StudentShare
Contact Us
Sign In / Sign Up for FREE
Search
Go to advanced search...
Free

Why are firms differentially effective and what this means in terms of efficiency - Essay Example

Comments (0) Cite this document
Summary
Even though all strategic and tactical decisions of firms are based on concrete projections, historical data, budgeting and costing, yet the effectiveness of the same measures may be different. In other words, apart from numbers and sound business logic, "External Factors" play a role in determining the rate of success.
Download full paperFile format: .doc, available for editing
GRAB THE BEST PAPER98.9% of users find it useful
Why are firms differentially effective and what this means in terms of efficiency
Read TextPreview

Extract of sample "Why are firms differentially effective and what this means in terms of efficiency"

Q1. Why are firms differentially effective and what this means in terms of efficiency Even though all strategic and tactical decisions of firms are based on concrete projections, historical data, budgeting and costing, yet the effectiveness of the same measures may be different. In other words, apart from numbers and sound business logic, "External Factors" play a role in determining the rate of success.
Some of these factors are:
1. Political changes: This applies to countries with a dynamic and volatile political scenario and in countries where policies of one leader are different from policies of another leader. A good example would be a country like Pakistan where investment inductive policies are being followed for example removal of import duty on vehicles. However, if next year, the government decides to implement duties again, the manufacturers exporting their vehicles to Pakistan will suffer and undoubtedly all the marketing efforts of the manufacturers would be less effective as compared to previous years.
2. Consumer preferences: Consumer Behavior is a variable prone to changes anytime, which is why the saying has it "change is the only constant". A good example would be from the Fast Moving Consumer Goods Market (FMCG's) which generally tend to be low involvement goods and the prices are a smaller percentage of consumer spending power. A marketing campaign for "SOFT-goat milk whitening soap" might have been effective in the early nineties but would not be effective in year 2008 when the awareness about animal testing is high and public opinion is against products of companies that use animal testing. An old marketing campaign in such circumstances would fail.
3. Industry Dynamics: This refers to the industry in itself and the changing relationships with the various stakeholders for example distributors, suppliers, investors and competitors. For example Unilever is the market leader in beauty Soaps category has maintained its leadership in market for over ten years. The tendency of Unilever would be to provide lesser margins to its retailers and distributors. Supposedly a Chinese beauty Soap manufacturer enters the market with a comparatively low soap price and double the retailer margin, the distributor and retailer in this case would push the Chinese soap in the market. Thus, availability of Chinese soap would increase as compared to availability of Unilever soap and thus the Above the Line (ATL) efforts of Unilever may fail. In such case, only a focus on (Below The Line)BTL activities will be successful with a careful analysis of value chain and relationship building exercises with distributors and retailers.
Impact of Differential Effectiveness of Firms on Efficiency
The market demand basically refers to historical demand for e.g. if demand for soaps in July2006 was 1000 bars, in 2007 it rose to 2000 bars we would estimate the demand for soaps in July 2008 to be 3000 bars. However, if due to external factors, the demand suddenly drops or rises, the demand estimation would fail and would lead to operational inefficiencies. For example, if the demand drops, the company would be overstocked and if suddenly demand rises the company would be short of stock. Thus, inefficiencies would exist due to presence of external factors. In this regard, proper inventory management has to be carried out with contingency planning and maintenance of buffer stock should be given priority.
Q2.Marketing Mix: 4 P's
The four P's of marketing are: Product, Price, Place and Promotion.
I would like to base my discussion on the following:-
1. All products are different in nature thus same marketing strategy can not apply to all of them
2. Consumers of different products have different tastes thus the same approach can not be applied to appeal to them.
3. Income Groups are different leading to different availability of target markets.
4. Marketing budget is limited but options are unlimited thus we have to tradeoff one option for the other , a concept that forms the media plan
Trading Things Out:
A good example would be a comparison of Foton Buses with Unilever. Both are companies having high marketing budgets but their strategies would be completely different for the reason that their products are very different in nature, the price structure is different, and their target segments are different and for this purpose the marketing plan would be different. Unilever would target at young girls and working women meanwhile Foton buses would target just the CNG and automobile sector. A major chunk (80%) of Unilever budget goes on above the line (ATL) activities like television spots, print advertising in magazines and Radio Spots. However, with the rising popularity of BTL activities including Hoarding, Billboards and Business-consumer exhibitions, Unilever has started dedicating 20% budget to these activities. Due to this lets suppose Unilever chooses to organize International Film fare Awards, it will start curtailing its ATL activities in order to allocate a larger proportion of budget to the awards which is an expensive brand building exercise. This would be a good example of trading one option for another.
On the other hand, Foton buses are capital goods requiring very targeted advertising .Thus 80% of their budget will go to Business to Business exhibitions and selective advertising in special interest journals.
Mixing things together to form an offer:
A good example would be Unilever offering 20% extra soap at the same price of the new product variation, a new soap with "Beauty Crystals "in it. In this offer, Unilever is spending heavily on its product packaging, the product itself and is providing a price advantage to consumers. Thus, it would compromise on certain ATL activities for example it would cut it's spend on magazines and focus entirely on television advertising to reinforce its offer. This would be a good example of using different percentages of the marketing mix elements i.e. product, price, place and promotion. Read More
Cite this document
  • APA
  • MLA
  • CHICAGO
(“Why are firms differentially effective and what this means in terms of Essay”, n.d.)
Why are firms differentially effective and what this means in terms of Essay. Retrieved from https://studentshare.org/miscellaneous/1504254-why-are-firms-differentially-effective-and-what-this-means-in-terms-of-efficiency
(Why Are Firms Differentially Effective and What This Means in Terms of Essay)
Why Are Firms Differentially Effective and What This Means in Terms of Essay. https://studentshare.org/miscellaneous/1504254-why-are-firms-differentially-effective-and-what-this-means-in-terms-of-efficiency.
“Why Are Firms Differentially Effective and What This Means in Terms of Essay”, n.d. https://studentshare.org/miscellaneous/1504254-why-are-firms-differentially-effective-and-what-this-means-in-terms-of-efficiency.
  • Cited: 0 times
Comments (0)
Click to create a comment or rate a document

