B. Analysing the organisational ecosystem Flashcards
1
Q
who are stakeholders?
A
those persons and organisations that have an interest in the strategy of the organisation
2
Q
what is a strategic network?
A
collection of different organisations that are separate in legal terms but which work collectively to try to achieve long term strategic advantage
- formal arrangements such as joint venture
- simple arrangement on informal basis
3
Q
what is a strategic platform?
A
transfer of goods or services between provider and consumer can take place
modern version is a digital platform
4
Q
what are the different levels of stakeholders?
A
internal, connected and external
5
Q
when does stakeholder involvement increase in mission and strategy?
A
more power and interest
use Mendelow’s to prioritise
6
Q
what are B&D’s ‘actors’ who have an influence on the way an organisation conducts its business
A
Organisation of states
-e.g. WTO, EU
States
-political and geographical e.g. Sweden
Organisations formed by firms
-business org with common agendas
Corporations
-invest in them as commercial vehicles e.g. Ford, BT
Non-governmental org (NGOs)
- explore common agenda, can be International or national
- aka civil society
Mass publics
-large audiences of citizens who express together a common concern about an issue
Knowledge based (epistemic) communities -state, business and NG reps who meet sporadically to share discourse e.g. CIMA
7
Q
what are the sources of stakeholder power?
A
positional power
resource power
system power:high visibility or access relevant to situation
expert power
personal power:communication skills, reputation
8
Q
how can you manage relationships with stakeholder groups?
A
- allocate organisational responsibility for the process of stakeholder management along with a budget
- use a team to manage stakeholders and decide on appropriate management techniques-ensuring a broad range of opinion and expertise
- establish and order the objectives of the organisation. Identify the areas for potential conflict and target resources into those ares
- frequent face-to-face meetings with the key player and keep satisfied
- communication processes for the keep informed and minimal effort groups-possibly via public Q&A sessions
- periodic formal reporting to stakeholders including the use of a website for FAQs
9
Q
what are the 4 ways C&M suggest resolving conflicting stakeholder objectives?
A
satsificing: negotiation between key stakeholders to arrive at a compromise
sequential attention: focus on each stakeholder’s needs in turn
side payments: offer compensation to the stakeholder whose needs are not being met
exercise of power:force a decision
10
Q
what does PESTEL stand for?
A
Political Economic Social Technological Environmental Legal
11
Q
what are the criticisms of PESTEL analysis>
A
- issues identified by a formal PESTEL analysis may quickly become irrelevant. Esp in fast-moving industry
- PESTEL analysis process is prone to bias. Different managers may have different ideas on what the important issues are that need to be included in the analysis
- PESTEL may be incomplete. Can be difficult to correctly identify and understand every environmental issues that might affect the organisation in the future i.e. bounded rationality
12
Q
what is Porter’s 5 forces analysis?
A
- 5 forces an organisation’s industry
- just because an industry is large and/or growing, high profits do not necessarily follow. The dive forces determine profit potential, both for the industry as a whole and for individual firms/SBUs
- strong collective forces give low profitability overall
- individual firm can earn better margins that competitors if it can deal more effectively with key forces
- the model can also be useful to generate ideas for a position analysis-especially threats
13
Q
How can you determine barriers of entry?
A
- which barriers exist
- the extent to which they are liekly to prevent entry
- the organisaion’s poition-it is trying to prevent or attempt entry?
14
Q
what are barriers to entry?
A
economies of scale
capital requirement for entry-high for capital intensive industry such as chemicals, power, mining
access to distribution channels
cost advantages independent of size
expected retaliation
legislation
differentiation
switching costs
15
Q
when is bargaining power likely to be high?
A
when there is a concentration of buyers, particularly if the colume purchases of the buyers are high
16
Q
when is supplier power likely to be high?
A
- when input is important to the buying company
- the supplier industry is dominated by a few suppliers who have secure market positions and are not subject to competitive pressure
- supplier products are branded or involve switching costs
- supplier customers are highly fragmented with little buying power
17
Q
what factors affect the level of rivalry?
A
- extent to which competitors are in balance
- stage of life cycle:during growth stages, all companies grow naturally
- high storage costs may lead to cost-cutting to improve turnover which in turn increases the rivalry
- extra capacity in large increments which means price cuttine may follow to fill capacity
- difficulty in differentiating products leaves the basis for competition on price or augmented product
- high exit barriers mean that some companies must stay in the market
18
Q
what is the conclusion of Porter’s 5 forces analysis?
