The essence of strategic corporate planning is to cope with competition. Industry analysis sets the stage for digging deeply into the industry's competitive process such as the sources of competitive pressures, how strong those pressures are, what competitors are doing, and what future competitive conditions will be like. Relevant information and data are to be isolated in the following areas:
What competitive forces exist and how strong are they?What are the relative cost positions of rival companies in the industry? What are the competitive positions and relative strengths of key rivals, what are their strategies, how well are they working, why are some rivals doing better than others, and who has what kind of competitive edge?What moves can key rivals be expected to make?
Competitor information analysis is good for two reasons. First, good corporate planning strategy cannot be formulated in a competitive vacuum. Without adequate understanding of rivals' strategies, efficient and effective corporate planning activity will be difficult. It is impossible to out-manoeuvre business rivals' without adequate information and knowledge about what strategies rivals are using, why some rival have been more successful than others, and what moves rivals firms are likely to make in the future. Second, because rivals' strategies are highly interdependent (i.e. the strategic moves of one rival directly impact on the others and may stimulate counter strategies), the positions and success of competitors have direct relevance to choosing one's own best strategy.
Going through a strategic management job of diagnosing what competitors are doing and predicting what strategic management moves hey may make require systematic and objective collection of strategic management information which will aid rational corporate planning job. Such information pertains to:
What competitive forces exist and how strong are they?What are the relative cost positions of rival companies in the industry? What are the competitive positions and relative strengths of key rivals, what are their strategies, how well are they working, why are some rivals doing better than others, and who has what kind of competitive edge?What moves can key rivals be expected to make?
Competitor information analysis is good for two reasons. First, good corporate planning strategy cannot be formulated in a competitive vacuum. Without adequate understanding of rivals' strategies, efficient and effective corporate planning activity will be difficult. It is impossible to out-manoeuvre business rivals' without adequate information and knowledge about what strategies rivals are using, why some rival have been more successful than others, and what moves rivals firms are likely to make in the future. Second, because rivals' strategies are highly interdependent (i.e. the strategic moves of one rival directly impact on the others and may stimulate counter strategies), the positions and success of competitors have direct relevance to choosing one's own best strategy.
Going through a strategic management job of diagnosing what competitors are doing and predicting what strategic management moves hey may make require systematic and objective collection of strategic management information which will aid rational corporate planning job. Such information pertains to:
- Assessing whether the competitor is under pressure to improve performance.
- Listening to what competitors' managers are saying about likely happenings in the industry.
- Examining the competitors' current competitive strategy and how well it is working
- Studying the background and experiences of the competitor's managers for clues about what moves they may be intending to make, and · Appraising the competitive capabilities of close competitors in terms of their strengths and weaknesses.
SWOT
SWOT is an acronym for a company's internal strengths and weaknesses and its external opportunities and threats. SWOT analysis consists of a candid appraisal of a company. It is a method of diagnosing a firm's overall situation so that future managerial decisions can be made.The diagnostic bent of SWOT analysis is not on identifying just any kind of strengths, weaknesses, opportunities, and threats, but rather on singling out those that are strategy- inclined. SWOT is in effect a distillation of all the steps and considerations that should be of relevance corporate strategy plan with respect to:
Strengths: In this area will be found all the advantageous aspects of the firm. Examples include exceptional customer good will and brand loyalty, highly efficient technical staff, adequate financial resources, and enthusiastic sales force. The strengths represent the foundations on which continued success can be built relative to those of competitors.
Weaknesses: Weaknesses occur in all areas of a firm, some examples of which include obsolescent machinery, no provision for senior management succession, inadequate research and development facilities resulting in lack of new products. What corporate remedies to apply would depend on information available.
Opportunities: while strengths and weaknesses mainly emanate from inside the firm, opportunities are usually external. They may come about through objective and systematic research on the actions of competitors. The important point is that opportunities and related information should be recognised and grasped firmly when they arise. Some examples of opportunities are a new market opening-up which could be filled from existing organisation resources; the opportunity to take over another company which would improve the firm's capabilities, such as a manufacturer taking over a retail chain; or the opportunity to take on a company's management expert in a particular area of specialisation who would improve the firm's performance.