CHECK THESE SAMPLES OF Why are firms differentially effective and what this means in terms of efficiency

Large Firms and Small Firms

...?Large Firms and Small Firms Introduction The firms are ified into small, medium, and large firms according to the nature and size of the business conducted by them. Each level of the firms is defined differently in different countries taking the rules and regulations into account. Polly Roberts writes on differentiating the firms noting that larger and smaller firms differ in their internal factor prices. He says, “Larger firms pay less for capital and more for labor; smaller firms pay more for capital and less for labor” ( Roberts, n.d.). However, there are numerous definitions for the firms among various economists; and researchers are still on their efforts to study more on the competitive factors between large firms and small firms...
6 Pages(1500 words)Term Paper

Team-Working Is the Most Effective Means of Organising People

... to organize their people in the most effective manner. The team dynamics determine how the communication process takes place. Communicating in teams and organization is one of the critical success factors in building high-performance teams, defined as those teams which are characterized by superior performance management systems. Because the performance in these teams is measured continuously, the organization can continue to deliver superior business results in an ever-changing external environment. For this reason, team-working is an effective means of organizing people according to the prescribed deliverables. Because of the continuous process of change occurring in the external business environment, an organization cannot afford...
6 Pages(1500 words)Essay

Most effective means of disciplining a child

... the proverbial baby out with the bath water' and stop spanking because some parents rely on it to abuse children. However, spanking must be painful enough to be effective as the child must see the need to avoid them by not indulging in misbehaviors. As the famous idiom goes, 'Spare the rod and spoil the child', parents must punish their children when they do wrong things, so that they can differentiate between good and bad behavior. Punishing a child will make the child to differentiate right from wrong and learn right conduct and good manners. Therefore, spanking may be the most effective means of disciplining children as it addresses long-term objectives of child development as well as encouraging parent-child relationship. Time...
3 Pages(750 words)Essay

Economic Efficiency

... are however best analysed with R&D problems and variations. The economic efficiency of resources could be examined in terms of consumption as more one person consumes, the less resources are available to other people for consumption but this would be applicable to phenotypes of private goods. In case of genotypes or public goods, one person's consumption may not affect the amount available to others. However both genotypes or phenotypes can give consumption access to some individuals and exclude others. This according to Sedjo is applicable to property rights in case of improved varieties of plants and animals. So, how a sustainable environment and economic efficiency could be derived from wild plants and animals or genetic resources...
7 Pages(1750 words)Essay

The Means for Effective Interpersonal Communication between Couples

Most of the time, we tend to look at the faults and weaknesses of others while making quick judgments or conclusions at the same time. This usually is the first action since it is part of our innate instinct to be on the defensive, both physically and psychologically. Knowing this, you are already aware that taking your own side first in any argument is an instinctive reaction. Of course, that kind of action does not really deal with the problem initially. The first step in having an effective and happy interpersonal communication as a couple is to first look into your own self. This requires serious introspection and a degree of private time away from each other.
Introspection requires a long and deep look into one’s own pers...
5 Pages(1250 words)Essay

