October 26, 2016

Marketing Warfare - Confronting The Competition in the Market Place


Marketing Management Revision Article Series

Marketing Warfare - Based on the Art of War by Tsuntzu

Paul Hoyt
______________________

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Defensive Warfare


Principles

Principles given by Al Ries and Jack Trout, Marketing Warfare, McGraw Hill, 1986
https://books.google.co.in/books/about/Marketing_Warfare.html?id=5hKvXzoEvIYC

1.  Only the market leader should consider playing defense.

2. The best defensive strategy in marketing is to attack yourself.

3. Strong competitive moves should always be blocked.


Don't spend all your resources in defense. Spend only what is necessary to defend and keep the rest for reserve. Only add more as the intensity of the attack increases.

The goal of defensive warfare is marketing peace.


Offensive Marketing Warfare


Principles

Principles given by Al Ries and Jack Trout, Marketing Warfare, McGraw Hill, 1986
https://books.google.co.in/books/about/Marketing_Warfare.html?id=5hKvXzoEvIYC

1. The main consideration is the strength of the leader's position (it is actually an understanding of the market strength, resources, competencies and capabilities of the leader).

A company want to launch an offensive attack on a leader has to assess the strength of the leader's position in the market.

2. Find a weakness in the leader's strength and attack that point (It means, a weakness which can be attacked successfully by the offensive company).

3. Launch the attack on as narrow front as possible.

Narrow front means attack an individual product.

Remember that odds favor the defender.
Find weakness in leader's largest selling products.
Good offensive ideas are extremely difficult to find. Be prepared to do a lot research to the weakness you can exploit.
You can afford to spend more on an offensive attack because you know the market is there for you to get a share.

Flanking Marketing Warfare


Principles

Principles given by Al Ries and Jack Trout, Marketing Warfare, McGraw Hill, 1986
https://books.google.co.in/books/about/Marketing_Warfare.html?id=5hKvXzoEvIYC

1. A good flanking move must be made into an uncontested area (in the same generic product).

2. Tactical surprise ought to be an important element of the plan.

3. The pursuit is just as critical as the attack itself.

In a flanking move, after you taste success, you have to reinforce it. The best time to build a strong position is in the beginning period of a new product. Flanking is always done with a new product category which is the company is introducing. Hence, if it is successful, more resources must be spent on it to build a strong position. A flanking attack is to earn market share.

Flanking Alternatives

Product category
Low price - no frills product
High price niche product
Small size product - small screen, pocket size
Large size product - Big screen
New distribution channel
New product from - ex: liquid in place of solid, new colors symbolising different things,
Diet products in food items

Guerilla Marketing Warfare

Al Ries and Jack Trout, Marketing Warfare, McGraw Hill, 1986
https://books.google.co.in/books/about/Marketing_Warfare.html?id=5hKvXzoEvIYC


The enemy advances, we retreat. The enemy camps, we harass. The enemy tires, we attack. The enemy retreats, we pursue.  Mao Tse-Tsung.


Trouble a leader, survive, injure a leader, survive, defeat a leader, win.

Guerillas need to have a survival plan. If they survive they can fight the battle once again on a different day. The cost incurred in defeating a guerilla is very high for the opponent.

Al Ries and Jack Trout give the following as principles of guerilla warfare in marketing.

1. Find a segment of the market small enough to defend.

There has to be market from which you can earn revenues. Guerilla marketers may have a diffuse market which the leaders cannot even identify.

2. No matter how successful you become, never act like the leader.

Don't declare victory early. Guerilla strategy and tactics are essentially opposite of what's right for Fortune 500 companies.

3. Be prepared to bug out at a moment's notice.

Whenever you venture into the main visible markets, get out at the first instance of trouble. Conserve your resources.

References

Al Ries and Jack Trout, Marketing Warfare, McGraw Hill, 1986


Al Ries, Jack Trout, "MARKETING WARFARE", Journal of Consumer Marketing, Vol. 3 Iss: 4, 1986, pp.77 - 82


October 23, 2016

The Emergence of Chief Growth Officer

World Class Operations Management


In the global market, world class companies have to deliver performance (customer satisfaction and company profit) that is more than the performance of their strongest competitors. Company has to concentrate on  the efficiency and effectiveness of operations, but also needs to manage the culture for future performance. World Class Operations Management (WCOM) is a significant concept for simultaneous improvement of effectiveness, efficiency and culture.

