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Organizing and Planning For Effective Implementation: Mcgraw-Hill/Irwin
Organizing and Planning For Effective Implementation: Mcgraw-Hill/Irwin
Organizing and
Planning for
Effective
Implementation
McGraw-Hill/Irwin Copyright © 2010 by The McGraw-Hill Companies, Inc. All rights reserved.
Designing Appropriate Administrative
Relationships
• Designing appropriate administrative
relationships for the implementation of
different competitive strategies:
– The degree of autonomy provided to each
business unit manager.
– The degree to which the business unit shares
functional programs and facilities with other
units.
– The manner in which the corporation
evaluates and rewards the performance of its
SBU managers.
17-2
Designing Appropriate Administrative
Relationships
• Business-unit autonomy
– Prospectors are likely to perform better on the
critical dimensions of new product success.
• Decentralized decision making allows the
managers closest to the market to make more
major decisions on their own.
• Managers will be more flexible and adaptable.
• Coordination problems across business units.
– Low-cost defender SBUs perform better on
ROI and cash flow by giving their managers
relatively little autonomy.
17-3
Designing Appropriate Administrative
Relationships
• Shared programs and facilities
– Some firms attempt to avoid the trade-off
between efficiency and adaptability by
designing relatively small, narrowly focused
units, but then having two or more units share
functional programs or facilities.
– Sharing resources can pose a problem for
prospector business units.
– Functional independence usually facilitates
good performance for prospector businesses.
17-4
Designing Appropriate Administrative
Relationships
• Evaluation and reward systems
– For defenders in relatively mature markets, operating
efficiency and profitability tend to be the most
important objectives.
– Basing too large a portion of managers’ rewards on
current profitability may cause problems for
prospectors.
– Systems that place more emphasis on sales volume
or market share objectives, or on the percentage of
volume generated by new products, may be more
appropriate for prospectors.
17-5
Designing Appropriate Organizational
Structures and Processes
• Successful implementation of a given
strategy is more likely when the business:
– Has the functional competencies demanded
by its strategy and supports them with
substantial resources relative to competitors,
– Is organized suitably for its technical, market,
and competitive environment, and
– Has developed appropriate mechanisms for
coordinating efforts and resolving conflicts
across functional departments.
17-6
Designing Appropriate Organizational
Structures and Processes
• Functional competencies and resource
allocation
– Competence in marketing, sales, product
R&D, and engineering are critical to the
success of prospector businesses.
– In low-cost defender businesses the
functional areas most directly related to
operating efficiency.
17-7
Designing Appropriate Organizational
Structures and Processes
• Service organizations
– Competence in human resource development
is more crucial for service businesses
pursuing prospector strategies than for those
focused primarily on efficiency and low cost.
– Personnel management is an important
adjunct to the production and marketing
efforts of high-contact service organizations.
17-8
Designing Appropriate Organizational
Structures and Processes
• Organizational structures: Variables
– Formalization is 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.
17-9
Functional Organization of an SBU and
Its Marketing Department
17-10
Designing Appropriate Organizational
Structures and Processes
• Functional organizations
– The simplest and most bureaucratic design.
– This is the most centralized and formalized
organization form and relies primarily on
hierarchical mechanisms for resolving
conflicts across functional areas.
17-11
A Marketing Department with a
Product Management Organization
17-12
Designing Appropriate Organizational
Structures and Processes
• Product management organizations
– This structure decentralizes decision making
while increasing the amount of product
specialization.
– Although the product managers are
responsible for obtaining cooperation from
other functional areas both within and outside
the marketing department, they have no
formal authority over these areas.
17-13
A Marketing Department with a
Market Management Organization
17-14
Designing Appropriate Organizational
Structures and Processes
• Market management organizations
– In some industries an SBU may market a
single product to a large number of markets
where customers have very different
requirements and preferences.
– The intermediaries and marketing activities
involved in selling to the different markets are
so different that it makes sense to have
separate market managers in charge of each.
17-15
Designing Appropriate Organizational
Structures and Processes
• Matrix organizations
– The least bureaucratic or centralized and the
most specialized type of organization.
– Brings together two or more different types of
specialists within a participative coordination
structure.
