CIM Revision Cards Analysis and Evaluation

Karen Beamish

• Publisher: Routledge
• Year: 2010
• eBook ISBN: 9781136418792
• Topic: Business
• Subtopic: Business General
• Index: Business

Designed specifically with revision in mind, the CIM Revision Cards provide concise, yet fundamental information to assist students in passing the CIM exams as easily as possible. A clear, carefully structured layout aids the learning process and ensures the key points are covered in a succinct and accessible manner. The compact, spiral bound format enables the cards to be carried around easily, the content therefore always being on hand, making them invaluable resources no matter where you are. Features such as diagrams and bulleted lists are used throughout to ensure the key points are displayed as clearly and concisely as possible. Each section begins with a list of learning outcomes and ends with hints and tips, thereby ensuring the content is broken down into manageable concepts and can be easily addressed and memorised

Introduction to Analysis and Evaluation

Learning Outcomes

In this unit you will:

• Appreciate the role of marketing in adding value
• Understand the importance of market orientation in determining the success of an organization (see syllabus)
• Understand the range of tasks involved in undertaking rigorous evaluation and analysis
• Review the strategic process and understand the importance of analysis and evaluation within it
• Understand the motivation behind the Professional Postgraduate Diploma Analysis and Evaluation syllabus
• Gain an overview of the main approaches to situational analysis and evaluation
• Appreciate the role of marketing within the strategic planning process (see Syllabus 1.5).

Fig. 1.1. Formulating strategy – Remember what we are trying to achieve

Key Definitions

Market orientation involves the specific activities that translate the philosophy of marketing into practice.

Customer orientation involves understanding customers well enough to create superior value for them continuously.

Competitor orientation is the awareness of the capabilities of competitors.

Interfunctional co-ordination involves the company using all its resources to create value for its target customers.

Analysis represents a method for gaining information relating to external markets and internal assets. Evaluation is the study of options in the light of company capabilities and attitude to risk.

This unit looks at:

• Business orientation and the role of marketing – identifying the business intelligence needed to inform strategy-making in domestic and international markets.
• Assessing the impact of major trends in the global context on strategy making.
• Conducting a strategic audit of the internal and external environment, including an evaluation of business performance, using appropriate tools, models, analysis of numerical data and management information.
• Appraising the nature of culture within organizations and the importance of its fit with strategy and operations.
• Synthesising a coherent and concise assessment of the situation facing an organization, and develop alternative scenarios.

Fig. 1.2. The five elements of the A&E unit

Marketing Philosophy

• Markets are becoming increasingly competitive and dynamic. The main driver behind the marketing concept is the belief that organizations are more likely to succeed if they are focused on the customer.

Market Orientation

• Narver and Slater have identified different components of market orientation. At the core is a focus on long-term profits. The business needs to be sustainable and have a strategic perspective rather than a tactical one. This should be supported by an organizational culture that encourages all employees to promote customer satisfaction. This should be underpinned by customer orientation, competitor orientation and inter-functional co-ordination.

The different types of business cultures are represented in Figure 1.3 and provide a framework to analyse and evaluate companies.

Fig. 1.3. The orientation of different business functions

• A study by Doyle, Wong and Saunders (1993) demonstrated that Anglo-Saxon companies such as those operating in North America and the United Kingdom were short term in outlook by being more profit-orientated whereas Japanese had a balanced orientation taking each business function into consideration and taking a longer-term business perspective (Figure 1.4). The study also indicated that simply adopting a purely marketing approach was not likely to improve performance as much as it would by applying a balanced approached depicted in Fig. 1.4.

Fig. 1.4. Balanced orientation

Source: Adapted Doyle, Wong and Saunders

Marketing Stakeholders

So far we have talked about three groups of stakeholders in the process of creating value: customers, competitors and employees. But other groups can influence the success of an organization. The seven markets model is shown in Figure 1.5 Effective marketing involves the realization that all stakeholders matter. They invest in the company and allow the business to invest in itself. But shareholders do not exist in a vacuum. There is overlap between the different groups. Employees may become shareholders, for example. Many companies have share schemes specifically to encourage this crossover. Shareholders may be encouraged by reference groups.

Fig. 1.5. The seven markets model

Marketing and Value

• Marketing has been criticised in the past for focusing solely on customer value, largely ignoring other stakeholder groups.
• Marketing needs to define value more broadly in terms of economic value the idea that every activity should create a surplus, that is, that outputs should have a higher value than inputs.
• For marketing to be seen as relevant inside the business, marketing activities need to be seen as contributing to that profit by creating value, not destroying it.
• It is important to demonstrate how marketing adds value by using rigorous business metrics for all marketing activities. To show how activities add value there is a need to be able to measure their contribution.

The Role of Marketing in Corporate Strategy

Marketing needs to be at the core of corporate strategy. There are three important roles for marketing to fulfil in the planning process.

Identification of Customer Requirements

If a customer-orientated approach is adopted there is a need to know as much as possible about who is buying the product or service. This will involve market research.

Competitive Positioning

Markets tend to be heterogeneous, i.e. they are made up of groupings that are similar to each other but differ in significant respects from other groups. The aim is to cluster these segments around the same need. Once this has been done there is a need to find out how attractive the potential targets are, what are the requirements of that target and what are our competencies to meet that requirement.

Implementing the Marketing Strategy

Effective communication across organizational functions is critical to smooth implementation. This is even more important in service companies where the customer may have contact with several front-line employees. Each must give a consistent message of what the company is about. These ‘boundary spanners’ (so-called because they span the boundary between the customer and company) are critical to the success or otherwise of any service organization.

The Role of Analysis and Evaluation in Marketing Planning

Managing the marketing planning process needs to begin with a thorough analysis of the company’s situation. The company needs to analyse its markets and the marketing environment to evaluate potential opportunities and threats. The fields of strategy and marketing are intimately linked. Certain strategy texts divide strategy formulation in companies into three distinct areas (Figure 1.6).

Fig. 1.6. Strategy formulation at different levels within an organization

Strategy Formulation at Different Levels within an Organization

There is an underlying assumption within the syllabus that...

Table of contents

• Cover
• Title Page
• Copyright
• Table of Contents
• Preface
• 1. Introduction to analysis and evaluation
• 2. Evaluating performance: marketing metrics
• 3. Brand valuation
• 4. Auditing marketing activities
• 5. Evaluating performance: financial measures
• 6. Analysing the external environment
• 7. Analysing the internal environment
• 8. Characteristics of the global marketplace
• 9. Defining competitive advantage
• 10. Bibliography