Discuss about the Strategic Marketing for Creating Competitive Advantage Process.
The strategic management as well as change management is one of the most important aspects of the organizations. This repot would describe the strategic direction of three case studies on three different companies- Fage, Tough Mudder and Nokia. The strategic options of Fage would be evaluated with the help of SWOT analysis. The strategic options for the company would be determined followed by a course of action. The strategic options available to Tough Mudder would be determined along with the strategic leadership displayed by the top management of the firm. The challenges as well as opportunities of the firm would also be analyzed from a variety of perspectives. The change management process of Nokia would be discussed along with special emphasis on the memorandum issued by Elop.
Undertake a SWOT analysis of Fage
The strengths of Fage include that it has a proud history which has gained the loyalty of the customers (Panek et al. 2013). It was a small company; however, it has implemented a variety of innovative process and the company is always striving for “out of the box” ideas (FAGE USA 2017). This is being to gain the confidence of the customers as well as gain competitive advantage. It has gained massive transformation in the market (West Ford and Ibrahim 2015). Earlier, it was considered as small producer of yogurt and now it is being considered as a multinational organization. The company has got a strong presence in the international market. In Greece, it is considered as the market leader in the country and it occupies the second position in the United States (FAGE USA 2017). It has got healthy margins with its competitors in the international market. The company has maintained its average profit generation which has made it distinct from the close rivals (Panek et al. 2013). The visually attractive packaging and the distinct packaging makes it different from the market leaders. The company makes it a point to attract the consumers with the help of distinct packaging which would differentiate it from the competitors (Panek et al. 2013). The company has robust organizational structure which includes its presence in the international capital markets.
The weakness of the company includes it has poor brand awareness in the U.S.A (West Ford and Ibrahim 2015). The company has not implemented sufficient marketing campaigns. This has made Chobani the number one brand in the United States. The brand identity of Fage is not clear and hence it has not gained acceptance in the market (West Ford and Ibrahim 2015). This is because of the inadequate number of marketing activities undertaken by the company. As compared to other companies, their promotion is less which has adversely affected the brand identity of the company. It has declining market share in the USA (West Ford and Ibrahim 2015). This is because of the fact that the consumers have shifted to the other private label options that is considerably cheaper than Fage. One of the reasons behind this can also be traced back to the scanty number of marketing activities. The company ownership is family owned and hence it has slow evolvement of the management (West Ford and Ibrahim 2015). The company is unable to implement latest technological measures and hence it is often considered as outdated. The brand has limited financial flexibility in the market and hence there are areas in which there is no allocation of sufficient funds. This has also led to several bad debts in the market which has adversely affected the financial output of the firm.
The opportunities of Fage include that the yogurt market in Greece is experiencing significant growth (Layman 2014). This has made the company to implement different types of products in the market. The company can offer direct mail delivery alternatives for the busy consumers. There are an increasing number of consumers who are inclining towards the healthy food alternatives (Layman 2014). This has increased the instances of acceptance of yogurt based products as these products are good for health. There is a significant alternative for global market expansion which provides the company with an option to promoting its wide range of products. The brand has the opportunity of cross selling products involving dairy products and Fage cheese (Kilara and Chandan 2013). It has the opportunity of converting Johnstown plant so that it can provide as a destination of yogurt lovers. It can also foster conversion of customers from yogurt fans into Fage with the help of loyalist programs.
The company faced a wide number of threats such as the major food conglomerates which are entering the yogurt market in Greece. There is an increased exposure to the economy in Greece which poses major risk for the company. There are many yogurt customers who are moved over by increased promotions of the other companies. This would shift the loyal customers of Fage into other companies (Hassner and Wittenberg 2015). Fage would lose some of its customers, the impact on which can be felt on the profitability of the firm. There are low barriers of entry in the market which would imply that there is increased competition in the market (Hassner and Wittenberg 2015). This also indicates that several other companies can enter the market and give tough competition to Fage.
