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others)
Demographic factors and social changes
affecting customers tastes or habits
market that takes into account current and potential developments for
the whole organisation.
Strengths and weaknesses are typically found within an organisation
whereas opportunities and threats are most often outside it. Some factors
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COMPETITIVE STRATEGY
can be sources both of strength and weakness. Take the age of employees,
for example. Older employees may denote a stable organisation able to
retain employees and maintain a wealth of experience, or it may simply
mean that the organisation is too conservative. Some of the most
common areas of strength or weakness are detailed in Table 8.1. All of
these can be either strengths or weaknesses, and they often change from
one to the other surprisingly quickly.
External factors are more difficult to assess than internal ones. Exam-
ples of sources of opportunities and threats are detailed in Table 8.2.
Key questions
Assessing an organisation s competitiveness is a complex, demanding
and continuous task. What matters is the ability to create in the organi-
sation an atmosphere of acute awareness of the market, where people
sense developments and signals and possess the ability to act on them.
Consider the following questions:
How effectively does the business sense developments in the
market? Market sensing goes well beyond market research. At its
core is a determination to derive unique insights into the needs of
customers and the opportunities within markets. It includes:
All actions, formal and informal, systematic and random,
active and passive, engaged in by all members of an
organisation which determine and refine individual or
collective perceptions of the marketplace and its dynamics.2
How well does the business translate market insights into
competitive advantage? Understanding customers and their
shifting needs is difficult. Employees close to the market should
be encouraged to develop their insights by:
 emphasising informal rewards;
 co-ordinating the work of different departments;
 influencing the views, values and overall approach of managers
in the organisation;
 fostering a healthy disregard for industry norms and
encouraging experimentation and learning;
 promoting trust and openness among individuals so that
information and ideas are shared and discussed in an apolitical
manner.
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BUSINESS STRATEGY
What are the main sources of competition (for example, is it
industry rivalry, substitutability or something else)?
How effectively are competitors monitored? Who decides how
and when to respond to competitors, and how effective have
those responses been in the past?
How competitive is your industry, and what is the trend (more
competition or less)?
How competitive is your organisation, and most importantly,
how does it compare with others in the eyes of the customer?
The next chapter builds on these issues, focusing on techniques for
ensuring that commercial decisions reflect market realities and cus-
tomers needs.
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9 Customer focus
nderstanding customers, market developments and technology
Uleads to customer-focused decisions and these, in turn, provide the
most certain route to profitability. However, to realise these benefits
requires a keen understanding of where a market is heading and how
opportunities can be exploited. It is easy to dismiss customer-focused
decision-making as self-evident, whereas in reality it is often difficult to
incorporate customer issues accurately into decisions. Techniques that
help managers achieve this include:
Market sensing
Market segmentation
Data mining
Using the internet for decision-making
Product development
Market sensing
The value of technology in bonding with customers, building loyalty to
products and brands, and improving customers knowledge of products
and services is immense. It can also increase understanding of market
developments, that is, market sensing. The key to competitiveness these
days is to know what each individual customer wants, as opposed to
the broad generalisations about (often arbitrary) market segments made
only a few years ago. Internet systems and customer databases can
help, if they are intelligently designed and used.
Analysing customer data from loyalty schemes and special-offer
promotions can inform decisions that benefit both the business and [ Pobierz całość w formacie PDF ]