Threats: Like opportunities, threats are most often from outside. Therefore, relevant information to organization's threats must be collected for efficient and effective strategic management job. Though the actual threats to an organization are mostly external, their disadvantageous repercussions on the organization are mainly due to weak or inept corporate management planning. Two very important threats emanating internally include management complacency and inadequate financial management. Managerial complacency results from the assumption that things will always remain as they are and corporate management planners, therefore, have no plans to meet certain changes resulting from competition, technology, and regulations, among others. Some examples of threats to corporate planning actions include changing technology competition (especially from advanced countries), economic and political uncertainty, government rules and regulations, among others. Relevant information should be collected on competitors' perceptions of the impacts of these threats and their likely strategic reactions to these threats. This may be done through bench marking practices.
The advantage of SWOT analysis in corporate planning is that it requires corporate management to look closely and analytically at every aspect of its operations so that objectives can be assessed, information collected on relevant internal and external (controllable and uncontrollable) variables, and corporate planning activities undertaken rationally, systematically, scientifically, and effectively. Every corporate planning strategy must also be examined with care so that the constraints under which corporate planning operations have to be conducted will be recognized.
The kinds of strategic corporate intelligence (information) to be collected about competitors' action are a function of clearly defining the corporate planning activity where the information is to be used. Only after a corporate planning problem has been defined clearly is management in a position to determine what strategic information is needed to make corporate planning decisions. In some cases, the corporate planning decision can be made on the basis of experience and judgement without any systematic assembly of facts on the strategic actions of competitors. Sometimes the needed information for corporate planning decisions is already available, and it is simply a matter of assembling the information and organising it. Also, sometimes, it is necessary to collect and analyse new information and data for corporate planning activities by means of formal research.
Competitor intelligence (information) is important in:
Corporate planners are well advised to collect relevant information on the organic business functions, the controllable and uncontrollable factors of the firm, and more especially the behaviour of competitors. Success in modern business corporate operations in Nigeria is a function of collecting and applying reliable and adequate information on the actions of competitors, among others.
Effective management of information is a prerequisite for successful marketing decision-making. Put simply, the better the information, the better the marketing decision because information reduces uncertainly, and the less uncertainty, the less risky is the marketing decision.
Marketing managers are usually faced with three marketing information related tasks. They must first determine the kind and amount of information necessary for making a correct decision. They must then compare the costs of acquiring this information with its value in reducing uncertainty. Finally, marketing managers must be able to organize, interpret, and evaluate information as it relates to the decision at hand.
Market research is one source of information for the Marketing manager. It can be thought of as a systematic procedure for providing managers with actionable decision-making information. As such, it facilitates project decision-making by providing information that is useful in both the identification and the solution of the marketing problem.
Typically, some marketing managers are not directly involved in the practice of marketing research. Technical functions such as date, collection, sampling, or statistical analysis are more likely to be performed by marketing specialists. Still, it is imperative that the manager be familiar with both the procedures and the techniques of market research. Only this familiarity will enable the manager to ascertain the true value of the information provided by market research.
Because the decision making process directly interfaces with the marketing research process, the manager must be able to evaluate the following:
It would be difficult, if not impossible, to quantity marketing decision making without an organized flow of information. The types of marketing research information available for decisions may be said to consist of knowledge, opinion, and speculation (Jolson and Hise, 1973). When available marketing information is highly confirmed, the information can be called knowledge. If there is little or no evidential backing, this information is called speculation. In between knowledge and speculation a category lies the category for which there is some basis for belief, but which is not sufficiently confirmed to warrant being called knowledge. This category is called opinion, which serves as the foundation for stochastic models, probabilistic approaches, and the Bayesian decision-making method. The degree of uncertainty associated with the outcomes of most marketing decisions is a result of a mixture of all the three information inputs: speculation, opinion and knowledge. Marketing research is a veritable source of useful information for 1, efficient, and effective corporate decisions.
Marketing decisions are most often made in the context of insufficient information about processes that are dynamic, most often unpredictable, Lear, and interdependent. The marketing decision- maker has 3 strategies to use. The specific goals set, the peculiarities of the ament, and the availability of adequate, accurate, and relevant information should determine the particular decision strategy to be pursued.