Identify the strategic options available to Fage
There are several strategic alternatives which are available to Fage. There should be long term strategies which would be based on the core idea concerning how to combat with competitors in the marketplace (Kotler et al. 2015). Fage should concentrate on improving the generic strategy of the firm. The firm should try to seek competitive advantage as there are a large number of competitors which have entered the market. It should focus on three things for doing so- low cost leadership, diversification, market penetration, differentiation and market development (Kotler et al. 2015). The low-cost leaders should strive to maintain low cost of production by ensuring low maintenance cost of the manufacturing unit, low cost of equipment and low costs of labour. This would make sure that Fage would be able to deliver at reasonable cost, which would increase the sales of the company. The reasonable cost is a definite way of gaining competitive advantage (Baker 2014). The organization could alternatively use an average price also and further invest the generated extra profits.
Fage also have the alternative for market penetration by taking maximum utilization of the resources of the firm. It should try to increase the market share in the markets of USA so that they are able to compete with the industry rivals. They should try to find latent market opportunities and try to exploit them. The aim of this strategy is to reach more number of customers in a short possible time (Mohammed Murova and Chidmi 2017).
The company should undergo product differentiation and try to fulfill the needs of the customers. The organization should focus on the identification of the market groups which would be profitable for the company in a long run (Mohammed Murova and Chidmi 2017). The customers are usually attracted to the differentiated products rather than non-standardized ones (Boynton and Novakovic 2013). It should aim for different flavors of yogurt, smoothies, cakes and others. The products should contain unique characteristics which are often desired by the customers such as low fat, gluten free, fat free, vegan and others.
It is also important to focus on the market development aspect. The company should strive to find additional sources of gaining entry into the market in different forms (Mohammed Murova and Chidmi 2017). It should try to find alternative market segments in order to find more number of customers (West Ford and Ibrahim 2015). The core competencies of the company should be used to capture new market segments where it would incur additional number of sales. It should look for international market expansion especially in and around USA.
There is also an alternative of product diversification which would be a combination of product development as well as market development (Jablonski 2014). It should try to promote innovative products in the market which would capture the target markets easily.
Recommend a course of action for Fage, giving detailed justification for your recommendation
Fage should try to enhance its generic business strategy by focusing on multiple actions. There are several courses of action that should be undertaken by Fage in order to enhance the business strategy of the firm-
- Creation of more brand awareness in U.S.A about the brand and highlighting the unique selling proposition of the brand (Kotler et al. 2015). This is required so that the customers are aware of the products and they accept it. This would also improve the brand visibility and the loyalty of the brand among the customers (Kotler et al. 2015). There should be increased number of promotional events so that the company is able to educate the public regarding the brand (Kotler et al. 2015).
- Fage should work on customisation of the products to the needs of the customers. It is important to assess the strengths of the competitors and launch their own products by highlighting their own strengths (Kotler et al. 2015). The yogurt products should be offered in a manner which increases the customer satisfaction rates. It would also improve the sales as well as market share of the company. This step would also ensure the increase of profit margins and considerable increase in the revenue generation of the company (Kotler et al. 2015). It would also improve the survival factor of the company in the highly competitive domestic or international market.
- Fage should adopt the latest technological tools in their production as well as manufacturing job function which would make their products competitive in the market (Borges et al. 2016). It would not only enhance the quality of the products but it would also reduce the average time taken for manufacturing process. This would allow the company to effectively utilize their remaining time in some other important job functions.’
- The company should consider doing financial restructuring of the company in which there would be optimum utilization of the financial resources. It should be done in such a way that the financial assets are utilized properly keeping in mind the broader organizational objectives of the firm (Asquith and Weiss 2016). It would enhance the overall business portfolio and it would increase the value of the organization. If there is instance of excessive debt, then the company should negotiate directly with the vendors as well as creditors for the purpose of creating repayment plans (Asquith and Weiss 2016). The company should focus on securing the capital of the firm by “accounts receivable” funding and “limited” asset liquidation (Asquith and Weiss 2016).
