The Hierarchy Of Strategic Intent Marketing Essay

The Hierarchy Of Strategic Intent Marketing Essay Strategic analysis, strategic choice and strategy application are the three parts of the Strategic Management. Strategic choice is anxious with decisions about the companys future and the way it needs to reply to the impacts and influences identified in strategic analysis. The choice becomes an indolent exercise if the strategy is not correctly implemented. These three divisions, so, form a closed loop in which the tail and the head are often vague. TASK1 Understanding the process of strategic planning: Explain strategic contexts and terminology missions, visions, objectives, goals, and core competencies: STRATEGIC INTENT: Strategic analysis, strategic choice and strategy application are the three parts of the Strategic Management. Strategic optimal is concerned with decisions about the organizations prospect and the way it needs to respond to the effects and impacts identified in strategic analysis. Choice becomes an indolent exercise if the strategy is not properly applied. These three divisions, consequently, form a closed loop in which the tail and the head are often indistinguishable. THE HIERARCHY OF STRATEGIC INTENT: I will discuss these parameters as a ladder of strategic intent. The ladder of strategic intent includes the following elements. A broad vision of what the organization should be. The organizations mission The strategic objectives   and specific goals to be pursued relentlessly The plans that are developed to accomplish the intentions of management in a concrete way. The fundamentals of the hierarchy specify the devout intentions, lofty ideals and clear-cut ideas that serve to unify the energy and forces scattered throughout an business. They are beginning points for any formal planning process, but they also provide the sense of direction necessary to assure that incremental behavior culminates in overall progress. Strategic intent is said to have expressed effectively when individuals believe fervently in their products and industry and when they are absorbed totally on their firms ability to outdo its competitors. VISION: Vision is what keeps the business moving forward. Vision is the motivator in an business. It needs to be meaningful with a long term viewpoint so that it can motivate individuals even when the business is facing discouraging odds. Vision has been defined in numerous dissimilar ways. Kotter defines it as a description of somethings (an organization, corporate culture, a business, a technology, an activity) in the future. El-Namaki reflects it as a mental perception of the kind of environment an separate, or an organization, aims to create within a broad time prospect and the underlying conditions for the actualization of this insight. Miller and Dess view it simply as the category of intentions that are broad, all inclusive, and forward thinking. The communal strand of thought evident in these definitions and several others available in strategic management literature narrates to vision being future ambitions that lead to an inspiration to be the best in ones field of action. CHARACTERISTICS OF VISION: Vision is industrialized through sharing across an organization: Famous stories of successful vision include visions that have been extensively shared across entire organizations. Of course, an individual leader, often a founder has a powerful influence on the others. Techniques of convincing the others about vision: The leaders by working hard along with others persuade the others in the organizations rather than merely delivering speeches. Change Agents: Leaders must recognize the complexity of changing an outmoded vision to reflect new realities. Organizations must redefine themselves through efficient visions of the future through new purposes and strategies. THE ADVANTAGES OF HAVING A VISION: Parikh and Neubauer point out that numerous advantages accumulating to a business having a vision. Here is what they say: Good visions are inspiring and exhilarating. Visions represent a discontinuity, a step function and a jump ahead so that the company knows what it is to be. Good visions help in the creation of a common identity and a shared sense of purpose. Good visions are competitive, original and unique. They make sagacity in the marketplace as they are practical. Good visions foster risk-taking and experimentation. Good visions foster long-term thinking. Good visions represent integrity; they are truly genuine and can be used for the benefit of people. VISION STATEMENT: When you initiate the process of strategic planning, visioning comes first. Martin Luther King, Jr. said, I have a dream, and what followed was a vision that altered a nation. That famous speech is a dramatic example of the power that can be produced by a convincing vision of the future. A vision is a guide to applying strategy. Visions remain about feelings, beliefs, feelings and pictures. A vision statement responses the query, What will success look like? pursuiting of this advent of success is what inspires individuals to work collectively. It is an significant obligation for building a strong foundation. When all the staffs are committed to the companys visions and goals, best choices on business decisions are more likely. CREATING A SHARED VISION: Most managers, now-a-days, talk about a communal vision, meaning that individuals from across the business have a common mental image and a equally supported set of ambitions that serve to unite their efforts. MISSION: A mission was earlier careful as the scope of the industry activities a secure pursues. The definition of mission has slowly expanded to represent a concept that exemplifies the purpose behind the existence of an organization. Business mission can be defined as the important, unique purpose that sets a business apart from other companies of its type and identifies the scope of its operations in product and market term. CHARACTERISTICS OF A MISSION: A mission statement includes the basic business