The marketing management should play an active role in the market research information acquisition process. Specific responsibilities include:
The costs of marketing research information for marketing decisions depend on the means for obtaining it. The best means for getting the nation necessary for marketing decisions depends on the manager's nation requirements, potential or available funds, time constraints, and an appraisal of the usefulness of the information, among others.
Marketing research information decisions has a monetary cost in that acquisition of information must be paid for. Also, information has a time cost in that the time spent to gather information dictates when the decision can be made. An important determinant in evaluating expenditures of money and time for marketing research information acquisition is the value of the information.
Strengths: In this area will be found all the advantageous aspects of the firm. Examples include exceptional customer good will and brand loyalty, highly efficient technical staff, adequate financial resources, and enthusiastic sales force. The strengths represent the foundations on which continued success can be built relative to those of competitors.
Weaknesses: Weaknesses occur in all areas of a firm, some examples of which include obsolescent machinery, no provision for senior management succession, inadequate research and development facilities resulting in lack of new products. What corporate remedies to apply would depend on information available.
Opportunities: while strengths and weaknesses mainly emanate from inside the firm, opportunities are usually external. They may come about through objective and systematic research on the actions of competitors. The important point is that opportunities and related information should be recognised and grasped firmly when they arise. Some examples of opportunities are a new market opening-up which could be filled from existing organisation resources; the opportunity to take over another company which would improve the firm's capabilities, such as a manufacturer taking over a retail chain; or the opportunity to take on a company's management expert in a particular area of specialisation who would improve the firm's performance.
Threats: Like opportunities, threats are most often from outside. Therefore, relevant information to organization's threats must be collected for efficient and effective strategic management job. Though the actual threats to an organization are mostly external, their disadvantageous repercussions on the organization are mainly due to weak or inept corporate management planning. Two very important threats emanating internally include management complacency and inadequate financial management. Managerial complacency results from the assumption that things will always remain as they are and corporate management planners, therefore, have no plans to meet certain changes resulting from competition, technology, and regulations, among others. Some examples of threats to corporate planning actions include changing technology competition (especially from advanced countries), economic and political uncertainty, government rules and regulations, among others. Relevant information should be collected on competitors' perceptions of the impacts of these threats and their likely strategic reactions to these threats. This may be done through bench marking practices.
The advantage of SWOT analysis in corporate planning is that it requires corporate management to look closely and analytically at every aspect of its operations so that objectives can be assessed, information collected on relevant internal and external (controllable and uncontrollable) variables, and corporate planning activities undertaken rationally, systematically, scientifically, and effectively. Every corporate planning strategy must also be examined with care so that the constraints under which corporate planning operations have to be conducted will be recognized.
The kinds of strategic corporate intelligence (information) to be collected about competitors' action are a function of clearly defining the corporate planning activity where the information is to be used. Only after a corporate planning problem has been defined clearly is management in a position to determine what strategic information is needed to make corporate planning decisions. In some cases, the corporate planning decision can be made on the basis of experience and judgement without any systematic assembly of facts on the strategic actions of competitors. Sometimes the needed information for corporate planning decisions is already available, and it is simply a matter of assembling the information and organising it. Also, sometimes, it is necessary to collect and analyse new information and data for corporate planning activities by means of formal research.
Competitor intelligence (information) is important in:
- Personnel functional activities
- Marketing functional activities
- Financial functional activities, and
- Production functional activities.
Corporate planners are well advised to collect relevant information on the organic business functions, the controllable and uncontrollable factors of the firm, and more especially the behaviour of competitors. Success in modern business corporate operations in Nigeria is a function of collecting and applying reliable and adequate information on the actions of competitors, among others.
Effective management of information is a prerequisite for successful marketing decision-making. Put simply, the better the information, the better the marketing decision because information reduces uncertainly, and the less uncertainty, the less risky is the marketing decision.
Marketing managers are usually faced with three marketing information related tasks. They must first determine the kind and amount of information necessary for making a correct decision. They must then compare the costs of acquiring this information with its value in reducing uncertainty. Finally, marketing managers must be able to organize, interpret, and evaluate information as it relates to the decision at hand.