- Fage should use extensive marketing activities for the purpose of penetrating into the target market. The market penetration activity should be undertaken by increasing promotions, increasing product reach, attracting the customers of the competitors and increasing the usage of the product. The promotional activity of the firm should include attractive advertisements in different medium so as to create a pull strategy (Mayzlin Dover and Chevalier 2014). There should be schemes, offers and discounts offered to the customers who would make them purchase the products (Kotler et al. 2015). The sales promotion schemes would help it to penetrate into the market. The product reach should be increased by finding more channel dealers as well as more number of channel partners (Mayzlin Dover and Chevalier 2014). The channel partners should be motivated so that they perform the business function with this company (Ailawadi and Farris 2017). Fage should take an initiative so as to attract the customers of the competitors by reducing the price in a particular region of distributor. Alternatively, it can also target the current dealers of the products belonging to the competitors (Mayzlin Dover and Chevalier 2014). The product usage can be improved by increasing the consumption rate of the product (Porter and Heppelmann 2014). The higher consumption would be done by distributing product samples to the potential customers. The increased consumption would lead to increased market penetration, which would be profitable for the company (Mayzlin Dover and Chevalier 2014).
Describe Tough Mudder’s strategy and discuss the reasons why the strategy has been successful.
Tough Mudder has adopted several effective strategies that have helped the company to embrace business success. It has created loyal customers who spread the good word of the company (Grant and Jordan 2015). In the digital world of today, it is important to have loyal customers who instantly help the company to increase the brand recognition in the market. The loyal customers help to share the marketing message of the company without having to make extra investment (Pearson 2016). For example, the company has tagged Mondays as the “Headband Mondays” in which the finishers are supposed to wear the headbands at the workplaces, click pictures and share them on the social media. These pictures help the company to create dedicated consumers and help the brand to gain visibility in the market (Pearson 2016). The organization is always in the lookout for the creation of niche customers who would make their brands memorable. It has formulated clear distinct marketing objectives which take into account all the channels of marketing such as social media, website, promotional events, hoardings, word of mouth and others. This ensures that the messaging of the brand is put clear across all the customers and they are consistent with all the employees’ prospects and clients (Pearson 2016). The company believes in writing down its aims and objectives so that all the stakeholders are aware of the goals of the company. It also puts the company’s message clear across the entire medium in order to ensure business success.
Tough Mudder likes to experiment with the things and they believe in changing the venues of their events every year (Tough Mudder 2017). The company likes to keep their venues different every year and overcoming with their obstacles. They target different events every year such as Electroshock Therapy, Everest, Arctic Enema and others (Pearson 2016). They are also eager to change their marketing strategy with respect to the particular events that they are organizing. This is beneficial as the customers look forward to the events of the company (Pearson 2016). This also keeps them excited and also helps the company to gain a dedicated customer base. The customers are also eager to explore different domains every time.
The brand has always tried to reward the customers for their hard work and dedication towards the mud runs (Tough Mudder 2017). The orange finisher headband that the company offers to the fellow participants is precious possession of many people since they are obtained by hard physical labor of the participants (Pearson 2016). The customers are delighted by the rewards that they receive from the company since there are not many companies that give rewards to the participants (Peppers and Rogers 2016). The rewards system doesn’t need to be financial one; the non-financial benefits also go a long way in enhancing the satisfaction level of the customers. If the customers are appreciated for their hard work and they are encouraged, then they would be delighted to work harder the next time. This would also increase their motivation levels.
All these strategies have led to the success of the brand and it has been increasingly popular among the masses.
Outline the challenges and opportunities currently facing Tough Mudder and discuss how Tough Mudder should adapt its strategy to meet the identified challenges and exploit the identified opportunities.