A
a desirable circumstance would be a situation where there are weak substitutes and buyers, few substitutes with high barriers to entry and little rivalry
19
Q
what are the criticisms of Porter’s 5 Forces model?
A
Porter argues that each of these forces can reduce overall industry profitability and their ‘profit potential’
abandon idea of satisfying customer in favour of a view that sees customers as direct competitors
20
Q
what can the industry/product life cycle graph be used to predict?
A
competitive conditions and identify key issues for management in corporate appraisals and strategic choices
21
Q
what are the key points of the introduction stage of the industry/product life cycle?
A
- it will be purchased by ‘innovators’
- high launch and marketing costs are likely
- production volumes will be low and product costs will be high
- buyers are unsophisticated
- competition is little if any
22
Q
how does price elasticity of demand influence pricing strategy?
A
price skimming is appropriate when the product is known to have a price-inelastic demand
penetration pricing is appropriate where the demand is thought to be price-elastic and when gaining market share is seen as more important than fast recovery of development costs
23
Q
what are pioneer companies?
A
the first to the market with a particular product , are usually forced to sell the concept
24
Q
why is early entry risky?
A
heavy requirement for cash and product idea may fail but early entry allows the prospect of establishing market share and developing first mover advantage
25
what are the key points of the growth stage?
- sales for the market as a whole increase
- new competitors, attracted by the prospects, enter to challenge the pioneer
- new segments may be developed
- demand becomes more sophisticated
- competition levels increase
26
what are the key points of the maturity stage?
- fully sophisticated demand
- high levels of competition
- price becomes more sensitive
- demand reaches saturation. the only way to increase market share is to gain business from competitors or from 'late adopters' or 'laggards'
- it would be desirable to have a high market share at this stage or to have successfully developed a niche
- large market share changes can be difficult to achieve at this stage and most companies would concentrate on defensive strategies to protect their current position and compete hard for the new customers coming into the marketplace
- over time the company must be vigilant to detect and anticipate changes in the market and be ready to undertake product or market modifications with a view to lengthening the life
27
what are the key points of the decline?
- competition reduces as players leave
- price falls to attract business as sophisticated customers expect cheap prices
- slow 'harvesting' must be balanced with straight divestment
- investment kept to a minimum to take up any market share that may be left by departing competitors
- there may be profitable niches remaining after industrial death
28
What are some considerations of the product/industry life cycle?
- offer a range of products at various stages of the life cycle-mature products will fund the development of new products
- competencies need to change-at the early stages, creativity and innovation are key whilst at later stages efficiencies and low costs become important
- life cycles are difficult to predict, can change quickly and will vary from one product to another. turning points are very hard to predict
- management anticipation of decline can cause decline! Reduction in investment and advertising can cause the appropriate market response
- SWOT varies across the life cycle
- strategies will need to change as the organisation progresses through the life cycle
29
what is the usefulness of the life cycle model?
improved strategic planning
improved budgeting
proactive approach
30
what does competitor analysis seek to do?
- provide an understanding of the comapny's competetive advantage/disadvantage
- help generate insights inot competitors strategies
- give an informaed basis for developing future strategies to sustain/establish advantages over competitors
31
what 3 purposes of competitor analysis does Grant highlight?
- to forecast competitors' future strategies and decisions
- to predict competitors' likely reactions to a firm's strategic initiatives
- to determine how competitor behaviour can be influenced to make it more favourable for the organisation
32
what are the 3 steps for competitor analysis?
1. identify competitors
- brand competitors
- industry competitors:similar products but different segments
- form competitors:sell products that satisfy the same need as ours though technically very different
- generic competitors compete for the same income e.g. home improvements and golf clubs
2. analyse competitors
- objectives
- strategy
- assumptions
- resources&competencies
all contribute to predictions
3. develop competitor response profiles
- laid back:does not respond
- selective:reacts to attack in only selected markets
- tiger:always responds aggressively
- stochastic:no predictable pattern exists
33
why enter foreign markets?
