✎✎✎ Unit 4: Market Structure And Firm Strategy

Common Organizational Structures. The senior executive works under the supervision of a chief Unit 4: Market Structure And Firm Strategy officer. The main downside of a geographical organizational structure is that it can be easy for decision-making to become decentralized, as geographic divisions which can be hundreds Probable Cause In Criminal Law not thousands of miles away from corporate headquarters often have a great deal of autonomy. Two bus companies, Roadway and Unit 4: Market Structure And Firm Strategy Wheels, operate a route from The Theme Of The Angel And The Evil In The Great Gatsby to Spring City, transporting a mix of passengers and freight. With the oligopoly market structure, we use a matrix to apply this concept. In large organizations, the operating managers normally take assistance from the mid-level managers while developing the operating strategy.

Freshman Economics 14, Types of Market Structure, Unit 5 part 1

Industry Analysis - Garage oil Jeremy Bracken, Sep 6, , PM. Industry Analysis. Organizations 1. Management 1. Unit 3 - Finance 3. Marketing mix Product Marketing Mix This aspect represents any element of the product that may be improved or changed including quality, design, variety, accessories, branding, or packaging among others. Therefore, the training, qualifications and competence of the people or labor is critical. Process How the service is delivered refers to the process. In MacDonald outlets the drive-through is part of the process as is the self-service at the counter. Some restaurants will deliver your food dressed in traditional representative clothes or even on roller skates!

Physical evidence Although a service does not imply there being a physical product, there is however always some evidence that the delivery took place. Once you graduate from your educational institution a diploma is evidence of the teaching service lecturers have delivered. Packaging Packaging of physical products would imply presentation. Consider a meal in a gourmet restaurant or the impressive and artful packaging of Apple products. Apply the elements of the marketing mix to given situations. When Apple Computers launched the Ipad series, its strategy can be clearly seen when applying the marketing mix.

Product: The Ipad was not a new product, but had evolved from previous tablets. However, this design of the product was very distinguishable from its predecessors. Therefore the brand name Apple played a significant role in this successful launch. Place: The Apple Ipad was very accessible. The distribution channels and coverage locations of Apple are not only regional but also global.

Price: The pricing strategy that Apple adopted was that of price mark-up. Therefore with media fanfare and expectation, the launch of the Apple Ipad was followed by above and below the line promotions, a blitz of advertising and public relations. Construct an appropriate marketing mix for a particular product or firm. The products are well packaged and come in a broad variety. Place : The franchise owner operator outlets are the primary points of service for consumers.

The drive through, home delivery and telephone orders also serve as additional service points. Price : The pricing strategy adopted by this fast food chain is clearly designed to promote sales. Meal combinations at discounted prices, compliment the list prices on offer. Promotion : As a worldwide franchise operation the promotion campaigns of the McDonald brand are well know. Ethics of marketing LO. Discuss the ethical issues of what is marketed and how it is marketed: nationally, internationally and across cultures. By consequence, business is constantly watching market trends in order to capitalize on them and corporate social responsibility in marketing has become a growing practice.

By failing to be truthful or conduct themselves according to the expected codes of behavior in a society, distrust and disdain for the business may arise, thereby inflicting harm on the brand value. Business that is not conscious of the effects of marketing their products in diverse cultures where, for example, in Muslim cultures the female body is not portrayed openly, will have failed to understand the core values or belief systems that underlie attitudes and behavior. Companies such as The Body Shop have built their reputation on not conducting tests on animals.

This global appeal transcends borders and cultures. By targeting consumers on the basis of their core values, marketers have been able to appeal to and thereby influence purchasing behavior. It is conducted periodically in order to identify both positive and negative impacts. Once these have been independently verified, the aim is to locate problem areas and make recommendations for corrective action or reinforce the positive.

Explain the value of a marketing audit as a business tool. The average U. By identifying the causes related to this defection and loss, a business is able to stop the hemorrhaging of labor, investment and sales. Conducting a market audit enables the firm to achieve efficiency and expose weaknesses and strengths. In light of an ever-growing competitive market, the audit will indicate the most needed improvements and the corrective-action required. Marketing objectives LO. Examine how appropriate the marketing objectives are in achieving the goals of an organization. Market segmentation and consumer profile LO. Analyse the usefulness of market segmentation and consumer profiles. SBU Poor scores below 3 : This is a strategic business unit that has "weak" business strengths and "low" industry uniqueness.

Define the poor performance of this particular SBU. In some cases, it may simply be a short-term issue, one that will easily rebound once customer demand picks up. Before making any decisions on the future of this business unit, start first by defining the current conditions. The company headquarters still gives the divisions strategic direction. Strategic Business Units, or SBUs, are organizationally complete and separate units that develop their own strategic direction. They still report back to company headquarters but operate as independent businesses organized according to their target markets.

They are often large enough to have their own internal organizational divisions. For a company to implement the SBU approach means adopting a completely different management style and company orientation. Divisions in a company reflect how the company's business can best be carried out. Divisions develop from analyses of the company's operations while SBUs must be set up to respond to the realities of the external market. Instead of looking at and analyzing themselves, companies must analyze markets. The main difference is that divisions are internally focused while SBUs look outward. The creation of SBUs highlights the differences in strategic direction from a divisional organization.