– Suits prospector businesses and the
management of new product development
projects within analyzer or differentiated
defender businesses.
17-16
Designing Appropriate Organizational
Structures and Processes
• Recent trends in organizational design
– Organizations will increasingly emphasize the
managing of business processes in contrast
to functional areas.
– Process management is quite different from
the management of a function:
• It uses external objectives.
• People with different skills are grouped to
undertake a complete piece of work; their work is
done simultaneously, not in sequence.
• Information flows directly to where it is used.
17-17
Designing Appropriate Organizational
Structures and Processes
• Recent trends in organizational design
(cont.)
– The use of self-managing teams.
– Collaborative networks.
17-18
Designing Appropriate Organizational
Structures and Processes
• Organizational adjustments as firms grow and
markets change
• Five key drivers of such decisions:
– 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, and costs.
– Growing firms or those serving rapidly changing
markets are likely to need to rethink—and perhaps
change—the structure of their sales and marketing
organizations frequently.
17-19
Designing Appropriate Organizational
Structures and Processes
• Organizational designs for global markets
• Little or no formal organization
– Ranges between the domestic organization
handling international transactions and a
separate export department.
• An international division
– Often established to house all international
activities, most of which relate to marketing.
– Serves best with a limited number of products
that lack cultural sensitivity.
17-20
Designing Appropriate Organizational
Structures and Processes
• Global structures
– The most common global structure is one
based on products.
– The area structure is appropriate when there
is considerable variance across markets
regarding product acceptance and marketing
activities.
– A hybrid organization is some combination of
the functional, product, or area types of
structure.
17-21
Designing Appropriate Organizational
Structures and Processes
• Decision making and organizational
structure
– Global organization structures can be
centralized or decentralized in terms of
decision making.
– Multinationals faced with strong global
competition require more centralization.
17-22
Marketing Plans: The Foundation for
Implementing Marketing Actions
• Preparation of a written plan is a key step
in ensuring the effective execution of a
strategic marketing program because it
spells out what actions are to be taken,
when, and by whom.
17-23
Contents of an Annual Marketing Plan
17-24
Marketing Plans: The Foundation for
Implementing Marketing Actions
• The situational analysis
– Market situation
– Competitive situation
– Macroenvironmental situation
– Past product performance
– Sales forecast and other key assumptions
17-25
Marketing Plans: The Foundation for
Implementing Marketing Actions
• Key issues
– After analyzing the current situation, the
product manager must identify the most
important issues facing the product in the
coming year.
– This section should also highlight any special
strengths of the product or weaknesses that
must be overcome in responding to future
threats and opportunities.
17-26
Marketing Plans: The Foundation for
Implementing Marketing Actions
• Objectives
– Financial objectives provide goals for the
overall performance of the brand and should
reflect the objectives for the SBU as a whole
and its competitive strategy.
– Those financial goals must then be converted
into marketing objectives.
17-27
Marketing Plans: The Foundation for
Implementing Marketing Actions
• Marketing strategy
– The manager must now specify the overall
marketing strategy to be pursued.
– The chosen strategy should fit the market and
competitive conditions faced by the product
and its strategic objectives.
– It should also incorporate all of the necessary
decisions concerning the 4Ps.
17-28
Marketing Plans: The Foundation for
Implementing Marketing Actions
• Action plans
– The most crucial part of the annual marketing
plan for ensuring proper execution.
– The specific actions necessary to implement
the strategy for the product are listed,
together with a clear statement of who is
responsible for each action, when it will be
done, and how much is to be spent on each
activity.
– Specific timelines and milestones are set
forth.
17-29
Marketing Plans: The Foundation
for Implementing Marketing Actions
• Projected profit-and-loss statement
– The action plan includes a supporting budget
that is essentially a projected profit-and-loss
statement.
– This budget is then presented to higher levels
of management for review and possible
modification.
– Once approved, the budget serves as a basis
for the plans and resource allocation
decisions of other functional departments
within the SBU.
17-30
Marketing Plans: The Foundation
for Implementing Marketing Actions
• Contingency plans
– The manager might also detail contingency
plans to be implemented if specific threats or
opportunities should occur during the planning
period.
17-31
Take-Aways
17-33
Take-Aways
17-35
Take-Aways