When developing marketing strategies and devising marketing plans, organizations need to consider very closely the internal prerequisites for success.
In this instance, it is essential that organizations develop a strategy that primarily meets the needs, wants and expectations of their customers and that they have the resources and infrastructure within the organization to deliver their promises and meet their corporate and marketing objectives.
Ultimately, a culture appropriate to customer demands must be in place, that is a marketing- oriented customer-focused culture, with the customer at the centre of the business, as expressed by the chief executive of ‘easyJet’ in Unit 1.
In doing this, serious consideration should also be given to the ‘internal’ customer. When a newly devised strategy indicates significant change, then the reactions, attitudes and abilities of the workforce must be considered, managed and adapted to meet the overall objectives of the organization.
In order to achieve this, a tightly defined strategy must be designed, which ensures that management, research and development, production, logistics, physical and financial resources are working to the same end and ‘synergy’ must be prevalent in the planning process. Without the appropriate mix of resources across the organizational business func- tions, the corporate goals may not be achieved.
Therefore analysis of each of these functions should be considered. Undertaking a company capability profile is therefore of the essence.
A full audit should be undertaken, with consideration being given to the following factors: Managerial factors
o Corporate image
o Speed of response to changing conditions o Flexibility of the organization
o Entrepreneurial orientation
o Ability to attract and retain highly creative people o Aggressiveness in meeting competition.
Competitive factors
o Product strengths
o Customer loyalty and satisfaction o Market share
o Use of the life cycle o Investment in R&D
o High barriers to market entry
o Advantage taken of market potential o Customer concentration
o Low selling and distribution costs.
Financial factors
o Access to capital when required o Ease of exit from the market o Liquidity
o Degree of financial leverage o Ability to compete on prices
o Capital investment versus capacity to meet demand o Stability of costs
o Ability to sustain effort in cyclic demand o Elasticity of price.
Technical factors
o Technical and manufacturing skills o Resource and personnel utilization o Strength of patents and processes o Value added to product
o Intensity of labour to produce product o Economies of scale
o Newness of plan
o Application of new technologies o Level of co-ordination and integration.
One way of undertaking this form of analysis is grading these areas from 1 to 5, with 1 being weak and 5 being strong. Clearly any particular element that falls under the level of 3 requires urgent attention, while factors being above 3 demonstrate room for continuous improvement. This type of analysis is vital to the success of organizations and will ultimately enable you to identify key strengths and weaknesses, opportunities and threats within your own environment. It is of primary importance to undertake an ‘audit’ of the actual ‘audit process’ itself, the marketing objectives and plans and the overall marketing activity including the effective inte- gration of the marketing mix.
Marketing managers will have some responsibility for adopting existing practices and modifying plans, in order that these factors are taken into consideration at the implementation stage.
Competitors
Definition
Competition – Those companies marketing products that are similar to, or can be substituted for, a given business’s products in the same geographic area (Dibb, Simkin, Pride and Ferrell, 2001, p. 56).
Very few, if any, organizations exist in isolation of competition. You have already seen, earlier in this unit, some of the effects of competition in relation to the high-tech electronics industries, where as a result of intense competition profits have declined, resulting in massive job cuts across the industry as a whole.
From the perspective of a marketing manager, in order to truly ascertain the full force of the external environment, you must consider the influence of competitive forces upon the external marketplace and your own organization. Therefore a competitor analysis is essential.
There are many components to competitive activity, and in marketing terms competitive strategies can be quite ferocious in attack. From a strategy development perspective you will probably be familiar with terms such as ‘guerrilla attacks’ and ‘offensive attacks’, which indicate some of the fighting talk that underpins competitive behaviour.
In order that your organization can respond to competitor attacks, you must be familiar with the profile of your competitors and therefore must analyse their activities and behaviour quite closely.
Ultimately, competitor attacks can provide the basis of significant threats to the successful implementation of the corporate and marketing strategy.
Typical competitor analysis should include a review of the following elements:
o Marketing capabilities o Technical capabilities o Management capabilities o Production capabilities
o Innovation and design capabilities.
Clearly you will need to align your own strengths and weaknesses against those of your competitors in order to identify areas of improvement in your own organization.
One of the key tools for undertaking this is a ‘Company capability profile’, as previously discussed. You could do this by undertaking a SWOT analysis on your competitor. This is covered in more detail shortly, but as you will see when looking at it, there are possibilities of mapping your own capability against that of your competitors. You could potentially grade each of the components within an element and then grade your own organization against it. Not only would this provide you with a basis of understanding your competitor, but also it would highlight any opportunities to exploit their weaknesses and attack their strengths.
The main focus of most competitive attacks is on price. Competitive warfare today is most prevalent in the retail sector, with intense competition between supermarkets, making high
profile headlines on a regular basis. A further example is financial services, where competition in respect of services and products offered continues to intensify on a day-to-day basis.