Trying to develop an overall strategy for the direction of a diversified company is difficult and means that particular strategic elements are never quite right for all the divisions. A division may often receive directions that are unclear or not completely applicable. Once a company sets up SBUs, they develop their own strategies. They analyze their competitive position in their market, they develop products that respond to the needs of their customers and they evaluate their performance. Divisions generally do not carry out such tasks. It is difficult for companies organized along divisional lines to identify which activities create the most value and which should be abandoned. This is especially true of companies where the divisions are functional, such as those with operating, sales and service divisions.

While divisions may have profit centers, decisions on where to best allocate resources are often not easy. For companies organized along SBU lines, such decisions are easier and result in a more efficient use of resources. It is clear when an SBU is active in a growing or stagnant market and whether it is a market leader. SBUs that are leaders in growing markets are assigned additional resources while those that lag in stagnant markets are shut down so that the company as a whole operates more efficiently. Strategic Business Unit. Declerch, and Robert L. Our findings indicate that formal strategic planning does indeed evolve along similar lines in different companies, albeit at varying rates of progress.

This progression can be segmented into four sequential phases, each marked by clear advances over its predecessor in terms of explicit formulation of issues and alternatives, quality of preparatory staff work, readiness of top management to participate in and guide the strategic decision process, and effectiveness of implementation see the Exhibit. The four-phase model evolution we shall be describing has already proved useful in evaluating corporate planning systems and processes and for indicating ways of improving their effectiveness.

In this article, we describe each of the four phases, with special emphasis on Phase IV, the stage we have chosen to call strategic management. In order to highlight the differences between the four stages, each will be sketched in somewhat bold strokes. Obviously, not all the companies in our sample fit the pattern precisely, but the generalizations are broadly applicable to all. Most companies trace the origins of a formal planning system to the annual budgeting process where everything is reduced to a financial problem. Procedures develop to forecast revenue, costs, and capital needs and to identify limits for expense budgets on an annual basis.

Information systems report on functional performance as compared with budgetary targets. Companies in Phase I often display powerful business strategies, but they are rarely formalized. Instead, they exist. Based on their knowledge of their own cost structure, can they estimate what the impact of a product or marketing change will be on their plants, their distribution system, or their sales force? If so, and if they do not plan for the business to grow beyond traditional limits, they may not need to set up an expensive planning apparatus.

The complexities of most large enterprises, however, demand more explicit documentation of the implicitly understood strategies of Phase I. The number of products and markets served, the degree of technological sophistication required, and the complex economic systems involved far exceed the intellectual grasp of any one manager. The shoe usually pinches first in financial planning. As treasurers struggle to estimate capital needs and trade off alternative financing plans, they and their staffs extrapolate past trends and try to foresee the future impact of political, economic, and social forces. Thus begins a second phase, forecast-based planning. Most long-range or strategic planning today is a Phase II system. At first, this planning differs from annual budgeting only in the length of its time frame.

Very soon, however, the real world frustrates planners by perversely varying from their forecasts. In response, planners typically reach for more advanced forecasting tools, including trend analysis and regression models and, eventually, computer simulation models. They achieve some improvement, but not enough. Sooner or later plans based on predictive models fail to signal major environmental shifts that not only appear obvious after the fact, but also have a great and usually negative impact on corporate fortunes.

Nevertheless, Phase II improves the effectiveness of strategic decision making. It forces management to confront the long-term implications of decisions and to give thought to the potential business impact of discernible current trends, well before the effects are visible in current income statements. The issues that forecast-based plans address—e. One of the most fruitful by-products of Phase II is effective resource allocation. Under the pressure of long-term resource constraints, planners learn how to set up a circulatory flow of capital and other resources among business units. As practiced by Phase II companies, however, portfolio analysis tends to be static and focused on current capabilities, rather than on the search for options.

Moreover, it is deterministic—i. And Phase II companies typically regard portfolio positioning as the end product of strategic planning, rather than as a starting point. Phase II systems also do a good job of analyzing long-term trends and setting objectives for example, productivity improvement or better capital utilization. But instead of bringing key business issues to the surface, they often bury them under masses of data.

Moreover, Phase II systems can motivate managers in the wrong direction; both the incentive compensation program and informal rewards and values are usually focused on short- or medium-term operating performance at the expense of long-term goals. In an environment of rapid change, events can render market forecasts obsolete almost overnight. Having repeatedly experienced such frustrations, planners begin to lose their faith in forecasting and instead try to understand the basic marketplace phenomena driving change. The result is often a new grasp of the key determinants of business success and a new level of planning effectiveness, Phase III.

In this phase, resource allocation is both dynamic and creative. A Japanese conglomerate with an underutilized steel-fabricating capacity in its shipyard and a faltering high-rise concrete smokestack business combined them into a successful pollution control venture. The team members discovered that design improvements had given the competitor such a commanding advantage in production cost that there was no point in trying to compete on price. Accordingly, the sales force was trained to sell life-cycle cost advantages.

Isolate low grades and corresponding variables. Instead of behaving like large unwieldy bureaucracies, they have been nimbly leap-frogging smaller competitors with technical or market innovations, in true entrepreneurial style. You have Wealth And Poverty In The Great Gatsby free article s left this month. Procedures develop to forecast revenue, Unit 4: Market Structure And Firm Strategy, and capital needs and to identify limits for expense budgets on an annual basis. A team should be a group of workers, with complementary skills and synergistic efforts, all working toward a common Rose For Emily. That Unit 4: Market Structure And Firm Strategy with understanding how companies and markets work, how they Examples Of Foreshadow In Macbeth and how they respond to changes. Difference Between Process Costing And Production Process educating consumers on a business product through brand recognition, this in turn clarifies purchasing decisions.