Aligning the Organization Why Align Organization

with the Market

01 with Market?

Strategic Rationales for

02 Alignment

Stages of Organizational
03 Alignment

04 Balancing the Pressure

05 Implementation
 Why Align the Organization with Market?
Classic Failure Example
Failure of Nokia to keep up
with the dynamic market and
customer needs.
Competitive Pressure
Competitor’s profit margin, better reach
and more customers being pulled on
the other side.
Assertive Customers
The focus is being pushed on the
customers from products or functions of
organizations.
Classic Success Example
Motorola CEO ending rivalry
among product divisions.
Market Changes
Highly dynamic market changes makes
it difficult for organizations to stay
focused on a single product or function.
Organizational Strategies
To increate profit margin, create better
segmented silos, customer retention.
Strategic Rationales for Alignment

Implementing a Solutions Strategy

To create tailored solutions that integrated both products and

services.
e.g. Cummins India – Service Example.

Getting Closer to the Market

Getting closer to the customer – Gaining deeper insights into

the segments – breaking away from product orientation
e.g. Imation Corp.

Pursuing Segment Growth Opportunities

Have separate segments for separate target customers.

e.g. Nokia, Sony North America
 Stages of Organizational Alignment

a) Stronger CRM
b) Hybrid Model – provide modular components.

Fuller Structural
Alignment

Having a few Key Account Formal

managers (A small CRM) Coordination

Informal
Coordination More alignment with ‘heavyweight’ customers.

Product or
Financial Silos

For smaller companies. To have product focused

silos.
 Balancing the pressure

FACILITATING COUNTERVAILING
FORCES PRESSURES

Why it has to be done? What are the challenges?

 Strategic emphasis on relational value
 Need for clearer accountability for
customers
 Recognition of lack of sharing of market
information
 Dissatisfaction with marketing productivity
 Pressure from large customers
 Lack of segment sales/profit data
 Cost
 Tolerance for complexity
 Legacy effects(inertia/organizational
resistance)
 Homogeneity of customer base
 Implementation – What to keep in mind?

Adjust Pace of Alignment to Address the Obstacles

02
Stay Focused on Customer’s Total Experience

01
E.g. Fidelity took 3 years to accomplish 60% of their changes.
Have Unified Customer Information. Get people to pay attention to
E.g. Xerox – Longer Sales Cycles and failure.
Customer Experience using Performance Metrics.

Keep Realigning to Stay Ahead of Market Changes

03 Pendulum Phenomenon – Overshooting and going back to the bottom.

Quickly adapt and react to the market changes. E.g. Philips
Semiconductors Co.
 Implementation – What to keep in mind?
What to decide?

01
1. Segmentation – Targeting - Positioning
Industrial Finishes Group contributes to 25% of the Total Annual Revenue 2. Product Branding
of Pintura Sales, which is a very significant contribution. 3. Price
4. Channels of Distribution
5. Communications

Lena – Powder Based Coating for Woods.

Customer segments are Furniture(30%), Flooring (25%0,
Why it is better? Cabinetry(20%), and other Wood Products (25%).
1. Durability Lopez estimated that 20% of IFG’s total sales to flooring and cabinetry
2. Shape Versatility customers would switch to power based coatings, 60% and 40% of
3. Environment Friendliness furniture and other wood products would switch from water-based and
4. Cost Effectiveness solvent-based coatings respectively to powder-based coatings.
5. Coating Versatility

It is being considered that Lena would cannibalize the existing products

2
sales and that switching from solvent-based to water-based coatings is
a safer approach. Lopez has estimated a 5% increase in sales to
furniture and other wood products and a 1%increase in sales to flooring
and cabinetry customers for next 5 years annually.

Keep Realigning to Stay Ahead of Market Changes

03 Pendulum Phenomenon – Overshooting and going back to the bottom.

Quickly adapt and react to the market changes. E.g. Philips
Semiconductors Co.
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