Assignment Report

Submitted to: Oxbridge College Submitted by: Mahad Insha Student ID: Course Name: Postgraduate Diploma in Business Management Module Name: Managing Change in Organisations itle: Managing Change in Organisations

Question No 1:
The Strategic marketing literature abounds with models of the strategic marketing planning process. Select a well known model, critically describe it and describe its usefulness to the practising marketing manager. Out of the Strategic Marketing Planning Process models, I will present an analysis of Ansoff Analysis here. Introduction: The Ansoff Growth matri is a tool that helps !usinesses decide their product and market growth strategy. Ansoff"s product#market growth matri suggests that a !usiness" attempts to grow depend on whether it markets new or e isting products in new or e isting markets.

Source$ Gerry %ohnson Page &'( nsoff nalysis: !"aluation: In spite of the fact that Ansoff analysis is a strong helping tool to map the strategic options for different companies, it has few limitations as well that if a manager is not aware of will gi)e rise to a weak strategy. %ill &((* + argues that Ansoff analysis can gi)e e plain a typical part of strategy !ut its is not as good as other strategic models such as S,OT and P-ST-. to mention a!out the strategic changes in future. %ust with the use of Ansoff analysis, a

Managing the future !y

Haridimos Tsoukas, Jill Shepherd Page 156

company can ne)er come to know a!out the future options a)aila!le for it that can cause a noticea!le fall in its performance. /ignali, &((+& 0uotes the e ample of /irgin 1ola and argues that they launched their !rand my using market penetration strategy and he feels that they should increase its !rand recognition. 2e conducted a S,OT analysis of /irgin 1ola and showed that )irgin cola had an opportunity to di)ersify into new ranges of products as well with !rand name /irgin. As an e ample, 1oca 1ola holds the !iggest market shares in the soft drinks industry in the world and they keep on introducing the new products in the market !efore their competitors e)en think a!out that. In past they ha)e introduced so many products such as 3anta, Sprite, 1oke .ime, 1oke 1herry, 1oke /anilla etc. Similarly P-ST analysis of /irgin 1ola showed that there was a need to constantly e)aluate the soft drinks industry across the glo!e in order to know more a!out the customer trends, there!y allowing the !rand to gain market share and also predict trends faster than its competitors. 2e concluded that to de)elop a fuure strategy S,OT, P-ST and Ansoff analysis can !e used !ut none of them can !e used in isolation to )iew a complete strategic scenario. 2e further e)idenced that only one model is not concrete and lack in depth. Proctor4 has supported the a!o)e with an e ample of Marks and Spencer. The company was ha)ing difficulties to keep up with the trends and e perienced the declines in sales due to strong competitors in the market such as 5e t, 6e!nham etc. They conducted a detailed study of the reasons that caused all this and they realised that their current marketing strategy was lacking a lot of key factors. ,ithout addressing these factors they could ne)er o)ercome the pro!lems. Their competitors were more aware of the customer trends and their needs. M7S conducted a P-ST-. analysis and they came up in the market with a Per 8na range of clothing in order to compete effecti)ely and gained good market share. They could ha)e ne)er gained any clues to identify which strategy to use had they not done a P-ST-. analysis.
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Gerry Johnson, Kevan Scholes, Richard

hi!!ing!on Page

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The informed student guide to marketing !y

Philip J$ Ki!chen, Tony Proc!or Page %5

,hile the role of Ansoff analysis in making strategic choices cannot !e undermined, it is imperati)e to note that 9udgement plays a crucial role in making critical strategic choices that may change the future of the firm :Macmillan et al, &(((;. 3inally, the use of Ansoff matri as a marketing tool may not !e really useful as the matri is critical for analysing the strategic path that a typical company is following presently !ut it fails to gi)e an indication of the future options a)aila!le for any company as descri!ed in the a!o)e e amples. If the a!o)e mentioned companies were following 9ust Ansoff analysis they could ha)e ne)er impro)ed their performance without the use of S,OT and P-ST-. analysis. Ansoff matri is one of the most well known frameworks for deciding upon growth strategies of an organisation. Strategic options relating to which products or ser)ices an organisation may offer in which markets are critical to the success of companies. The Ansoff matri marketing audits. The differences in strategic choices of organisations can often !e attri!uted to the type of market in which the company operates. 1hanges in !usiness en)ironment play a crucial role in the strategic options that an organisation may pursue o)er its life stages. There are risks associated with all of the four strategic options entailed in the Ansoff matri . Market penetration is generally considered as a low risk strategy while di)ersification, on the other hand, is deemed as a high risk growth strategy as it in)ol)es mo)ing simultaneously into new products and new markets. 6i)ersification remains a popular strategic option for firms in today"s competiti)e !usiness arena, and if the di)ersification strategy is consistent and well though<out, like the case of I=M, significant impro)ements in profita!ility can !e e perienced. Sources of finding information for Ansoff analysis include company we!sites, marketing communications acti)ities, company"s annual reports, 9ournal articles, trade pu!lications and well reputed !usiness maga>ines. .astly, Ansoff matri as a strategic model has certain limitations. The use of S,OT is a useful, though not an e hausti)e, framework for an organisation"s o!9ecti)e setting process and

and P-ST-. analysis is recommended, along with Ansoff analysis, to !e a!le to capture a holistic )iew of the strategic scenario of an organisation.