Tough Mudder has always dealt with the challenges well and this has given them excellent operational efficiency. The market is oversaturated and there is the existence of a large number of market players. The close rivals such as Spartan Races, Warrior Dash and others are striving for gaining market dominance (Dunn and Norton 2014). These competitors have increased the number of events and promoted their events in several countries. The close rivals have also signed reputed companies such as Reebok as one of the lead partner. Mudder faces the challenge of maintaining its position in the market and to showcase qualities of an effective leader (Dunn and Norton 2014). The business strategy of the company should be modified in such a manner that it is able to maintain its competitive position in the market (Grant 2016). It should also try to showcase adequate leadership so that an increasing number of customers are attracted to the company. Tough Mudder should try to focus on the unique selling propositions of the company which would help the company to differentiate itself from the close rivals (Lovelock and Patterson 2015).
There are instances when the events of the company are regarded as unsafe or not good for health. The participants often feel that the events are unpleasant and they are not up to the mark. The company might be prone to be affected by its own success. It also faces the obligation of safeguarding one’s life (Dunn and Norton 2014). There has one death of a man during the events, which was termed as accident by the company (Tough Mudder 2017). In the event of such unfortunate incidents, the company has to pay a heavy price for securing its brand value. The company must have the policy of safeguarding the participants who take part in their event (Safa Von Solms and Furnell 2016). The business strategy of the company should be modified in such a way that it provides maximum benefits to the participants. There should be a dedicated team who should be responsible for the safe organization of the events- persons who are channeling through the crowds by overcoming through the obstacles (Dunn and Norton 2014). The experts should take care of the fact that the participants do not trample one another, drown in water and help the participants when they face any kind of obstacles.
The company has the need to create innovative services which would also help them gain competitive edge. The fierce competition that they face can be overcome by implementing innovative services for the customers, which would depend on the customer preferences (Renko and Druzijanic 2014). It should also try to venture in the international markets where there are increased market opportunities and gaining more recognition in the market. It is also important to maintain operational excellence so that there is overall success of the events (Dunn and Norton 2014). It should also try to create events in which the determination, will and mental strengths are determined rather than focusing on the physical strengths.
There are several opportunities of the company which should be utilized well so as to aid in the process of achieving the organizational objectives. There are a growing number of health-conscious customers who would be inclined to spend money for the activities that would help them increase their stamina and good health (Lee et al. 2014). The mud race is an excellent platform to improve the physical fitness of the individuals as it involves burning a high amount of calorie. It should aim for international expansion especially in the emerging markets of South East Asia where there is lucrative market for the adventure sports (Hoskisson et al. 2013). The brand should help people to rehabilitate themselves from the shocks they have experienced in life. The physical challenges would help them to recover from the tragedy they face in life (Dunn and Norton 2014). The marketing campaigns of the brand should try to incorporate these things and highlight them in their promotional campaigns. It is also advisable to gain sponsorship from reputed brands with which the public would be familiar with (Kaushik and Dey 2016). It would not help the company to increase the brand visibility but would also fetch the company potential participants for the future events.
Discuss the characteristics of strategic leadership exercised by Will Dean
The company has demonstrated strategic leadership which has helped the company to be successful in the market. The characteristics of the strategic leadership would be discussed in detail. Mr. Will Dean focus on the fostering true sense of accomplishments for the participants which would create interest in them (Fama and Stern 2016). He not only creates successful events but engages in critical thinking involving them. All the aspects of the event including the venue, participants, event milestones and rewards are well planned by the senior leadership under the supervision of Mr. Dean (Fama and Stern 2016). The company has introduced quirky culture in which the employees are motivated (Tough Mudder 2017). This makes them to deliver the best performance. Mr. Dean has implemented the analysis of a particular successful case every month, which provides as a source of motivation to the employees. For example, the organization performed a case study on Starbucks when the core customer of the company was in her early 30’s (Fama and Stern 2016). This is because during that time the primary participants of the company belonged to the age group of 30. Mr. Dean gives high importance to the employee engagement as well as employee welfare activities (Crawford et al. 2014). The organization makes sure that there are staff meetings in regular intervals where the employees would be able to learn about the company latest policies and share any grievances (Fama and Stern 2016). The company also believes in rewarding the employees who are well-deserving in their professional job role. It has formulated innovative ways of rewarding the employees. A “Credo Award” is being awarded to an employee who would keep up the values of the company and spread them to other employees (Tough Mudder 2017). The employees are rewarded when they perform jobs beyond their usual job descriptions and help the company in performing its day to day activities. Mr. Dean has used several market analysis tools to analyze important factors such as competition, collaboration, degree of risk and the platform for brand building (Fama and Stern 2016). The strategic leaders have focused on the implementation of strategic tools which would foster the spirit of collaboration and unity. The top management has led to the partnerships with profitable organizations which would accelerate the growth of the company (Fama and Stern 2016). This would enable the company to build market momentum and look for additional sources of revenues from external sources. The organization also uses alternate sources for the purpose of generation of more revenues for the organization.
