Organizing & Planning for Effective Implementation

PPT12S.Venkat

Discussion Question

1. Which is more important: planning or implementation?

• Arguments for the importance of planning• Implementation of marketing strategies is

unlikely to be effective unless all of the business’ people are following the same plan.

• Formal plans also establish the timetables and objectives that are the benchmarks for management’s evaluation and control of the firm’s marketing strategies.

• Arguments for the importance of implementation

• It is crucial for carrying out strategic planning decisions.

• If improper implementation, management may mistakenly decide the wrong strategy had been chosen

• Common venture capitalist’s adage • “Give me ‘A’ implementation of a ‘B’ plan over

‘B’ implementation of an ‘A’ plan.”

Discussion Question

2. How should marketing’s degree of autonomy, shared programs and resources, and the basis for its incentives vary across different business strategies?

SBU Autonomy

Prospector - relatively high level

Differentiated defender - moderate level

Low-cost defender- relatively low level

Shared Programs and SynergyProspector - relatively little

Differentiated defender - little synergy in areas central to

differentiation

Low-cost defender - high level of synergy and

shared programs

Evaluation and Reward Systems

Prospector - high incentives based on sales and share growth

Differentiated defender - high incentives based on profits or ROI

Low cost defender - incentives based on profits or ROI

Discussion Question

3. How should the firm’s organization be structured to most effectively implement different business strategies?

Organizational StructureImportant structural variables include:

- Formalization- Centralization- Specialization

• Formalization– The degree to which formal rules and standard

policies and procedures govern decisions and working relationships.

• Centralization– Refers to the location of decision authority and

control within an organization’s hierarchy• Specialization– Refers to the division of tasks and activities across

positions within the organizational unit.

• Prospector?• SBU will perform best on volume and share-growth

when:• Functional strengths are marketing, sales, R&D, and

engineering• % of sales spent on marketing, sales, R&D, and engineering

are high and fixed assets are low relative to competitors• Managers from marketing, sales, R&D, and engineering have

substantial influence on business and marketing strategy decisions

• Structure has low levels of formalization and centralization, but high level of specialization

• SBU will experience high levels of inter-functional conflict

• Differentiated defender?• SBU will perform best on ROI dimensions when:

• Its functional strengths include sales, financial management, control and those functions related to its differential advantage

• % of sales spent on sales force, gross fixed assets per employee, % of capacity utilization, and % of sales devoted to other functions related to differential advantage are high relative to competitors

• Financial managers, controller, managers of functions related to unit’s differential advantage have substantial influence on business and marketing strategy decisions

• Structure has moderate levels of formalization, centralization and specialization

• SBU will experience moderate levels of inter-functional conflict

• Low-cost defender?• SBU will perform best on ROI and cash flow dimensions

when:• Its functional strengths include engineering, production,

distribution, and financial management and control• Marketing, sales, and product R&D expenses are low, but

process R&D, fixed assets per employee, and % of capacity utilization are high relative to competitors.

• Financial, controller, and production managers have substantial influence on business and marketing strategy decisions

• Structure has moderate levels of formalization and centralization, but low levels of specialization

Discussion Question

4. What are the merits and limitations of structuring the marketing organization on a functional, product, or market basis? When might each form best be used?

- Can be used on a global basis, too.

• Functional?• Merits: Simple and easy to implement.• Limitations: Relies heavily on standard rules and

operating procedures. Conflicts across functional areas are resolved in a hierarchical manner.

• Best use: for small startup companies; or for large companies operating in stable and slow-growth industries where the environments are predictable. The form is appropriate for low-cost defender SBUs attempting to maximize their efficiency and profitability in mature or declining industries.

• Product management?• Merits: Has the ability to identify and react more quickly

to the threats and opportunities individual product-market entries face; improved coordination of functional activities within and across product markets; and increased attention to smaller product-market entries that might be neglected in a functional organization.

• Limitations: This structure has difficulty in obtaining the cooperation necessary to develop and implement effective programs for a particular product given that a product manager has little direct authority.

• Best use: For companies or SBUs that have many product-market entries. (diff defender ;analyzer)

• Market management?• Merits: Gives market managers more authority

and independent budgets to work with.• Limitations: Potential for lack of control or

consistency with this kind of decentralized structure.

• Best use: For companies who market a single product to a large number of markets where customers have very different requirements and preferences. (differentiated defender; analyzer)

• What about a Matrix structure?• Merits: Brings multiple points of view to decision-making. Once

decisions are reached, they are more likely to reflect the expertise of a variety of functional specialists, to be innovative, and to be quickly and effectively implemented.

• Limitations: Requires participative decision making which can be very inefficient; requires a good deal of time and effort for the team to reach mutually acceptable decisions and gain approval from all the affected functional areas. Even with fast implementation, may slow responsiveness to changes in market and competitive conditions.

• Best use: A business facing an extremely complex and uncertain environment may find a matrix organization appropriate. (prospector/ new product development in analyzers and differentiated defenders)

Discussion Question

5. How should managers decided when the time has come to restructure an organization and what new structure should replace the old?

Five Key Drivers• Customer needs• Informational requirements of the sales

and marketing personnel charged with meeting those needs

• Ability of a given structure to motivate and coordinate the kinds of activities that market conditions require

• Available competencies and resources• Costs

Discussion Question

6. What does a Marketing Plan contain?

• Executive Summary: Presents a short overview of the issues, objectives, strategy, and actions incorporated in the plan and their expected outcomes for quick management review.

• Current Situation: Summarizes relevant background information on the market, competition, past performance of the product and the various elements of its marketing program (e.g., distribution, promotion, etc.), and trends in the macro-environment.

• Key Issues: Identifies the main opportunities and threats to the product that the plan must deal with in the coming year, and the relative strengths and weaknesses of the product and business unit that must be taken into account in facing those issues

• Objectives: Specifies the goals to be accomplished in terms of sales volume, market share, and profit.

• Marketing Strategy: Summarizes the overall strategic approach that will be used to meet the plan’s objectives.

• Action Plans: This is the most critical section of the annual plan for helping to ensure effective implementation and coordination of activities across functional departments. It specifies:• What specific actions are to be taken.• Who is responsible for each action.• When the action will be engaged in.• How much will be budgeted for each action

• Projected Profit & Loss Statement: Presents the expected financial payoff from the plan.

• Controls: Discusses how the plan’s progress will be monitored; may present contingency plans to be used if performance falls below expectations or the situation changes.

• Contingency Plans: Describes actions to be taken if specific threats or opportunities materialize during the planning period.

Discussion Question

6. What are some of the things a good marketing plan does to help ensure its effective implementation?

• Marketing plans are more likely to be implemented effectively when:

• Objectives meet the SMART test [Specific, Measurable, Attainable, Relevant (to the firm’s mission), Time-bound]

• Target market is clearly identified• Action plans and milestones identify specific

timelines, responsibilities, and budgets• Contingency plans are identified