PRESSURE from shareholders to increase their ROCE
SATURATED domestic markets making home expansion difficult
OPPORTUNITIES as emerging markets arise with increases in economic income and spending power. Advances in technology, such as the internet and cloud computing, means recognising and exploiting such opportunities becomes more viable
TRADE BARRIERS COMING DOWN enabling competitors to compete in our domestic markets as well as increasing the opportunities for our company overseas
34
what are the risks arising from entering global markets?
marketing mis adaptions:modifications, cultural implications and potential costs
cultures vary
varying cost structures:quality of production factors, sufficiently skilled labour and management to enable global strategy
different competitive levels will exist in different markets
exchange rate volatility:control systems to protect company
different economic situations
political involvement
political situation:war, terrorism, government stability
entry requirements
35
what are the benefits of entering global markets?
EO:R&D, bulk-buying discounts available as the volume of our purchases and our reputation increases
management opportunity is increase and may prove motivational to certain types of managers
challenge to the traditional home cultural perspective
cheaper sources of raw materials and labour may allow competitive advantage
market development as the emerging markets bring a whole new range of consumers who will be embarking on their 'first buy' and so may not be as 'fussy' as consumers ina saturated market
risk reduction via portfolio spread
political sponsorship through national governments keen to boost local economy
political power becomes possible as the company grows in size and is seen to be contributing to wealth creating as opposed to exploitations of the nation concerned
36
what does Porter's diamon model suggest?
reasons why some nations are more competitive than others and why some industries within nations are more competitive than others;
- the organisation can understand what, if any, factors have caused it to be successful in its current country or countries of operation
- the model can be used by the organisation to assess whether a particular country is suitable for expansion into
- governments can identify how to adjust their policies in order to attract or stengthen certain industries
37
what are the factor conditions?
supply side factors that convey an advantage
provide initial advantage which is then subsequently built upon to develop more advanced factors
basic factors are unsustainable as they are easily copies (unskilled labour) whilst advanced factors can convey the advantage as they are less easy to emulate (scientific expertise)
these usually include human, physical, knowledge, capital and infrastructure
38
what are the demand conditions?
sophisticated home demand can lead to the company developing significant advantages in the global marketplace
demanding customers set high standards can provide valuable input to new strategic initiatives
-Japanese customers have high expectations of their electival products which forces producers to provide technically superior product for the global marketplace, developing sophisticated markets
39
what are the related and supporting industry?
the value chain and system
advantage conveyed by the availability of superior supplier industries e.g. Italy has a substantial leatherwear industry which is supported by leather-working plants and top fashion and design companies
40
what are the strategy, structure and rivalry?
the competition element
different nations have different approaches to business in terms of structure and the intensity of rivalry that can take place
domestic rivalry can keep the org 'lean and mean' so that when they go out into the global marketplace, they can compete more successfully with the less capable foreign competition
governemnts can promote this rivalry via policy
41
according to Porter, how can countries produce world-class firms?
the role of government-subsidies, legislation and education can all impact on the other four elements of the diamond to the benefit of the industrial base of the country
the role of chance events-wars, civil unrest, chance discoveries and others can also change the four elements of the diamond unpredictably
make markets more appealing
42
what are the criticisms of Porter's diamond model?
- looked at 10 developed countries so only applied to developed economies
- argues that inbound foreign direct investment does not increase domestic competition significantly because domestic firms lack the capability to defend their own markets and face a process of market-share erosion and decline. However, there seems to be little empirical evidence to support that claim
- Porter model does not adequately address the role of multi-national corporations. Ample evidence that the diamond is influenced by factors outside the home country
- Porter analysis focused on manufacturers, banks and management consultancy firms. Some have questioned its relevance to service-based companies
- Porter's focus is on the domestic country rather than which foreign markets have been targeted. A careful choice of target is essential to ensure that the firm has the competences required for success
- not all firms from a given country are successful, suggesting that corporate management is more important than geographical location
43
what is a supply chain?
all activities and information flows necessary for the transformation of goods from the origin of the raw material to when the product is finally consumed or discarded
44
what is the difference between an upstream anddownstream supply chain?
upstream: between business and suppliers
downstream: between customers and business
45
why can businesses no longer only consider their immediate customers and suppliers?
the problems in the organisation ecosystem can have a significant impact on the business
46
what is the difference between a pull and push system?
pull:demand driven, use electronic connections to pull what is needed, less inventory e.g PCS,
Push:try to sell supplies
due to e-commerce capabilities, moving from traditional push model to pull
47
what does managing the supply chain from node to node usually include?