purpose and the reason for its being by rendering some valuable functions for the society. An effective mission statement should possess the following physiognomies. Feasible: The mission should be accurate and achievable. For example, Tesco professed its mission as to encourage saving among customers by selling their product cheep. Precise: A mission statement should not be fine or too comprehensive. Clear: A mission statement should lead to action. O2 mission of connecting people leads it to a variety of service with varied tariff structure so as to cater to the preferences of mobile phone users. Motivating: The mission should be motivating for the employees to be inspired for action. For example Royal mail mission is to expectations of the customer with dedication, devotion and enthusiasm. So customer service has develop a value and it is inspirational and motivating the postal employees. Distinctive: A mission statement will indicate the major components of the strategy to be adopted. The mission should be unique. When Microsoft defines its mission as to be a world class competitor it creates a unique place in the minds of individuals personal computer users. Indicates major components of strategy: The mission statement of Shell Bp emphasizes petroleum refining, marketing and transportation with international standards and modern technology. It indicates that Shell Bp is going to adopt diversification strategy in future. The mission delivers way to insiders and strangers on what the company stands for. It is the supervisory star for any copany. MISSION STATEMENTS: Vision is the critical focal point and beginning to high presentation. But clearly a vision alone wont make it happen. Even the most exciting vision will remain only a dream unless it is followed up with the striving, building, and improving. RESEARCH OF VISION AND MISSION STATEMENTS: In a competitive economy ambitious by the cruel logic of markets, a business with a determined management can transform a business much more quickly and much more efficiently than in the past. Clearly enunciating your strategic intent is the key. Vision and Mission hold an business together. OBJECTIVES: An objective designates the result that the business expects to achieve in the long run. It is an end result, the end point, somewhat that you aim for and try to reach. It is a desired result towards which behavior is directed in a business. CHARACTERISTICS OF OBJECTIVES: Objectives have the following structures: Objects Form a Hierarchy: In many organizations objects are structured in a hierarchy of importance. There are objectives within the objectives. Objectives Form a Network: Objectives interlock in a network fashion. They interrelated and interdependent. The concept of network of objectives implies that once objectives are established for every department and every individual in a business, these subsidiary objectives should contribute to meet the objectives of the total business. Multiplicity of Objectives: Organizations pursue multifarious objectives. At every level in the hierarchy, goals are likely to be manifold. Long and Short-range Purposes: organizational objects are usually related to time. Long-range objects extending over five or more years are the ultimate or dream objectives for the business GOALS: They are stated in precise terms as quantitatively as possible. The emphasis on goals is on measurement of progress toward the attainment of objectives. Goals have the following structures they: 1. Are resulting from objects, 2. Offer a normal for measuring presentation, 3. Are articulated in concrete terms, 4. Are time-bound and work-oriented. Advantages and Disadvantages: It helps organizations do to satisfy a particular need of the society or to fulfill a particular deficiency in the society. There is always a deadline which sometimes is never meant by organizations. Review the issues involved in strategic planning: Businesses that succeed do so by creating and keeping customers. They do this by providing better value for the customer than the competition. Marketing management constantly has to assess which customers they are trying to reach and how they can design products and services that provide better value (competitive advantage). The main problem with this process is that the environment in which businesses operate is constantly changing. So a business must adapt to reflect changes in the environment and make decisions about how to change the marketing mix in order to succeed. This process of adapting and decision-making is known as marketing planning. Where does marketing planning fit in with the overall strategic planning of a business? Strategic planning is concerned about the overall direction of the business. It is concerned with marketing, of course. But it also involves decision-making about production and operations, finance, human resource management and other business issues. The objective of a strategic plan is to set the direction of a business and create its shape so that the products and services it provides meet the overall business objectives. Marketing has a key role to play in strategic planning, because it is the job of marketing management to understand and manage the links between the business and the environment. Sometimes this is quite a straightforward task. For example, in many small businesses there is only one geographical market and a limited number of products (perhaps only one product!). However, consider the challenge faced by marketing management in a multinational business, with hundreds of business units located around the globe, producing a wide range of products. How can such management keep control of marketing decision-making in such a complex situation? This calls for well-organized marketing planning. What are the key issues that should be addressed in strategic and marketing planning? The following questions lie at the heart of any marketing and strategic planning process: à ¢Ã¢â€š ¬Ã‚ ¢ Where are we now? à ¢Ã¢â€š ¬Ã‚ ¢ How did we get there? à ¢Ã¢â€š ¬Ã‚ ¢ Where are we heading? à ¢Ã¢â€š ¬Ã‚ ¢ Where would we like to be? à ¢Ã¢â€š ¬Ã‚ ¢ How do we get there? à ¢Ã¢â€š ¬Ã‚ ¢ Are we on course? Why is marketing planning essential? Businesses operate in hostile and increasingly complex environment. The ability of a business to achieve profitable sales is impacted by dozens of environmental factors, many of which are interconnected. It makes sense to try to bring some order to this chaos by understanding the commercial environment and bringing some strategic sense to the process of marketing products and services. A marketing plan is useful to many people in a business. It can help to: à ¢Ã¢â€š ¬Ã‚ ¢ Identify sources of competitive advantage à ¢Ã¢â€š ¬Ã‚ ¢ Gain commitment to a strategy à ¢Ã¢â€š ¬Ã‚ ¢ Get resources needed to invest in and build the business à ¢Ã¢â€š ¬Ã‚ ¢ Inform stakeholders in the business à ¢Ã¢â€š ¬Ã‚ ¢ Set objectives and strategies à ¢Ã¢â€š ¬Ã‚ ¢ Measure performance Advantages and Disadvantages: Market planning delivers a means for actively involving personnel from all areas of the business in the management of the company and this participation improves the quality of the plans, with the participation of the staffs it enhances their overall understanding of the companys objectives and goal. One of the disadvantages is costly to implement. Explain different planning techniques: Planning is a critical business responsibility that is often overlooked, particularly by smaller companies with limited time and personnel resources. However, the reason for this oversight is often the result of managements lack of planning techniques. Learning useful planning methods and factors eliminates this knowledge gap. Business planning is just as critical as having a map when traveling to an unfamiliar location. Without it you may never reach your destination. Primary Planning Types Business planning types come in various flavors depending on the company size and industry. However, there are three basic plans that apply to all businesses, large or small. Business, strategic and marketing plans are important to every for-profit and nonprofit organization. Understanding the goals and components of each offers businesses the tools to create effective plans using the most basic or sophisticated techniques. Business Plans Typically used for starting up or financing a company, business plans are the cornerstone of the planning function. Components of a business plan include an executive summary, market analysis, product/service descriptions and financial/operations projections for a minimum of three to five years. In start-up situations that need initial financing, creators should paint a vivid, yet conservative, picture of the founders and the rationale for believing the business will succeed. When seeking growth-financing, management should highlight past company performance and carefully project the impact of the new funding on improving net income. Always include debt service, which is the amount needed to repay the new loan, in income and expense projections. Strategic Plan Strategic plans should be created by business owners and/or senior management only. Unlike business plans, which are based on historical data and future projections, strategic plans are more conceptual. These plans should include defining your organizational goals, identifying your available options to achieve your objectives and considering new short-term opportunities you believe will exist to improve your businesss results. You may want to incorporate specific industry trends into your planned strategy. Strategic plans are not long-term creations, but should address taking advantage of available opportunities in the next 12 to 24 months. Marketing Plans All the fabulous business and strategic plans ever devised will fail if you dont market and sell your product or service. A solid marketing plan will help you achieve gross income and sales goals. A SWOT (strengths, weaknesses, opportunities, and threats) analysis is an effective technique for creating a winning marketing plan. SWOT is also useful in strategic plan creation as a foundation technique. You can also combine a SWOT analysis with the four Ps product, price, publicity, and place of effective marketing. Even if you have invented the better mousetrap, you need a superior marketing plan to get results. These techniques will give you the ammunition you need. SWOT analysis and marketing A vital part of the planning process is looking at the existing position of an industry and trying to decide how factors external to the business may affect the business. An organization can perform a SWOT analysis as a way of deciding which marketing plan to use.   The organization performs an audit on the internal and external nature of the company looking at the current and future situation.   An audit is a review of all the company s activities. Internal Explanation Strategy Implications Strengths Reviews the business current strengths such as a good brand or strong sales performance Can develop the strengths, perhaps in the way they promote the product, or wish to develop new products (Tesco have used their strong brand name to launch several products) Weaknesses Reviews the business current weaknesses such poor response times to requests for information or late deliveries Can implement strategies to eradicate these weaknesses e.g. more resources put into a better warehousing system for the dispatch of goods. External Opportunities Reviews the business future opportunities e.g. new technology making it easier to manufacturer certain goods or new markets abroad Can use strategies to take advantage of the potential opportunities e.g. developing new products to meet the potential increased demand Threats Reviews the business future threats, mostly from increased competition from other firms or from changes in the economic situation. Can employ strategies to ward off these problems, e.g. setting lower prices or increasing promotion Rational about the use of a SWOT analysis in measuring the influence of marketing to