Marketing And Strategy

Posted by 17 March, 2008
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MARKETING AND STRATEGY
Using Tested Concepts and New Ideas for Marketing Strategy.

 

If the purpose of strategy is to gain competitive advan­tage, then by implication theories of strategy should be continually in flux. Any new insight that obtains wide currency. . . loses value in providing additional com­petitive advantage . . . This self-destructive aspect of strategic insight. . . has received limited attention, as has the attendant need to be continually innovative and creative.

Paul Schoemaker,
Graduate School of Business.
University of Chicago

If there’s a hell for planners, over the portal will be carved the term “cash cow.”

Stephen Hardis,
Vice President of Planning,
Eaton Corporation


If theories of strategic planning should be “continually in flux,” as Paul Schoemaker observes in the first of our opening quotes, then all is well with the world, Because there cannot be any field more turbulent or unstable in the entire management panoply than strategic planning and its alter ego, marketing planning.
“Strategic planning is dead; long live strategic planning!” seems like an appro­priate way to begin this lesson, for it is necessary both to mark the passing of the old strategic planning and to note the exciting emergence of entirely new approaches, much as the succession of kings was once heralded. But the problem is, nobody seems quite sure who the rightful heir to the throne will be.
Since its birth in the 1950s and 1960s, strategic planning reigned by giving managers a new and exciting set of more marketing-oriented tools for analysis, plan­ning, and control. Innovators such as the Boston Consulting Group and General Elec­tric discovered the wisdom of identifying opportunities based on market analysis rather than solely on financial analysis, and their philosophy and techniques spread rapidly throughout the 1970s and into the 1980s. But strategic planning’s growth stalled in the 1980s, with many companies abandoning their large planning staffs and forsaking more complex analytical methods and planning processes, and by the begin­ning of the 1990s, it was moribund. When Gary Reiner of the Boston Consulting Group wrote in 1989 that “planning is passé,” it was clear that a succession was immi­nent. The problem was that the old king had left no legitimate offspring, so managers must find their own. They face the daunting task of planning in the face of great un­certainty and rapid change, and without any simple prescriptions guaranteed to do the trick. As Michael Porter of the Harvard Business School sees it, “The state of practice in this area is very primitive.”
What has replaced the orderly strategic planning cycles of the 1980s? The ex­perts offer many answers, but no single approach has been sufficiently successful to rein in peace for very long. David Aaker of the Haas School of Business at UC. Berkeley believes that strategic market management displaced strategic planning in the mid-1980s because “the planning cycle is inadequate to deal with the rapid rate of change that can occur in a firm’s external environment.” And he characterizes this new market-driven approach to strategy as being highly responsive to the “strategic surprises and fast-developing threats” of the modern marketplace.
Strategic market management is like a new, faster, and more flexible strategic planning in that it encourages “real-time” response to external changes, rather than tying an organization’s rate of change to its annual planning cycle. In theory, at least, this rapid-response approach to strategy should keep businesses on or above the pace of change in their markets, allowing them to anticipate, even lead change.
But the most popular form of business strategy in the 1990s is the massive “re­structuring” that is generally accompanied by a major downsizing and a closing of fa­cilities and/or sell-off of subsidiaries or brands. The daily financial news should provide you with fresh examples whenever you read this lesson. Here’s just one typ­ical example from The Wall Street Journal on the day we wrote this paragraph:Tool and hardware maker Stanley Works swung to a second-quarter loss because of a charge for a restructuring program that includes closing 53 of its 123 plants and elimi­nating about 4,500 jobs, or 24 percent of the company’s workforce.The popularity of this sort of massive restructuring, with its deep cuts of prod­uct lines, divisions, facilities, and people, is the strongest possible evidence that strategic planning as practiced today is unable to anticipate and prepare for change. If companies grew and changed along with their markets, they would never get so profoundly out of alignment as to necessitate closing a third of their plants or firing a fourth of their people.
The failure of formal planning processes to anticipate important changes and align the organization with them in advance led Henry Mintzberg, a strategy expert from McGill University, to title his major review of the field The Rise and Fall of Strategic Planning. The king is dead. Long live the new king.., whoever he may be!

Why split hairs? Because many people and many managers think U.S. organiza­tions have already adopted the marketing concept, whereas in fact its essence is still missing at most companies.

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