- production planning
- purchasing
- materials management
- distribution
- customer service
- forecasting
48
what is a supply strategy likely to take into account?
sources
number of suppliers
cost, quality and speed of delivery
make or buy and outsourcing
antagonism or partnership
49
what are some antagonistic relationships that affected the supply chain?
- purchasing function sought out the lowest-price suppliers, often through a process of tendering, the use of 'power' and the constant switching of supply sources to prevent getting too close to any individual source
- supplier contracts featured heavy penalty clauses and were drawn up in a spirit of general mistrust of all external providers
- the knowledge and skills of the supplier could not be exploited effectively:information was deliberately withheld in case the supplier used it to gain power during price negotiations
50
what is a partnership in supply chains?
new model of supplier networks
collaboration an offers benefits to an organisation's suppliers as well as to the organisation itself
can work together to make a much better job satisfying the requirements of their end market and this can both increase their market share
51
why do organisations want to be part of supplier or customer partnerships?
- enter partnerships with key customers and suppliers to better understand how to provide value and customer service
- orgs produced design processes include discussions that involve both customers and suppliers. By opening up design departments and supply problems to selected suppliers a synergy results, generating new ideas, solutions and new innovative products
- to enhance the nature of collaboration the organisation may reward suppliers with long-term sole sourcing and a commitments to ongoing improvements of materials, deliveries and relationships
52
what factors should SLAs include?
- detailed explanations of exactly what service the supplier is offering to provide
- the targets/benchmarks to be used and the consequence s of failing to meet them
- expected response time to technical queries
- the expected time to recover the operations in the event of a disaster such as a systems crash, terrorist attack etc
- the procedure for dealing with complaints
- the information and reporting procedures to be adopted
- the procedures for cancelling the contract
53
what is e-procurement?
procurement:covers all the activities needed to obtain items from a supplier:the whole purchases cycle
e-procurement is therefore used to describe the electronic methods used in every stage of the procurement process, from the identification of the organisation's requirements through to payment
54
what is e-sourcing?
electronic methods for finding new suppliers and establishing contracts
- save administrative time and money
- can enable companies to discover new suppliers
- source more easily from other countries
55
what does issuing electronic invitations to tender and requests for quotations reduce?
- adminitration overheads
- potentially costly errors, as the re-keying of information is minimised
- the time to respond
56
what is e-purchasing?
covers product selection and ordering
- reduces overheads through spending less on administration time and cutting down on bureaucracy
- transfers effort from a central ordering department to those who need the products
57
what are the features of an e-purchasing system?
- electronic catalogues for core/standard items
| - recurring requisitions/shopping lists for regularly purchased items
58
what is e-payment?
includes tools such as electronic invoicing and electronic funds transfers
makes payment processes more efficient for both the purchaser and supplier, reducing costs and errors that can occur as a result of information being transferred manually from and into their respective accounting systems
efficiency savings can result in cost reductions to be shared by both parties
§
59
what are the specific applications that come from e-procurement?
EDI: electronic data interchange involves the organisation linking its systems to those of its suppliers, allowing for faster and more efficient paperless ordering. Can improve the speed and accuracy in the fulfilment of orders
Use of the Internet:the organisation can use the Internet to shop around to ensure that they are using the most reliable, cost effective suppliers
Disintermediation:the organisation may be able to buy its supplies online directly from n earlier stage in the supply chain e.g. from a wholesaler rather than a retailer which could help the business to save money
60
what are the benefits of e-procurement?
- labour costs will be greatly reduced
- inventory holding costs will be reduced. Not only should overstocking be less likely, but if orders are cheap to place and process, they can be places much more frequently so average inventories can be lower
- production and sales should be higher as there will be fewer stock-outs because of more accurate monitoring of demand and greater ordering accuracy
- the firm may benefit from a much wider choice of suppliers rather than relying on local ones
- greater financial transparency and accountability
- quicker ordering, making it easier to operate lean or JIT manufacturing systems
- there are also considerable benefits to the suppliers concerned, such as reduced ordering costs, reduced paperwork and improved cash flow, that should strengthen the relationship between the firm and its suppliers
61
what are the potential risks of e-procurement?
