. This will entail a head on aggressive attack on the market leaders. Secondly, the company should employ the backdoor approach by improving innovation and fight to increase the market share. This should be steered by results oriented leadership style and innovation strategies that not only seek to satisfy the consumer demands but also create products that can open doors for new markets. Blythe (2008, p 351) affirms that market challengers have two options to choose from. Either to attack the leader or market followers in order to increase their market share. Reference list Blythe, J. (2005). Principles and practice of marketing. London, Thomson Learning. Farrell, O. C., Fraedrich, J., and Ferrell, L. (2011). Business ethics: ethical decision making and cases. Mason, OH, South-Western Cengage Learning. Hoffman, N, P. (2000). An Examination of the "Sustainable Competitive Advantage" Concept: Past, Present, and Future. The University of Alabama. Lamb, C. W., Hair, J. F., and McDaniel, C. D. (2012). Essentials of marketing. Mason, Ohio, South-Western Cengage Learning. Njuguna, J, I. (2009) Strategic Positioning For Sustainable Competitive Advantage: An Organizational Learning Approach. Jomo Kenyatta University of Agriculture and Technology. Poirie, C, C. (1999). Advanced Supply Chain Management: How to Build a Sustained Competitive Advantage. Berrett-Koehler Publishers. Rao, H. R., Gupta, M., and Upadhyaya, S. (2007). Managing information assurance in financial services. Hershey, IGI Publishers. Sheeba, K. (2008).Financial Management. Pearson Education India. Snyder, N. (2010).Vision, Values, and Courage: Leadership for Quality Management. Simon and Schuster Publishers. Read More