Question No 2:
#ritically re"iew and e"aluate $orter%s &i"e &orces &ramework of #ompetetion. ssess its usefulness for Strategic 'arketing 'anager. Porter"s 3i)e 3orces 3ramework is static in nature and this fact forces the criti0ues to assess it with some faults as the competiti)e en)ironment changes tur!ulently. A !ig 0uestion mark can !e placed here on this framework in a scenario where industry is in the e pansion process as this framework does not ha)e a capa!ility to forecast the industry e pansion. .ynch :&((4;? says that Porter"s model does not recognise the dynamic forces of e ternal en)ironment. It also fails to pro)ide the corporate strategic goals to find the position in the industry or intention to produce inno)ati)e ideas that e pand the si>e of the industry. Porter has himself contended* that it is important to look o)er the immediate competitors as there are other factors as well that determine the profita!ility. Such a situation especially comes with the introduction of su!stitute products in the market. An e ample would !e plastic !ottles, cans and glass !ottle for packaging soft drinks. There may also !e potential threat of new entrants, although some competitors will see this as an opportunity to strengthen their position in the market !y ensuring, as far as they can, customer loyalty. Porter"s model is a most suita!le application only in the case of simple markets structural@ analysis. It is e tremely hard to implement it in the case of comple industries that ha)e multiple interrelations, product groups, !y products and segments. A too narrow focus on particular segments of such industries, howe)er, !ears the risk of missing important elements. In such
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Tourism marketing !y

&lan 'yall, (rian Garrod Page 6" )harles $ *$ Hill, Gare!h R$ Jones Page +1

Strategic management !y =usiness strategy !y

,avid )amp-ell, George S!onehouse, (ill Hous!on Page 1."

cases, this model seems to !e of )ery limited use and the managers can"t e pect any !enefits !y using this model.

Porter"s 3i)e 3orces model is !ased on the idea of competition A. It descri!es that all the companies try to achie)e competiti)e ad)antages o)er other players in the markets including suppliers and !uyers. ,ith this kind of approach, it does not consider other important strategies such as strategic alliances, electronic linking of information systems of all companies along a )alue chain, )irtual enterprise<networks or others. In this conte t, %ohn A ParnellB argues that this model fails to account for the role of partnerships that is a growing procedure in most of today"s industrial sectors. ,hen firms work together either o)ertly or co)ertly, they create comple relationships that are not easily incorporated into industry models. In addition to this Parnell has e)idenced that this framework does not take into account that fact that some industries especially the large industries often change the industry structure in order to increase the future profits. It is a common practice to notify in the airline industry they lo!!y for hefty safety restrictions to create an entry !arrier to potential upstarts. Porter claimed that this framework can assess the future profit of any industry. There is some e)idence in the fa)or of this claim !ut there is strong e)idence that some company specific factors ' are more important to measure the profita!ility of any industry. Indi)idual competencies of any industry )ary from industry to industry and these gi)e a more competent figure of potential profita!ility. In spite of the a!o)e mentioned limitations of this model, it does not mean that this model is in)alid. A good manager can still gain !enefits !y the use of this model with a good knowledge of the .imitations of this model and to use them as a part of a larger framework of management tools, techni0ues and
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=usiness strategy !y 6a)id 1amp!ell, George Stonehouse, =ill 2ouston B Strategic Management$ Theory # Practice !y John &$ Parnell Page "% =usiness strategy !y

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6a)id 1amp!ell, George Stonehouse, =ill 2ouston Page +?&

theories. This approach, howe)er, is ad)isa!le for the application of e)ery !usiness model :Cecklies, &((+;. A !rief description of competiti)e ad)antages for managers is descri!ed !elow.

#ompetiti"e d"antage for 'anagers If a company seeks to understand the nature of its competiti)e en)ironment if it is to !e successful in achie)ing its o!9ecti)es and in esta!lishing appropriate strategies. If a company fully understands the nature of the Porter"s fi)e forces, and particularly appreciates which one is the most important, it will !e in a stronger position to defend itself against any threats and to influence the forces with its strategy. The situation is fluid, and the nature and relati)e power of the forces will change. 1onse0uently, the need to monitor and stay aware is continuous that is !eneficial for company.

Some issues during the implementation of these 3i)e 3orces are crucially important for organi>ations to !uild long<term !usiness strategy and sustaining competiti)e ad)antages rather than simply list the forces. Successful use of the Porter Model Analysis includes identifying the sources of competition, the strength and likelihood of that competition e isting, and strategic recommendations for the action a company should take to in order to de)elop !arriers to competition.