- technology risks where it will not function properly. Interface issues
- organisational risks. Staff might be reluctant to accept the new procurement methods
- no cost savings realised. Difficult to predict all the benefits that can arise. Tangible benefits are relatively easy to forecast. Intangible benefits such as service and reputation are very difficult to estimate with any accuracy
62
what are some other uses of technologies within the upstream supply chain?
communication-email and other IT-based communication allow for more rapid communication with all parts of the upstream supply chain
information gathering-gathering and processing information on the upstream supply chain that may impact on the organisation is easier than to the internet
extranets-allows the organisation to grant suppliers access to information that can help enable aid collaboration (such as co-ordination of production and inventory levels) as well as joint development of products
big data-collecting and interrogating data on those involved int he upstream supply chain network can help organisations to manage better the product offering and thereby differentiate themselves in the market
blockchain-can create much greater confidence over the entire supply chain as the data relating to transactions is more secure and cannot be altered by just one party in isolation
cloud computing-liaising with upstream suppliers via the use of cloud computing has the benefits of greater speed in information flow and also added security
63
How does Tesco use Big Data?
use Big Data to monitor weather forecasts and feed information back to suppliers on likely requirements for the immediate future
e.g. cold spell of weather is soon to be followed by warmer temperatures, meats for bbqs
64
How does Soil Association use blockchain technology?
process whereby customers are able to identify how food has gone from the original producer to the shelf with confidence in accuracy of data
organic certification can be traced through the supply chain
65
what is downstream supply chain management?
activities that the organisation undertakes to manage its relationship with its chain of customers
66
what are the main features of industrial buyers?
motivation
- satisfy needs of the organisation rather than individual needs
- usually repeat orders when the stock of items has fallen below a certain level and thus the buying motive is clear
- profit target may mean the buyer placing an emphasis on cost minimisation
- growth target expressed in terms of sales motivates a purchase that will promote that goal
influence of the individual or groups
- purchase may be made by an individual or group
- buying on behalf of the organisation but the buying decision may be influenced by the behavioural complexion of the individual or group responsible
- behavioural complexion will be influenced by the same influences on consumer buyers already discussed
general organisational influence
- have its own procedures and decision-making processes
- personal relationships with the buyer will often be very important
reciprocal buying
-buy from customer if they agree to buy from you
purchasing procedures
- more formal process: written quotations, written tenders and legal contracts with performance specifications may be involved
- form of payment may be on credit terms, leasing or barter arrangements
size of purcahses
-purchases by an industrial buy will tend to be on a much larger scale
derived demand
- demand for industrial products is generally derived from consumer demands
- cut back when downturn predicted
67
during customer analysis, how does industrial segmentation take place?
geographic-basis for sales-force organisation
purchasing characteristics- classification of customer companies by their average order size, the frequency with which they order
benefit-industrial purchasers have different benefit expectations from consumers/ They may be oriented towards reliability, durability, versatility, safety, serviceability or ease of operation. They are always concerned with value for money.
company type-industrial customers can be segmented according to the type of business they are i.e. what they offer for sale.
company size-frequently useful to analyse marketing oppurtunities in terms of company size.
68
qwhy is it critical to understand why buyers purchase an org's goods or services?
enables an organisation to identify critical success factors in markets
69
what is ?
70
what are the consumer market components of consumer behaviour?
cognitive dissonance
- when an individual's attitudes and behaviour are inconsistent
- regret when a product has been bought and feel something else would have been preferable, will switch brands
- marketing team must persuade customer
personality and product choice
- products and their brand names acquire attributes in the minds of the potential customer due to branding
- when considering goods and services for a purchase, customers will invariably select those that have an image consistent with their own personality and aspirations
influence of other people
- -reflect the values of their social and cultural environment
- form of products and services for sale has been determined by that environment
71
what are the important factors of consumer segmentation in customer analysis?