Effective change management requires a clear perception of need, a way forward, the capability to change and commitment. With reference to these four criteria, evaluate the process used by Nokia.
The effective change management is a combination of transparent needs perception, alternative solution for the future and the capability of commitment for bringing in the change process in the organization (Goffee and Scase 2015). Nokia identified the need to change their existing business strategies which would aim for better operational efficiency. This was due to the fact that the company had realized that it had started to lose its market share from all perspectives. There was an extremely high level of competition from the high-end brands along with the low brand ones. The company faced loss of shares due to Apple as well as the other smartphone companies who had embraced the Android operating software of Google (Nokia 2017). Nokia also faced stiff competition from the low end mobile manufacturers such as Chinese mobile manufacturers who has mobile devices at much less cost (Nokia 2017). This caused the company to lose the market steadily in the hands of its close rivals. The company had realized that it is slowing losing its loyal customer base as the company was unable to cater to their needs. The company also failed to offer touch screen based mobiles while the rivals such as HTC or Apple used this feature to their advantage. The market disruption by Apple and Samsung, which launched revolutionary multi touch sensitive giant capacitive screen, posed serious challenges to Nokia (Nokia 2017). The company has devised some alternate solutions for combating with the issue. It has emphasized on the need of implementing operational level change in the organization in order to compete with its rivals in the market (Nokia 2017). The organization has focused on simplified decision making activity which would imply that the managers would be able to take good decisions for their company (Nokia 2017). The company developed two important strategies for the process of incorporating change management in the organization. The first strategy concerned with the adoption of the Microsoft software for mobile and discards the current Symbian software, which was used by the company for several years (Nokia 2017). The next strategy was to fire out the employees of the organization and reduces the size of the workforce. There were some employees who were transferred to other companies.
There were alternate solutions that were considered by the company. This was considered by keeping in mind the parameter of way forward. Nokia were outsourcing Symbian to Accenture (Nokia 2017). The company considered it as a cost saving measure as there were some employees who were transferred to Accenture (Nokia 2017). Nokia planned to sell the cross platform “application development” known as “Qt” to Digia (Nokia 2017). It also strived to aim for large scale lay-offs which were a result of the operational level restructuring. The main reason for this lay-off was shutting down of the production lines in Finland, Canada and Germany (Nokia 2017).
The capability of commitment as well as change was moderate in the organization. There were stiff resistances from the employees as thousands of employees joined walked out of the office for joining a protest (Nokia 2017). Some of them were not aware of the situation and there were some employees who were confused regarding the ongoing situation in the organization. The employees had disagreements with the CEO as the employees accused that the CEO was not answering their questions in a proper manner.
Would you have sent out the memorandum if you were Elop? Outline other actions Elop could have taken.
It was not correct to send out memorandum to the employees which created a major hustle-bustle in the organization. The management of the company decided to give a major shock to the employees which were detrimental to the organizational culture in the long run (Lynch 2015). Initially the memorandum was sent to the senior level managers; however, it was soon transferred to the other members of the organization as well. This hampered the confidential data of the organizations and the management made a fun of themselves in front of their workforce (Lynch 2015). It created an environment of negative culture that reduced the organizational growth.