Traditional manufacturers have not achieved  a balance between efficiency and effectiveness. F.W. Taylor pointed out that, managers and business owners of his time (1885 to 1915) have not developed any understanding of the use of machines and manpower. Therefore, the factory operations were inefficient. He developed methods for improving efficiency and published Scientific Management and Shop Management. Industrial Engineering was started in engineering institutions due to the strong advocacy of Taylor that there is big scope and opportunity for implementing scientific management in engineering organizations by industrial engineers. Larry Miles developed value engineering after world war II. He strongly mentioned that performance (effectiveness) oriented work is only taken care of value (efficiency) oriented work is neglected in the organizations


WCOM (World Class Operations Management): Why You Need More Than Lean


Carlo Baroncelli (https://www.efeso.com/ ), Noela Ballerio
Springer, 19-Apr-2016 - 277 pages


This book deals with World Class Operations Management (WCOM), detailing its principles, methods and organisation, and the results that this approach can bring about. Utilising real-world case studies illustrated by companies that have adopted this model (interviews with Saint-Gobain, L’OrĂ©al, Tetra Pak, Bemis, and Bel Executives), it describes common patterns drawn from decades of hands-on experience, so as to present a theoretical approach together with the concrete application of its principles.

WCOM, adopted by several multinational companies, is one of the more innovative management practises, as it integrates the best Continuous Improvement approaches (Lean, Total Productive Management, World Class Manufacturing) as well as the most innovative approaches in human dynamics like Change Leadership, Performance Behavior, Shingo Model, to name a few.

Maximising reader insights into the successful implementation of such an approach, and explaining not only its potentialities, but also its implementation dynamics, the critical points and the ways it can be integrated into different situations, this book is also about how to create a culture of excellence that is sustainable over a long period of time and delivers consistent (or ever-improving) results.



Operational Excellence: A Concise Guide to Basic Concepts and Their Application


Gilad Issar, Liat Ramati Navon
Springer, 14-Jan-2016 - 194 pages


As industrial companies are placing a higher focus on operations, this book comes at the right time with a compilation of basic concepts of Operational Excellence and their application.

Operational excellence allows companies to recover from reductions in gross margins and low profitability, which largely occur due to a rise in agile competition and the short life span of new technologies. This book helps managers and consulting academicians as a ready reference for cross-industry implementation of operational excellence.
https://books.google.co.in/books?id=odxlCwAAQBAJ

October 19, 2016

Importance of Manufacturing, Construction and Engineering in World Economies



Japan Economy

Industries by GDP value-added 2012.
Based on the exchange rate on April 13, 2013.

Industry GDP value-added $ billions 2012 % of total GDP

Other service activities 1,238 23.5%
Manufacturing 947                         18.0%
Real Estate 697 13.2%
Wholesale and retail trade 660 12.5%
Transport and communication 358 6.8%
Public administration 329 6.2%
Construction 327                           6.2%
Finance and insurance 306 5.8%
Electricity, gas and water supply 179 3.4%
Government service activities 41 0.7%
Mining 3 0.05%
Total 5,268 100%

https://en.wikipedia.org/wiki/Economy_of_Japan


German Economy


The service sector contributes around 70% of the total GDP, industry 29.1%, and agriculture 0.9%. Exports account for 41% of national output.
https://en.wikipedia.org/wiki/Economy_of_Germany

October 12, 2016

GE's Management New Management Initiatives




GE is a company that is used to reinventing itself by implementing new management methods and techniques periodically. It has implemented a strategic focus on simplification over the last several years. The company builds complex products. Employees and customers were noting that the company itself had become too complex: Customer outcomes were slowing as processes grew burdensome. Simplification is now an integrated part of GE’s strategy, encompassing lean management, speed and competitiveness, commercial intensity, and digital capability.

First, GE is asking leaders to implement lean management: remove layers, increase spans of control, and reduce the number of checks and approvals needed to get things done. Wherever there is complexity and duplication, shared activity and services is being advocated. The company is implementing new digital technologies that simplify work and make employees more productive wherever possible.

Second, GE has developed a  program called FastWorks.  FastWorks involves a new way of working that begins with an intensified focus on—and understanding of—customer needs. Experimenting and iterating quickly to create solutions that add value or create value are hallmarks of the approach. FastWorks is being used throughout GE to help teams move faster, bring GE closer to customers, and to maintain a high level of customer input and involvement across the product lifecycle.

Third, GE is promoting belief, and behavioral changes to help leaders and employees reduce complexity and to create a new culture within GE. The culture of simplification is coming to life through a set of new “GE Beliefs,” which are focused on delivering fast, better solutions to customers. The GE Beliefs, created through a crowdsourcing process within GE, are:

Customers determine our success
Stay lean to go fast
Learn and adapt to win
Empower and inspire each other
Deliver results in an uncertain world

The GE Beliefs play are  used to change how GE recruits, how it manages and leads, and how its people are evaluated and developed.