psychological
- divided into groups sharing common psychological characteristics
- security-oreinted or ego-centred
- useful in the creation of advertising messages
- recent trend of combining psychological and socio-demographic characteristics to give a more complete profile of customer groups (lifestyle segmentation)
purchasing characteristics
-segmented by the volume they buy (heavy/medium/light/non-user)
may be segmented by the outlet type they ise or by the pack size bought
useful in planning production and distribution and in developing promotion policy
demographic
- defined in terms of age, sex, socio-economic class, country of origin or family status
- most widely used forms of demographic segmentation in the UK are the socio-economic classification based on class and the lifestyle model
geographic
- region for sales and distribution purposes
- many consumer goods manufacturers break down sales by television advertising regions
benefit
- different expectations of a product
- even within the same product class, different brands offer different perceived benefits
72
what are the uses of technologies in customer analysis?
use of social media
- content is disseminated to other users across social platforms can be assessed by the organisation
- can be assessed by means of variables such as the number of retweets on Twitter, or the shared likes on Facebook
- products or marketing campaigns which do not achieve results in such variables can be changed or removed from the business portfolio
big data
-data can be collected and interrogated on those in the downstream supply chain network to result in product or service offering that matches greater the demands of customers and consumers
73
How did Time Warner use Big Data?
using Big Data to track which types of media customers are watching and when
can help manage bandwidth and therefore optimise the customer experience
company also uses sophisticated systems to integrate public data such as voter registration and property recored with local viewing figures
enables targeted marketing campaigns by Time Warner's advertising clients
74
what are Payne's 6 market models for marketing?
customer markets-direct customers and consumers of products
referral markets - the people or organisations that refer customers to us
supplier markets - suppliers we partner with
recruitment markets -providers of staff
influence markets -public relations
internal markets -internal departments
75
what is relationship marketing?
examines the overall approach to marketing that the organisation can adopt
maintaining and exploiting the firm's customer base as a means of developing new business opportunities
76
what factors can customers be lost by?
- unhelpful staff
- poor quality of service
- inappropriate prices
- lack of customer care
77
how is traditional marketing different to relationship marketing?
concentrates on products vs concentrates on retention and loyalty
little knowledge of customer vs considerable customer commitment
product quality a key issue vs considerable customer contact
little effort on customer retention vs emphasis on quality service
focus on single sale vs focus on building long-term relationships
focus on product features vs important of customer benefits
78
what are the 2 techniques for customer acquisition?
traditional off-line techniques e.g. advertising, direct mail, sponsorship
rapidly-evolving on-line techniques e.g. e-marketing
79
what are some examples of e-marketing?
search engine marketing
online PR
online partnerships
interactive adverts
opt-in e-mail
viral marketing
80
what are some examples of search engine marketing?
- search engine optimisation:improving the position of a company in search engine listings for key terms or phrases
- pay-per-click(PPC):an advert is displayed by search engines as a 'sponsored link' when particular phrases are entered
- trusted feed:database-driven sited such as travel, shopping and auctions are very difficult to optimise for search engines and consequently haven't enjoyed much visibility in the free listings. Works by allowing a 'trusted' third party, usually a search engine marketing company, to 'feed' a website's entire online inventory directly into the search engine's own database, bypassing the usual submission process
81
what are some examples of online PR?
media alerting services-using online media and journalists for press releases
portal representation-portals are websites that act as gateways to information and service. They typically contain search engines and directories
business blogs (effectively online journals) can be used to showcase the expertise of its employees
community C2C portals (effectively the e-equivalent of a village notice board_ e.g. oil company set up a discussion forum on its website to facilitate discussion on issues including pollution
social media-platforms such as Facebook and Twitter are often used to get news about the organisation into the public domain and to respond to stories in which it features
82
what are some examples of online partnerships?
link-building-reciprocal links can be created by having quality content and linking to pother sites with quality content. The objective is that they will then link to your site
affiliate marketing-a commission-based arrangement where an e-retailer pays sites that link to it for sales.
sponsorship-web surfers are more likely to trust the integrity of a firm sponsoring a website than those who use straight advertising
co-branding-a lower cost form of sponsorship where products are labelled with two brand names.
aggregators-there are comparison sites allowing customers to compare different product features and prices.
83
what are some examples of interactive adverts?
banners-banners are simply advertisements on websites with a click through facility so customers can surf to the advertiser's website
rich-media-many web users have become immune to conventional banner ads so firms have tried increasingly to make their ads more noticeable through the use of animation, larger formats, overlays
some ads more interactive and will change depending on user mouse movements, for example generating a slide show
84
what are opt-in emails?