Instead of sending the “doomsday” memo, Nokia could have discussed the organizational crisis with their employees in a face to face meeting (Lynch 2015). The viewpoints of the employees should have taken and their solutions should have been considered by the management. The face to face discussion would have fostered the brainstorming session, which would have provided intelligent ideas to the management (Lynch 2015). They could use this idea for improving the current managerial structure of the organization. The organization could have used greater cooperation between the team members who would have given innovative solutions for maintaining the competitive edge (Cummings and Worley 2014). It could also use some innovative concepts for the purpose of idea generation regarding the creation of competitive products, which could have been considered by the senior level management (Lynch 2015). The senior level management should have consulted with reliable industry peers and determined solutions for the business problem.
The change taskforce intended to ?instigate a culture change programme to embed the right values, mindsets and behaviors. With reference to this, discuss culture as a facilitator and inhibitor of change in organizations
In an organization, there are typical situations in which there are positive effects of change and there are situations in which there is negative effect of change (Goffee and Scase 2015). The organizational culture is an amalgamation of the mindsets, right values and the right behaviors in the organization. The organizational culture comprises of the inter connected set of roles, goals, processes, attitudes, communication practices and assumptions in the organization (Alvesson and Sveningsson 2015). The culture change in an organization affects the behavior of the employees. A positive organizational culture make the employee feel valued about their job role and foster employee commitment in the organization (Alvesson and Sveningsson 2015). The culture change affects the alignment of goals in the organization from the point of view of the employees as the employees feel greater level of commitment towards the organization (Fullan 2014). The employees would be able to perform better in an organizational context and they would feel that the management is concerned about their well-being (Alvesson and Sveningsson 2015). If the efforts of the employees are appreciated by the management, then the employees would feel motivated and their zeal towards work would increase. This would also increase their job satisfaction rates and this have a positive effect on the well-being of the organization. If the employees feel that the performance appraisal is proper in the organization and they are getting sufficient hikes, then they would be highly motivated in the workplace (Alvesson and Sveningsson 2015). A positive cultural change would instill the right values in the employees and they would engage in honesty and perseverance in the organization (Desai 2016). The positive organizational culture would also allow the employee to behave properly in the organization which would be aligned with the organizational values.
The cultural factor may be inhibiting the change process in the organization. The employee’s resistance to change is a big factor in making the change process unsuccessful (Lundy and Morin 2013). The employees would be pre-occupied with negative implications and they might harbor feeling that they would be losing their jobs (Desai 2016). The poor communication methods would also lead to the fact that the employees would not be allowing the management to bring in change in the organization (Mowday Porter and Steers 2013). The employees may display awful behavior which would be difficult for the process of change management in the organization. The organizational culture may not allow the employees to effectively engage, which may cause the change process to be a failure (Mowday Porter and Steers 2013). If the organizational culture implements changes in several changes without prior information to the employees, then there would be stiff resistance from the employees (Smither Houston and McIntire 2016). If the employees are not aware of the fact that the old culture or process was not good and the new culture is good, then they would not be able to deal positively with the change process (Deal and Peterson 2016). A negative organizational culture often creates suspicion, anger and disbelief among the employees which would make them resist the changes that would be made in the organization. Thus, it is important to enforce positive organizational culture in the organization which would foster the organizational productivity.
The strategic management as well as change management is responsible for organizational success. This repot has critically evaluated the strategic direction of three case studies on three different companies- Fage, Tough Mudder and Nokia. The strategic options of Fage have been evaluated with the help of SWOT analysis. The strategic options for the company would was done followed by a recommended course of action. The strategic options available to Tough Mudder was analyzed along with the strategic leadership displayed by the top management of the firm. The change management process of Nokia was explored along with special emphasis on the memorandum issued by Elop. The issue of culture is being shown in the perspective of both facilitator as well as inhibitor in the organizations.
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