Market research is one source of information for the Marketing manager. It can be thought of as a systematic procedure for providing managers with actionable decision-making information. As such, it facilitates project decision-making by providing information that is useful in both the identification and the solution of the marketing problem.
Typically, some marketing managers are not directly involved in the practice of marketing research. Technical functions such as date, collection, sampling, or statistical analysis are more likely to be performed by marketing specialists. Still, it is imperative that the manager be familiar with both the procedures and the techniques of market research. Only this familiarity will enable the manager to ascertain the true value of the information provided by market research.
Because the decision making process directly interfaces with the marketing research process, the manager must be able to evaluate the following:
- Value of market research based information
- Marketing research information gathering process
It would be difficult, if not impossible, to quantity marketing decision making without an organized flow of information. The types of marketing research information available for decisions may be said to consist of knowledge, opinion, and speculation (Jolson and Hise, 1973). When available marketing information is highly confirmed, the information can be called knowledge. If there is little or no evidential backing, this information is called speculation. In between knowledge and speculation a category lies the category for which there is some basis for belief, but which is not sufficiently confirmed to warrant being called knowledge. This category is called opinion, which serves as the foundation for stochastic models, probabilistic approaches, and the Bayesian decision-making method. The degree of uncertainty associated with the outcomes of most marketing decisions is a result of a mixture of all the three information inputs: speculation, opinion and knowledge. Marketing research is a veritable source of useful information for 1, efficient, and effective corporate decisions.
Marketing decisions are most often made in the context of insufficient information about processes that are dynamic, most often unpredictable, Lear, and interdependent. The marketing decision- maker has 3 strategies to use. The specific goals set, the peculiarities of the ament, and the availability of adequate, accurate, and relevant information should determine the particular decision strategy to be pursued.
The marketing management should play an active role in the market research information acquisition process. Specific responsibilities include:
- Delineating the information requirements by defining the problem to · studied
- Devising the best way to obtain the information
- Determining the amount to spend for the information
- Deciding on the types of analysis and interpretation that will best · solve the problem, and
- Developing actionable decision strategies from the available information.
The costs of marketing research information for marketing decisions depend on the means for obtaining it. The best means for getting the nation necessary for marketing decisions depends on the manager's nation requirements, potential or available funds, time constraints, and an appraisal of the usefulness of the information, among others.
Marketing research information decisions has a monetary cost in that acquisition of information must be paid for. Also, information has a time cost in that the time spent to gather information dictates when the decision can be made. An important determinant in evaluating expenditures of money and time for marketing research information acquisition is the value of the information.
Therefore, the marketing manager must evaluate its accuracy, currency, availability, sufficiency, and relevancy to arrive at a decision about the amount of money and time that should be allocated to obtaining the information.
Since marketing managers must ultimately make a decision based on the information provided by research, they should be involved in specifying the types of analyses performed on the information. For example, a manager of a new product development project should specify how information should be organised. A product manager examining the sales of a product might find it useful to have sales data organised by geographical location of the sale, the type of intermediary selling the product, buyer characteristics amongst others.
A final responsibility of the marketing manager is the development of actionable strategies based on the marketing research information. If the information obtained is not actionable, in that it does not lend itself to effective decision-making, then its costs have exceeded its value. By specifying in advance, either implicitly or explicitly, what various information inputs will lead to in terms of specific actions, the marketing manager can ensure that the entire marketing research information acquisition process is a worthwhile venture.
Since marketing managers must ultimately make a decision based on the information provided by research, they should be involved in specifying the types of analyses performed on the information. For example, a manager of a new product development project should specify how information should be organised. A product manager examining the sales of a product might find it useful to have sales data organised by geographical location of the sale, the type of intermediary selling the product, buyer characteristics amongst others.
A final responsibility of the marketing manager is the development of actionable strategies based on the marketing research information. If the information obtained is not actionable, in that it does not lend itself to effective decision-making, then its costs have exceeded its value. By specifying in advance, either implicitly or explicitly, what various information inputs will lead to in terms of specific actions, the marketing manager can ensure that the entire marketing research information acquisition process is a worthwhile venture.
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