80% are estimated to be spam/viruses but email marketing can still deliver good response rates
options for email:
- cold rented lists:here the retailer buys an email list from a provider such as Experian
- co-branded email:e.g. bank sends email advertising a mobile phone
- 3rd part newsletters:the retailer advertises itself in a 3rd party's newsletter
- house list e-mails:lists built up in-house from previous customers
85
what is viral marketing?
where e-mail or social media platforms are sued to transmit a promotional message from one person to another
-ideally the viral ad should be a clever idea, a game or a shocking idea that is compulsive viewing so people send it to their friends
86
what is CRM?
customer relationship management consists of the processes a company uses to track and organise its contacts with its current and prospective customers, with particular emphasis on software-based apporaches
87
what is CIMA's definition fo CRM?
a culture, possible supported by appropriate information systems, where emphasis is places on the interfaces between the entity and its customers. Knowledge is shared within the entity to ensure that the customers receives a consistently high service level
88
how can CRM systems help achieve higher profuts?
retaining existing customers is cheaper than trying to win new customers
89
what is a marketing audit?
a particular form of position audit which focuses on the products of the firm and the relationship it has with customers
- gives a company a deeper understanding of the wider organisational ecosystem market it operated in
- strategies it will need to implement in order to gain competitive advantage
- position within that ecosystem and its USP
90
what are the normal stages in a marketing audit?
1. Define the market
2. Determine performance differentials:segments, entry point
3. Profile the strategies of competitors:know your enemy, identify
4. Determine the strategic planning structure:marketing effort
91
what is the SERVQUAL approach?
```
tangibles
reliability
responsiveness
assurance
empathy
techniques for retaining customers
```
92
what are tangibles factors of the SERVQUAL approach?
- considers the appearance of physical facilities, equipment, personnel and communications
- for online quality, the appearance and appeal of websites and the social media presence and usage, will determine to what extent customers will consider their interaction with the organisation useful and engaging. Customers will revisit websites that they find appealing and interact with the organisation more if its social media presence serves a purpose for them
- this can include factors such as structural and graphic design, quality of content, easy of use of their social media feeds and instant updates are critical. Multi-media content, such as graphics and videos will also be an important element of the customer experience
93
what are reliability factors of the SERVQUAL approach?
- reliability is the ability to provide a promised service dependably and accurately and is usually the most important of the different aspects being discussed here
- for online service quality, reliability is mainly concerned with how easy it is to connect to the website and social media platforms. Specially developed apps for smartphones that are free of glitches can enhance the consumer experience, as well as being an increased source of information about the organisation
- reliability will also be assessed on the basis of the content and how accurate it is-the phrase 'fake news' has become an everyday part of the English language
- if websites are inaccessible some of the time and/or emails are bounced back, then customers will lose confidence in the retailer
- equally, given the increasing usage of many customers (particularly those who have grown up during the digital era) to interact with organisations using social media, it is vital that these channels be available and updated at all times
94
what are responsibeness factors of the SERVQUAL approach?
looks at the willingness of a firm to help customers and provide promt service
- in the context of e-business, excessive delays can cause customers to 'bail-out' of websites and /or transactions and go elsewhere
- could relate to how long it takes for e-mails to be answered or even how long it takes for information to be downloaded to a user's browser
- equally, a failure to respond to a tweet could be interpreted as a lack of concern at a customer issue. Twitter feeds will need to be monitored around the clock
95
what are assurance factors of the SERVQUAL approach?
assurance is the knowledge and courtesy of employees and their ability to inspire trust and confidence
- for an online retailer, assurance looks at two issues-the quality of responses and the privacy/security of customer information
- quality of response includes competence, credibility and courtesy and could involve looking at whether replies to e-mails are automatic or personalised and whether questions have been answered satisfactorily
- again, the issue of fake news on social media could be seen as an assurance issue
96
what are empahty factors of the SERVQUAL approach?
empathy considers the caring, individualised attention a firm gives its customers
- most people would assume that empathy can only occur through personal human contact but it can be achieved to some degree through personalising websites and emails
- key here is whether customers feel understood.