What It Means To Be An Effective Digital Citizen

... a better alternative is found. One of the best things that have ever been discovered by man apart from fire is electricity and the computer. The potential and use of these discoveries are wide, diverse and can never be overestimated. However, like any other invention it has the capability of harming humanity and the natural order of things. Digital is the general word to describe computers and their various applications. Digitalization has led to the discovery and boom of a number of devices such as mobile phones, smartphones, laptops, desktops, microchips and other numerous gadgets in the digital world. However, just like any other invention, the digital inventions can be used for various mean and malicious purposes. The Term digital...
4 Pages(1000 words)Assignment

Terms

...Philosophy, Ethics, Management, and Law Affiliation The terms used in management ethics and law have been confusing to many students. They need proper definition in so as to understand. It will help the student in understanding the course itself and conceptualizing what the course involves; Allegation – It is an accusation from one person to another in elaboration why the accuser thinks the one party is guilty of breaching the law. An employee may allege that one of his colleagues sent an offensive email to the management. It can either be a true allegation or false. It should be investigated to find facts before passing judgment. For example Cool Sweats can refute the allegation by showing that George violated the company rules...
1 Pages(250 words)Essay

An Effective Planning Process

Managements first and the most fundamental problem is selecting the right individuals with the prospective for development. evenly important is the placement of those individuals in positions in the organizational structure where their talents are most desired.
Manpower development instigates with human resources planning also known as manpower planning, which establishes a firm's specific personnel rations. These are attained by a qualitative fortitude of the individual job specifications and of the specific characteristics required of a person for the successful performance of each job. Once these job requirements are recognized, it is essential to forecast the number of persons desired for each job. This stage of employmen...
11 Pages(2750 words)Coursework

Does Terrorism Work as a Means of Changing World Policies

That is the dilemma associated with terrorism--- the double-edged weapon. The old saying that one man's terrorist is another man's freedom fighter, is still in vogue. A man belonging to Al-Qaeda can be a so-called freedom fighter for Bin-Laden but for President George Bush Government, he is simply a terrorist, who spills the blood of the innocents.

The basic and the debatable question here is whether terrorism really works in the present scenario in changing the Governments and their opinions? There appears to be a number of instances across the globe wherein it has been felt that terrorists, except killing innocents and making media headings and stories, have generally failed in their deadly mission in toppling the dem...
7 Pages(1750 words)Report

Effective Methods of Teaching Anatomy

Herein, comparisons will be made to highlight the differences in using anatomical models for study versus self-directed (usually textbook) learning. As well, the use of tutors as an advantage in the medical classroom will be discussed.

Some students are hands-on learners. For them, three-dimensional (3D) anatomical models are effective. “Exploratory tools enable users to investigate structures in ways not possible in the real world” (Implementing, para. 3). These 3D models can represent just about any part of the human body. Models are available of small structures, like the head, or of the entire human skeleton. Models of the entire human body can also be purchased. Some of them even have removable parts so...
6 Pages(1500 words)Report

Correlation between Motivation and Efficiency

It also has many warehouses to deliver chilled and frozen food to customers. It is highly unpleasant for the workers to work in the chilled warehouses. Just five years ago, one of the warehouses in Stroke-on-Trent introduced a new technical system that transformed the attitude of the workers and their efficiency.
Though the company spent almost £ 300,000 on installing a new system, it reckoned that by cutting down the mistakes and providing a better workplace for workers it could save that much amount in the first year itself. Prior to the installation of a new communication system, workers felt much boring with the old techniques of writing the movements of goods by a bit of paper and pencils. Apart from mistakes and e...
6 Pages(1500 words)Research Paper

Measures of an Effective Organizational Performance

Social capital has an important role in the goal-attainment of actors through the support of relationships. Actors could either be individual people or groups such as firms and other organizations. In groups, the social relations matter most between, and not within, the groups (ibid). Apparently, it cannot be discounted that within the group and individual has social capital in associations between people, yet then the significant actors are the members of an organization, not the organization as a whole. Like physical and human capital, social capital also demands investment to construct.
Entrepreneurs and managers nowadays are venturing into the realm of social capital because of two important elements that trail with it, w...
10 Pages(2500 words)Assignment

Efficiency and Profitability of Exxon Mobil

This increase could signify a change in credit policy for the company to stimulate more sales. The average collection period is computed by dividing the accounts receivable by daily credit sales. According to the computation for the year 2007, both the level of accounts receivable and daily credit sales have increased.
Accounts receivable turnover goes hand-in-hand with the average collection period—the longer the collection period, the lower the collection turnover. This is also evident in the trend of the accounts receivable turnover. This longer collection period and lower accounts receivable turnover, while it has some advantages over boosting sales, definitely impacts the liquidity of the firm and availability of t...
11 Pages(2750 words)Case Study