a business strategy; Possible strengths in marketing might be: Specialist marketing expertise An innovative product or service The location of the business convenient for customers The reputation of the brand perhaps it is trusted or recognized as the highest quality Likely weaknesses in marketing could include: Lack of a clear product differentiation compared with competing products Weak distribution compared with competitors Inadequate online presence Potential marketing opportunities could include: The use of technology to develop new products Growing demand from overseas markets (e.g. China India) The use of social media like Facebook and Twitter to reach new customers A list of likely marketing threats might include: Competitors introducing better products at lower prices Changes in the economic environment which encourage customers to be less loyal to established brands Changes in customer tastes and fashions Universal Techniques To make business planning come alive and succeed there are three simple practices that must be always be employed. First, set realistic, measurable goals. Second, understand and communicate with your customer base. Third, attract and retain the best employees your company can afford. Without these three components, your business planning, however sophisticated, risks failure on a massive scale. Using these three simple techniques, your business plans should deliver the results you want. SPACE, PIMS. PIMS data can be described as a guide to help management describe the business a business situation and opportunity relative to the offerings of its competitors in two-dimensional space. TASK 2 BE ABLE TO FORMULATE A NEW STRATEGY Produce an organizational audit for a given organization Tesco Marketing Audit: The marketing audit is a fundamental part of the marketing planning process. It is conducted not only at the beginning of the process but also during and after the process completion. Marketing audit not only consider its own plan but also considers internal and external factor that affects marketing planning. Some important tools used by marketing audit are SWOT for internal and external environment where as PESTLE and Five Forces Analysis which focus only on the external environment. It can be viewed as an umbrella that covers efforts to assess customer needs and wants and to understand community patterns. The external environment is reviewed at micro and macro level. Definition: The marketing Audit has been defined by Phillip Kotler strategic market auditing (1977) as a comprehensive, systematic, independent and periodic examination activities and resources in order to determine problem areas and opportunities and to recommend a plan of action. As per the definition: Marketing Audit is Comprehensive, systematic, independent and periodic features. In simple word marketing audit is the complete review of the environment that includes both internal and external environments of any organization. The marketing audit follows the following areas as components of marketing audit:  · Environmental Audit which includes Macro Environmental Audit and Micro Environmental Audit.  · Marketing Strategy Audit  · Marketing Organization Audit  · Marketing System Audit  · Marketing Productivity Audit  · Marketing Function Audit Processes and techniques used for auditing the marketing auditing environment follows simple three steps are: a) Agreement on objectives, scope and approach: Marketing auditor must prepare for the marketing audit by holding discussion with the CEO and the executive staff and briefly reviewing some financial and marketing data. Often objectives are discussed in the meeting such as determine how the market views the company and its competitors, recommending a pricing policy, determining sale activity. The audit would cover the marketing operations of the company as a whole. b) Data collection: More time is spent on the gathering data. More auditors are involved when the project is large. Auditor has to spent time in deciding what question to be asked, who will be interviewed and so on so forth. Daily reports of the interviews are to be written up and reviewed. c) Report preparation and presentation: When the data gathering is over, auditor prepares notes for a visual and verbal presentation to the company officer. Techniques used for auditing the marketing environments are as follows. 1) SWOT Analysis: It is one of the most important tools of marketing audit. It helps a lot of help to the marketers and is used at the beginning of the marketing audit process. It has advantages as well as drawbacks. Some of the drawbacks are subjective and cannot be relied too much. Therefore it should be used as a guide in the marketing planning and not as a prescription to the process. 2) PESTLE Analysis: Various factors of the marketing is analyzed by PEST analysis that effects upon the marketing process. An organization that is carrying the analysis needs to study the environmental factors that are internal and external. 3) Five Force Analyses: This is an analysis that helps the marketers to have a clear picture of competitors for the market. This analysis has some similarities with PEST analysis. In this analysis the marketer goes through five areas of concerns. Analyze and evaluate the external environment of the organization by using PEST framework, Porters Five Forces model and Product life cycle. Companys profile: Tesco runs more than 2300 supermarkets and convenience stores in the UK, Ireland, Central Europe and Asia. It is operating in almost areas such as gasoline retail (Tesco Express) small urban stores (Tesco Metro) hypermarkets (Tesco Extra) and Financial service (Tesco Personal Finance). It covers up to 35% stake in US grocery. It is the leading online grocery store and is now expanding its business with a TV channel and a retail based education institution. A) A PEST Analysis of the industry was then undertaken to examine the local, national and global influence of political, economic, social and technological factors to understand