97
what are the techniques used to retain customers in the SERVQUAL approach?
personalisation- individualised content
mass customisation-delivering customised content to groups of users thorugh web-pages or e-mail
extranets-e.g. Dell computers uses an extranet to provide additional services to its 'Dell Premier' customers
opt-in email-asking customers whether they wish to receive further offers
online communities-firms can set up communities where customers create the content. Could be focussed on purpose, positions, interest or profession
customisation of social media content that feeds through to your profile
98
How did North Face personalise the shopping experience?
invested in AI to try to deliver a better and more personalised customer experience
- important for online transactions
- customer asked where they are going, time of year and what activities they will do
- personalised response based on weather conditions of answer
99
what is customer extension?
has the objective of increasing the lifetime values of a customer and typically involved the following:
- resell similar products to previous sales
- cross sell closely related products
- up sell more expensive products
- having bought a book from Amazon, you could be contacted with offers of other books, DVDs or DVD players
- reactive customers ho have not bought anything for some time
100
what is propensity modelling?
evaluating customer behaviour and then making recommendations to them for future profucts
- create automative product relationships e.g. which are bought together
- using trigger words or phrases e.g. customers also bought
- offering related products at checkout e.g. batteries for electronic goods
101
what are the uses of technologies in downstream supply chain management?
Electronic Data Interchange (EDI) - the business can link its sales system to the purchasing system of its major customers, increasing the speed and efficiency of placing orders. Can act as a tie-in/switching cost as it is likely to make it harder for the customer to leave and move to a rival supplier, as this would lead to expense and disruption
Cloud computing-keep customer updates in real time
E-commerce-sell online to customers. May also allow disintermediation
Intelligence gathering-through monitoring of online transactions, online surveys
Communication-emails and other IT systems will allow us to keep in touch with customers
User communities -allow users to support each other
The use of intranets and extranets- to share information within the organisation as well as allowing partnerships with suppliers and customers
102
whats is an intranet? what is an extranet?
intranet: private network within a single company using Internet standards to enable employees to share information using e-mail and web publishing
extranet: extending an intranet beyond a company to customers, suppliers and other collaborators
103
what are the benefits of using an extranet?
information sharing in a secure environment
cost reduction:eliminate need to re-key information from paper documents
order processing and distribution
improved customer service:can be improved through easier/quicker access to information, increased accuracy and consistency of information and quicker response times. Together these build customer confidence and may result in increased revenue
104
What are the 3 main ways in which technologies can affect an organisation's relationship with its customers?
disintermediation-remove intermediate stages from the supply chain
reintermediation-the creation of new intermediaries in the supply chain
countermediation- creation of new intermediaries in the supply chain in response to rivals doing the same
105
how are corporate mission, CSFs and KPIs linked?
mission translates into CSFs which are measured using KPis
106
what does the internal environmental analysis look for?
the strengths and weaknesses of the organisation
107
what does the external environmental analysis look for?
the oppurtunities and threats that the organisation needs to be aware of
108
what is SWOT analysis?
tool to assis the position audit process
109
who will usually undertake a position auditing in a firm?
a team with a pre-set budget, objectives listing and support functions
management accountant will be involved with delivering and monitoring the information flows into the process
110
what will the position audit seek to identify?
threats focusing on weakness
- usually top priority
- requires defensive response
threats focusing on strength
-review of the supposed strength to ensure that it is still as strong
opportunity focusing on strength
-change to develop strategic advantage
opportunity focusing on weakness
-whether to change or pursue the opportunity
should also seek to find out what will happen if NOTHING is done as this is also a strategic option
111
what is position auditing designed to allow?
- identification of the current issues relating to the organisation concerned
- analysis and identification of the relevant problems facing the organisation
- consideration of the strategic capability of the company and its history
112
what are examples of value drivers?
- state of the art production facilities
- distribution facilities that are placed to improved efficiency
- raw materials that are either better quality or cheaper than those used by the rivals
113
what are value drivers?
anything that can be used to create additional value to a consumer in respect of the product or service that the organisation deals in
114
why should greater importance be placed on intangible drivers of values?
harder to replicate
tangible drivers can be copied over time by rivals
115
what are examples of intangible value drivers?
- brands
- intellectual property and patents
- relationships with customers
- relationships wit suppliers
- employees
- reputation
- know-how
116
Why was Tesla's value higher than Ford even though they reported having no profit?
value attributed was derived from its technological know-how and ability to produce electric cars better than rivals
value in charismatic founder
