9. Corporate Planning & Marketing Analysis

Strategic Planning & Marketing  Strategic planning done at the top management level  Ideally, marketing manager should be involved in the process, starting with the corporate objectives  So that he sets his own dept’s objectives in line with the corporate  This being so as marketing is an important function (remember: need for company to be marketing/customer oriented)

Marketing Objectives  These need to be tailored to marketing strengths, such as: A familiar brand name A strong patent Positive relationship with intermediaries Well-developed promotion/pricing resources A thorough knowledge of the target market

Basic Types of Competitive Situations  Pure competition - ideal  Oligopoly – a few big players, e.g., oil companies  Monopolistic competition – where several companies offer marketing mixes perceived as different by customers  Monopoly

Competitor Analysis  Evaluation of current/potential customers  Competitive rivals (closest competitors) – firms offering similar products/serving the same needs with a different product  Roles of competitor analysis: Help management understand our competitive advantages/disadvantages Generate understanding of competitors’ strategies Provide basis for developing our strategies Help forecast returns from future investments  Questions to ask (p 590)

Sources of Competitor Information  Recorded Data – easily available in published form, e.g., Annual reports, Brochures  Observable Data – actively sought and assembled from several sources (i.e., competitive pricing)  Opportunistic data: Much of this is anecdotal: from suppliers, customers, past management (see p 595)

Competitive Barriers/Competitive Advantage  Refer to Porter’s 5 Force Model  Barriers to Entry  Competitive advantage: being able to serve customer needs better than competition

Evaluating Business Opportunities  Marketing managers need to screen opportunities using set of product/market criteria  These criteria based on company resources and objectives, as well as market trends  Criteria should have quantitative and qualitative components Quantitative? Qualitative – types of business the firm wants to be in, its own strengths, etc  Portfolio Analysis – BCG Matrix, McKinsey/GE Matrix

Benchmarking *Identifying Best Practice *The Benchmarking Process *Planning a Benchmarking Project *Conducting a Benchmarking Project

Identifying Best Practice

 Continual improvement is core pursuit of quality  Business cannot be complacent; competing organizations will always find new & better ways of providing service; so business must continually improve  One way: organizational improvement based on comparative measurement - benchmarking

Identifying Best Practice  Xerox adopted & documented this approach in 1979  Xerox’s definition of competitive benchmarking: “the continuous process of measuring products, services and practices against the toughest competitors, or those companies recognized as industry leaders”

Identifying Best Practice  Benchmarking: a structured self-discovery tool that acts as a catalyst and enabler of change and allows organizations to learn from experience  Benchmarking now widely recognized as critical to organizational improvement

Identifying Best Practice  Key benchmarking steps:  - understand your own processes & practices  - identify performance drivers for your business  - identify industry leaders, competitors or ‘best-in-class’ practices  - learn from the best  - adapt and adopt their best practices  - gain competitive parity  - seek competitive advantage

Identifying Best Practice  Benchmarking aims to understand ‘metrics’ & ‘the practice’  Metrics – measure of extent/degree or ‘gap’  The Practice – how performance difference is achieved  Both are crucial

Identifying Best Practice  - Benchmarking requires Management commitment to take action if necessary  - Also, requires carefully designed communications throughout the organization  - Employee involvement at every step  Benchmarking widely practiced now, but poorly implemented

The Benchmarking Process

The Benchmarking Process – Xerox Benchmarking Process Steps 1. Identify benchmarking subject 2. Identify comparative companies 3. Determine data collection methods & collect data Planning 4. Determine current competitive gap 5. Project future performance Analysis 6. Communicate findings and gain acceptance 7. Establish functional goals Integration 8. Develop action plans 9. Implement plans & monitor progress 10. Recalibrate benchmark Action Leadership position attained Practices fully integrated Maturity

The Benchmarking Process  Benchmarking activity falls into one of the following categories:  - internal: comparing with other internal depts of same company (e.g., complaints handling). Usually easiest to handle; info available. But unlikely to lead to world class  - competitor based: comparison with competitor. Difficult to obtain info because of confidentiality, though some metrics in public domain  - functional: comparison with non-competitive organizations with same functional ability (e.g., call handling, warehousing). Easy, as functional leaders easy to identify  - generic: comparison of business processes that cut across functions & industries (e.g., invoicing). Most innovative benchmarking breakthroughs in this type

The Benchmarking Process  Freely available data can be used, but may not give best benchmarking results  The most useful data is usually jealously guarded  Because of this, formal benchmarking agreements are used – however, this may go against the benchmarking spirit of cooperation; could use confidentiality/non-disclosure agreements instead

Planning a Benchmarking Project

 Benchmarking almost always a team activity  Typically, a steering committee formed with specialists form areas of most concern  Members must be motivated to improve & are in a position to implement changes; they must be trained in the benchmarking methodology and other quality improvement tools (i.e., business process analysis & flowcharting)

Conducting a Benchmarking Project

 Benchmarking info can be obtained thru’ telephone, personal interviews, questionaires or personal visits  Any contact needs to be planned in advance – purpose of contact clear and questions well- prepared  Contact should be structured & carried out in a professional manner (i.e., timing, conduct, etc)  Results from benchmarking should address both metrics and practices

Conducting a Benchmarking Project  Analysis of benchmarking info frequently addresses quantitative data, but qualitative data (i.e., interview comments) generally provides greater opportunity for determining innovative approaches/ concepts  Organizations can also learn from partner’s problems – leading to unforeseen benefits – benefits for the organization with best practice in the partnership  Open and honest exchange of info can lead to a win-win situation