opportunities and threats well. An assumption was made that most of these ( political, economic, social, legal and environmental ) factors would, to some extent apply to the retail industry in Sweden: Political: Following the European Integration and Free Trade Agreements, the market has opened British Companies to invest in Eastern European. It has 60 stores in Hungary. Lidl is fighting hard to maintain its market share with an aggressive pricing strategy against Tesco. Economic: Retail industry is fairly recession proof and also very sensitive to interest rate. Because of September 11 events, the world economy have suffered heavily, stocks were plummeting and prices are low all time. However the world economy is up after the September 11th attack. Consumers are optimistic and retail industry is once again boosting. Social: There are changes in consumer taste and lifestyle present both opportunities and threats for the retail industry. There are alternative Sweden national retailers which poses additional threats to the Tesco while entering in the Sweden market industry. Technical: Introduction of online shopping via internet is now a common place in retailing. IT system undertakes a paperless operation, the management and administration of the company which are monitored by the secured severs, it provides a flexible base for running the business. Sweden is at the forefront of technologically developed with national companies like Ericsson, hence Tesco gets an advantage of developed logistics and distribution channels already in place. One other tool that will be used in these areas is Porter Five Forces. This model can be used to good analytic effect alongside other models such as the SWOT and PEST analysis tools. Five Forces analyses five important in the determination of competitive power and these are:  · Buyers power:  · Suppliers power:  · Rivalry among competitors:  · Threat of new entrants:  · Threat of substitute product Problems faced by Tesco can be explained by Porters five forces including of the threat of substitutes from other supermarkets, buyer power, supplier power and the power of customer. Buyer power also decides the prices in the market. If products are expensive in Tesco then they will purchase from Sainsbury. This mean market is disciplined which make the pricing is disciplined as well. This in turn stops them to destroy the market in a profit war. Supplier power is an important part of this model. Supplier power is wielded by suppliers demanding that retailers should pay them certain price for their goods supplied. There is always a threat of substitution, although Tesco tries to ensure brand image and quality by having the best value for the products. Tesco acknowledges the fact that there have always been threats from the competitors and new entrants into the markets and therefore always plan to improve upon developments in its stores. Carry out an environmental audit for a given organization: PESTLE (Political, Economic, Social, Technological, Ecological, Legal and Environment) Among the above PESTLE analysis Political, Economic, social and Technological factors are implemented as a technique for the auditing of the marketing environment. Political/ legal:- An environment of marketing at any nation is affected due to the political reasons. There should be the management of change once there is a change in the political condition and situation. The system of nation keeps on changing if there is a lack of stability in politics and the organization should change the marketing strategies as per the changing environment so that the organization can exist in the changing environment. Economic:- Economics plays a vital role in the marketing environment audit. A country with weak economy cannot compete in the international market. To be successful in the marketing there should be a sound financial transaction of an organization. Some of the components of economic factors for environmental audit are: Interest rates, Business cycles, Investment policies. There should be good investment policies for the investment by the nation so that the interest of the investor in investment increases which helps to raise financial stability in the nation. Social and cultural:- Social and cultural refer to the tradition and costumes or belief of people living in a particular geographical region. Social value and norms sometimes becomes the barrier to the marketing environment. There is vast different in the culture and tradition of eastern and western societies as a result of it the culture of eastern may not be suitable for western and vice versa. The marketing depends upon the culture and tradition of any geographical area. S Technological:- In this competitive age technological changes plays a vital role in the marketing. All the developed countries have been successful due to the drastic changes in the technology and their capacity to cope with changing technology. Different technologies can be used for the auditing of the marketing environment. SWOT analysis:- SWOT analysis includes strength, weaknesses, opportunity and threats for an organization. Strength and opportunities are the positive aspect of an organization whereas weaknesses and threats are negative. Similarly strengths and weaknesses are internal environment whereas opportunity and threats are external. Low cost of production and sales, good information about the market and sound finance of the organization are the strengths and lack of communication and low quality of goods are the weaknesses. Similarly lack of competition and expansion of the market is the opportunities whereas control from pressure groups, lack of political and system stability are the threats for any organization. PORTERS five forces model:- It consists of five main points that are listed below: Bargaining power of the customers: It is found in the open or the competitive market where the customer has the advantage over the suppliers or the sellers. A consumer has the choice of quality and the rate and if the supplier fa