Question No (:
)utline and describe the ma*or changes taking place in today%s markets. +etail those that are likely to ha"e the most important impact on business as we settle into the twenty first century. $ro"ide e,amples of ways in which new competiti"e strategies can be fashioned to e,ploit the opportunities that are emerging. The !usiness en)ironment of any industry these days is relentlessly su!9ected to changes. These changes force the managers to reassess their e isting strategies in order to gain the targets. Out of so many changes, the one I ha)e chosen here is recession that is not only the pro!lem of 8D !ut it"s a glo!al pro!lem and it has forced so many companies to wind up their !usinesses all

o)er the world such as ,oolworth"s etc. In economics +(, a recession is a general slowdown in economic acti)ity in a country o)er a sustained period of time, or a !usiness cycle contraction. Cecession can affect any !usiness in the following ways

=ankruptcies 1redit crunches 6eflation :or disinflation; 3oreclosures 8nemployment

To o)ercome recession, we can use the following techni0ues. Mc6onald &((A++ says that cutting down the marketing !udget is not !eneficial to do !usiness in recession. Instead of this, you must know more than e)er how the consumers redefine the )alue and answer recession. The cur)es of stretch of prices change. The consumers take more time !y searching the long lasting goods and negotiate more hard so as to sale. They are more willing to delay purchases, trade down, or to !uy less. 3aithful marks are especially assessed and they can always throw new products successful

Dawasaki &((&+& says that during the hard times, some companies think to cut down marketing costs that is a wrong mo)e. 2e argues that during the recession periods, most of the competitors cut down the ad)ertising costs and this is the !est time to impro)e market share !y )arying on the ad)ertising of your products in an effecti)e way. This mo)e gi)es reassurance to uncertain customers a!out the known !rands. . If you ha)e to cut marketing spending, try to maintain the fre0uency of ad)ertisements !y shifting from 4(<to<+* second ad)ertisements, su!stituting radio for tele)ision ad)ertising, or
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http$##en.wikipedia.org#wiki#Cecession ++ Marketing plans !y /alcolm /c,onald Page 011 +& 1reating 1ustomer -)angelists !y (en /c)onnell, Jackie

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increasing the use of direct marketing, which gi)es more immediate sales impact. 2e further suggests that Marketers must reforecast demand for each item in their product lines. This is !ecause of the fact that the consumers fancy trading to models that stress good )alue, such as cars with fewer options. Tough times fa)our multi<purpose goods o)er specialised products and weaker items in product lines should !e pruned. In grocery<products categories, good<0uality own<!rands gain at the e pense of national !rands. Industrial customers prefer to see products and ser)ices un!undled and priced separately. Gimmicks are outE relia!ility, dura!ility, safety and performance are in. 5ew products, especially those that address the new consumer reality and there!y put pressure on competitors, should still !e introduced !ut ad)ertising should stress superior price performance, not corporate image. 1onrad .e)inson&((4+4suggests that during uncertain times, most of the companies don"t like to in)est their working capital in e cess in)entories. F-arly<!uy allowances, e tended financing and generous return policies moti)ate distri!utors to stock your full product lineG. This is particularly true with unpro)en new products. =e careful a!out e panding distri!ution to lower< priced channelsE doing so can 9eopardise e isting relationships and your !rand image. 2owe)er, now may !e the time to drop your weaker distri!utors and upgrade your sales force !y recruiting those sacked !y other companies. 2e further suggests that the customers will !e shopping around for the !est deals. Hou do not necessarily ha)e to cut list prices !ut you may need to offer more temporary price promotions, reduce thresholds for 0uantity discounts, e tend credit to long<standing customers and price smaller pack si>es more aggressi)ely. In tough times, price cuts attract more consumer support than promotions such as sweepstakes and mail<in offers.

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Guerrilla marketing e cellence !y

Jay )onrad *evinson Page 1%5

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Dawasaki &((&+? again suggests that in all !ut a few technology categories where growth prospects are strong, companies are struggling for market share and, in some cases for their sur)i)al. If a company is fully aware of its cost structure, it can ensure that any cuts or consolidation initiati)es will sa)e the most money with minimum customer impact. F1ompanies such as ,al< Mart and Southwest Airlines, with strong positions and the most producti)e cost structures in their industries, can e pect to gain market share. Other companies with healthy !alance sheets can do so !y ac0uiring weak competitorsG. Although most companies are making employees redundant, chief e ecuti)es can cement the loyalty of those who remain !y assuring employees that the company has sur)i)ed difficult times !efore, maintaining 0uality rather than cutting corners and ser)icing e isting customers rather than trying to !e all things to all people. 1-Os must spend more time with customers and employees. -conomic recession can ele)ate the importance of the finance directorIs !alance sheet o)er the marketing managerIs income statement. Managing working capital can easily dominate managing customer relationships. 1-Os must counter this. Successful companies do not a!andon their marketing strategies in a recessionE they adapt them.

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1reating 1ustomer -)angelists !y

(en /c)onnell, Jackie Hu-a, Guy Ka2asaki Page .

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