Keys To Longterm Market Leadership

The question of wtat accounis ¡or (tie success of loftg-lasting, successful comjjanbes. was addressed in a six-year study by Collins and Ponras called Built to Last. The Staniord researchers identified Wfb companies in each ol t8 industries, one Ihatlheyca'led a-visioiiasy company1 and one thai iney called a 'comparison company." The visionary companies were aftowledged as the industry leaders and widely admired: they set ambitious goals, conrmtmicated Hiam 10 (Heir employees, and embraced a h/gn purpose beyond making money. Tiiey also outperformed the comparison companies by a wide marg'n. The visionary companies included General Eletlrin. Hewlett-Packard, antf Boeing; ite ctwespondintf comparison companies were Wesimghouse, Texas instruments, and McDonnell Douglas

Hie authors found iftree commonalities among the 18 market leaders. First, irre visionary companies each field a rtslinclive set of values from which lliey did not deviaie, Thus, IBM has held lo ihe principles of respect lor the individual, customer Satisfaction, and ecflLiiiwws u^aliiy improvement throughout Ha history; and Johnson S Johnson iiolds lo the principle mat its iirst responsibility is lo its customers, its second to its employees, its ttiird lo its community, and its fourth to as stocwxMets. Tfte ssond commonality it mat vtston-3>y companies express men purpose in enlightened terms. Xerox warns to improve "office productivity? and Monsanio wants to "iielp end Hunger u the world.11 AcoortJ&i Collins and Porras, a com pany's core purpose should not ce contused with specilic business goals or slrategies and should not be simply a description of a companyS producl line. The Wrtt commonality is that visionary companies have developed a vision ol meir fulure and act lo implemeni it. IBM worked at establishing readership as a "network-cenlric" can pany and not simply as a cwuputer msnulacturet.

in Ms neon book. Good to Great. Ceitins provided additional tatghl HO enduring leadership. He delined a 'good-tQ-g'eaC transition as a 10-year lallow period followed by 15 years ol increased prolits. Examining every company ibat ever made the Fortune 500—appfo*' iataiely 1,400—iie lourtd 11 that met itie criteria- AWMtt, Circuit City. Fannie Mae. Gillette. Kimberly-Clark Kroger, Nuoor. Philip r.lcrris, Pitney flcives, Walgreen's, and v/ells Fargo. Coelrasl ng these 11 lo ihe appropriate comparison companies again led lo some clear conclusions. While the compan es ihat achieved greatness were ell in different industries, he found thai «taking the transition from good lo great didn't repute a foghpraii'.e outsvde CEO, cutti-ng'eti^e tecfv oology. or even a fine-tuned business slritlegy per se flallier. what was found lo be the key was a corporate culture mat ideni.'lied and promoted disciplined people so itiink and act in a discipl ncd manner. Leaders with a blend ol personal humility and professional integrity were the most effective, and guotl-lo-gneat compan es were drivel Oy cote values and purpose that went beyond simply ma^ng money.

Sovfos/ James C. Ct^r.n5 and Jerry i Poras, ft.víf to Last. Sutes/ni ttitxis ot Vis&isty CompaH&s ihc.v Kt¡rh: tfarjMr&isiness. 1994]; F. G ¿largas and Robert L. Shook. The IBM Way; Insights Mú A* Wodd'S AtosT successful M&tefing Or^atien (New York: Harper and ffcuv, 1 «861; Jamss C. Collins, ftjMf ffl Urea,'. ISome- GoniJiwws Míftf Leap.. snd Glfiefs D&>n '.f i 'ic^'j Kítrk' Hi-iperOollirs. 2D01■

tliat doesn't tven ral); to the person in charge of TV advertising. - ■ ■ We're threaded lwlisti-tally front global marketing in Korea to the last three feet of the sale." That last three feet is where the"wmv" needs to kick in—when the consumer issiill an aim's length itwayfrom the product, cithei liter ally, in the store, or online."

To Understand marketing management, We must understand strategic planning. Most large companies consist of four organisational levels; ttie corporate level, tfie division level, the business unit level, and the product level. Corporate headquarters is responsible for designing a corporate sirntegic plan 10 guide ihe whole enterprise; it makes decisions on the amount of resources tu til locate to each division, as well as on which businesses to start or eliminate, llacli division establishes a plan covering the allocation of funds to each business unit Within the division. Each business unit develops a Strategic ¡flan to carry that business unit into a profitable future. Mm ally, each product level [product line, brand) within a business unit develops a markeiingpEau for achieving its objectives in its product niarket.

The marketing plan is the central instrument for directing and coordinating;the marketin y effort. The marketing plan operates ai two levels; strategic and tactical. The strategic marketing plan lays out the target markets and the value proposition that will be offered, based unan a ua lysis of die best market opportunities. The tactical marketing plan Specifies the marketing tactics, including product features, promotion, merchandising, pricing, sales channels, and service.

Today, teams develop the marketing plan with inputs and sigji-GfFs from every important function. These plans arc then implemented die appropriate levels of the organisation. Results are monitored, and necessary corrective aciion taken- The complete planning, implementation, and control cycle is shown in Figure 2.4. We next consider planning at eacfi of these four levels of the organization;


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