Fourth, GE has recently redesigned its performance management process, with an emphasis on agility, continuous discussions, and customer outcomes. Today,  managers emphasize priorities, helping employees continuously adapt and channel their efforts to the most important customer needs. The old world told people to “do more with less.” Today, GE tells its people to “do fewer things better.”   The focus on simplification is helping employees to focus as well as helping the company to operate faster, compete more vigorously, reduce costs, and improve quality. For GE, simplification is now part of its new culture, as the new behavior is giving positive results. Culture is the result of behavior that leads to positive outcomes.

http://dupress.deloitte.com/dup-us-en/focus/human-capital-trends/2015/work-simplification-human-capital-trends-2015.html

Organizational Health - Introduction - Measurement and Management


The concept of organizational health


The concept of organizational health was first put forward in 1969 by Matthew Miles (Miles, 1969: 376). The relations between the students, teachers and managers in school were defined and observed through a simulation.

Miles suggested a model for organization health analysis of schools, and defined the healthy
organization as follows. “Healthy organization is one that does not survive only in the environment it exists, but also constantly develops in the long term, improves its coping and surviving skills.” (Miles, 1969: 378).

In general, organization health is expressed as the capabilities possessed by an organization to adapt to its environment successfully, create cooperation between its members and achieve its targets.

According to another definition; it is such an organization that supports organizational success, environment, employees’ welfare and happiness with its authority structure, values system, norms, reward and sanction systems.

The Organization Health Dimensions Developed by Miles


According to the model brought forward by Miles, dimensions of the organization health may be summarized as follows (Hoy&Feldman, 1987: 30).

The Task Needs Dimension
1. Objective-Focus: The objectives are easily understandable, acceptable and achievable by the
organization members.

2. Communication Adequacy: An in-organization communication system preventing misunderstandings is available. Thus, the employees access correct information and increase organization efficiency.

3. Optimal Power Uniformity: Distribution of the power within the organization is relatively uniform. They always think that those at lower levels can influence those at the immediate upper level.

• Survival Needs Dimension
4. Effective Use of Resources: Task distribution within the organization is done in the most effective way - neither less nor more than as required. There is a coherence between the demands and needs.

5. Organizational Commitment: The employees like the organization and want to stay there. They are
influenced by the organization, and they make efforts for unity of the organization.

6. Morale: There is employee welfare and team satisfaction in the organization in general.

• Growth and Development Needs Dimension
7. Innovativeness: The organization develops new procedures, sets new targets and constantly develops.
8. Autonomy: It is proactiveness in the organization. It shows several independent characteristics to the outer factors.
9. Adaptation: The organization has the skill of making the necessary changes in itself for growth and
development.
10. Problem Solving Competency: The problems are solved with minimum energy expenditure. Problem solving
mechanism is constantly supported and strengthened.

Organization Health Dimensions Developed by Hoy


Hoy and Feldman examined organization health in seven dimensions. These seven dimensions are as follows (Hoy&Feldman, 1987).

1. Organizational Integrity: The organization’s ensuring integrity in its programs through its capability of adaptation to its environment.
2. Influence of the Organization Manager: The organization managers can influence decisions of the senior system they are subordinate to. The ability to convince their decision organs, having reputation and not being blocked by the hierarchic impediments are important factors of the organization managers.
3. Respect: This involves the friendly, supportive, overt and sincere behaviors exhibited by the organization managers to the employees. Such behaviors are important for increase of performances of the employees.
4. Work Order: This involves behaviors of the organization manager relating to various tasks and achievements. Expectations from the employees, performance standards and polices are clearly expressed by the organization manager.
5. Resource Support: This involves availability of sufficient machinery and equipment in the organizations, and procurement of additional resources when requested.
6. Morale: This is the sum of friendship, openness between the organization members, and the senses of excitement and confidence they feel about the work they do. The employees treat each other tolerantly, they help each other, feel proud of the organization they work in, and completing the works make them happy.
7. Importance of the work: This is about the organizations’ efforts for increasing work excellence. Work is started by setting high but achievable targets for the employees, and production activities are carried out in a serious and orderly fashion.


It is possible to group these dimensions as organization health dimensions at the institutional, managerial and technical level. Accordingly, Institutional Level consists of institutional integrity dimension, Managerial Level consists of the dimensions of work order, respect, influence of the organization manager and resource support, and Technical Level consists of the levels of morale and importance of the work.