Effective and Ineffective Evaluation Tool

It has been an endless matter of debate for decades as to which methods reap effective results and which not.
One of the most effective tools for assessing students’ annual performance has to the one with a more comprehensive approach. The feedback by the teachers is very crucial for the students. It is the assessment plan which is developed by the teachers upon the on-going students’ achievements throughout the course and not merely upon the written traditional examinations1. It is considered to be an effective assessment tool because it reflects directly on the teaching and learning process of the teachers and students respectively. Feedbacks also help the students to engage in reflective, constructive and analy...
7 Pages(1750 words)Assignment

Gross Domestic Product and the Nations Competency in Terms of Economic Welfare

It is often used to compare the economic performance to aid as a prediction tool and to analyze the business cycles and the recessive and expansive economic performances within them. This further aid economic and fiscal policy formulation of the government and is also used to analyze the consumer behavior and the economic phenomena involved. (Heakal, R. 2008).These figures can be a benchmark to compare economies of different nations and the economic prediction process is also made possible.

A usual pattern of assessing the Gross Domestic Product is to have an initial GDP report on every quarter which is an advance report. Two corrective reports follow this before the final figures on GDP are arrived at. It usually takes...
7 Pages(1750 words)Report

Response of Effective Leaders to Diverse Team Environments

An effective leader is the one who adapts to the changing scenarios in terms of the team he leads and also in terms of the circumstances that the team faces. Herscovitch and Meyer (2002) have confirmed that workplaces are faced with endless change (s), and Paton and McCalman, (2000) have further stated that effective management of that change is an important competency currently required by an organization

Advancement in technology, travel options, communications and liberalization of international business regulations has incorporated numerous possibilities of conditions with diverse natures within the work environment. This trend was found to increase in the early nineties. The transference of a command-driven economy...
7 Pages(1750 words)Case Study

What It Means to Be British

With such a correlation, sports have always integrated with and thereby influenced many countries’ history and importantly the social belief of their people. Many British sports, as well as British sportspersons, have indulged in certain actions on the field as well as off the field, which have reinforced as well as challenged many perceptions of the people. Thus, this paper will analyze how sports in the United Kingdom have both reinforced as well as challenged dominant social beliefs about what it means to be British.
Social practices of the people in a particular nation including the social practice of sports contribute actively to the formation of that nation’s identity, as the people construct meanings influe...
7 Pages(1750 words)Assignment

Effective Communication in Terms of a Conflict

...Effective Communication in Terms of a Conflict Introduction In an organisation, it can be noted that conflict is inevitable but it can be solved amicably depending on the leader’s capability and interpersonal skills towards finding ways of resolving conflicts. Thus, it is also important to explain the meaning of conflict as a way of gaining a clear understanding of the interpersonal skills that are considered to be important in solving conflicts. A conflict is an active disagreement between people with different opinions, values or interests (Kleynhans 2007). Conflict can be on individual basis or group conflict where a group of people are disagreeing on something. The leaders in particular need to have good interpersonal skills...
16 Pages(4000 words)Research Paper

The Most Effective Means of Achieving Accountability in Organizations

... and the business executives are among the group of people who are usually behind the development of a corrupt business culture. Given that the shareholders within a business organization have the power to appoint or dismiss the members of the board of directors, the corporate law in Europe considers the need to investigate the shareholders and board of directors in situations wherein the practice of accounting fraud is suspected (Dine 2008). In this report, reasons why accounting is not the most effective way to achieve accountability within a business organization will be tackled in details. As part of going through the main discussion, the different ways of achieving accountability will be identified in terms of preventing the risk...
12 Pages(3000 words)Book Report/Review

Is Accounting the Most Effective Means to Achieve Company's Accountability

..., its level of effectiveness can be increased if the organisations employ other mechanisms of accountability in parallel. The limitations of accounting such as manipulation of figures because of various reasons are evident from the failures of companies like Enron. Moreover, these are not only the accounting laws and methodologies which can ensure accountability but how these methodologies are used, can also play a significant role. Therefore, accounting practices and methodologies provide the efficient means of ensuring the accountability of organisations however, more accounting reforms are required with other mechanisms of accountability to make accountability more transparent and reliable. Bibliography Accountability, 2008. AA1000...
12 Pages(3000 words)Term Paper
sponsored ads
We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.

Let us find you another Essay on topic Why are firms differentially effective and what this means in terms of efficiency for FREE!

Contact Us