Measuring Organization Health



Likewise, people who take their health for granted till some trouble appears, in the organization management also, managers usually do not measure organization health until they encounter a crisis. However, in order to achieve and sustain organizational health, a healthy organization structure should be formed beginning from establishment of the organization, measures should be taken against the problems that may occur, and organization health should be measured periodically. The measuring health of the organizations may reveal some weaknesses, but it may also give some clues to prepare improvement plans based on the obtained results. The organization’s being healthy or unhealthy is an evidence for need of change and innovation. But we need to determe what causes the unhealthy organization structure. Briefly, measurements set the conceptual basics in identification and solution of the problems. The strengths and weaknesses of the organization as well as the opportunities and threats it has are revealed through measurement of organization health.


Characteristics of Healthy and Unhealthy Organizations


It is required to know the characteristics of healthy and unhealthy organization so as to derive the desired benefit from organizational health. In the light of these characteristics, the organization should be analyzed, the revealed data should be interpreted, and solution of the problems leading to the unhealthy structure should be ensured.



                         Table : Characteristics of Healthy and Unhealthy Organizations

Healthy Organizations                                 Unhealthy Organizations
Open to innovation and improvement         Not open to innovation and improvement

Its long term effectiveness is high               Its long term effectiveness is low

Employees are ensured to participate          Employees apply the decisions made by top management
in the decisions
Organizational commitment is developed   Organizational commitment is not developed

Responsible to the environment and employees      Not responsible to the environment and employees

Proactive, takes preventive measures              Reactive, corrective actions are taken

Work stress is low                                        Work stress is high

Work satisfaction and workplace peace       Work satisfaction and workplace peace is low
is high
Importance is attached to employees               Importance is not attached to employees

Number of absences and quits is little            Number of absences and quits is big

Communication between the individuals       Communication between the individuals and top              and top management is strong                        management is weak
 
Worker safety is present,                               Worker safety is not present, work accidents are
work accidents are scarcely encountered      frequently encountered

Employees work with high motivation          Employees work with low motivation
and exhibit high performance                        and exhibit low performance

Unfavorable internal and external                 Unfavorable internal and external environmental
environmental conditions cannot                   conditions can damage the organization
damage the organization
                                               
Team spirit is developed, employees act         Team spirit is not developed,        
with the sense of “us”                                       employees act towards their personal interests

Employees feel themselves safe in the organization     Employees do not feel themselves safe in the organization
Information flow is robust and timely            Robust and timely information flow is unavailable
Strategies are put into practice successfully    Incapable to put strategies into practice
An open, trust-focused and encouraging organization culture is present     A closed, retributive and unfair organization culture is present
Problems are solved by digging                       Evidences of the problem are addressed, the                   into their causes                                                core cause cannot be identified
The organization is efficient and effective       The organization is not efficient and effective
Source: KaragĂ¼zel, 2012: 21 (Turkish paper)



What to do to enhance Organization Health


As in the human organism, healthy structure is hereditary in most of the organizations (Aguire et al., 2005:1).

According to Miles, the following five approaches are very important for increasing the organization health (Miles, 1969: 376):

• Supporting personal development
• Placing importance on communication
• Strengthening information flow
• Establishing an open-to-change organization culture
• Specialist support


The above content is based on:

The Relation Between Organizational Health and Organizational Commitment

Asst. Prof. Dr. Aydan YĂ¼celer, Asst. Prof. Dr. Ăº. Didem Kaya
Necmettin Erbakan University, Faculty of Health Sciences, Konya, Turkey

Dr. Burcu Doøanalp
Selcuk University, Faculty of Economics and Administrative Sciences, Konya, Turkey

Mediterranean Journal of Social Sciences
 MCSER Publishing, Rome-Italy 
Vol 4 No 10
October 2013, pp. 781-788 


Aguire, D. M., L. W. Howell, D. B. Kletter ve G. L. Neilson (2005), A Global Check- Up: Diagnosing The Health of Today’s Organizations,
Organizational DNA Research Report. 

Hoy, W. K., ve Feldman, J. A. (1987), Organizational Health: The Concept and Its Measure, Journal of Research and Development in Education,
20, Summer. 

Miles, M. B. (1969), Planned Change and Organizational Health: Figure and Ground, in F. D. Carver & T. J. Sergiovanni (Eds.) Organizations and Human Behavior: Focus on Schools, New York, McGraw Hill


McKinsey on Organizational Health


McKinsey consultants have given importance to Organizational Health concept in recent days in their consultancy practice.

Organizational health: The ultimate competitive advantage
By Scott Keller and Colin Price
McKinsey Quarterly June 2011 


Organizational Health Index

Organizational health matters more than you might expect.
Leadership in context
By Michael Bazigos, Chris Gagnon, and Bill Schaninger
McKinsey Quarterly January 2016