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Sir Tahir Aziz Khan
Submitted By: Rizwan Ahmad Sardar CIIT/FA08-MBA-121/LHR
It has become a Herculean task for companies to sustain their competitive edge in this cut-throat market.
In today market customer behave very rationally, looking for more value, Then either The value is in term of money, pleasure, status and so on. For sustaining the Competitive advantage thus become the prime priority and challenging task for Companies. Competitive advantage of an organization involves gaining an advantage over other competing firms with regard to the design, delivery, and strategies of the firm. Gaining competitive advantage entail a set of specialized skills, assets, and capabilities for the organization. Innovation is the ability to envision and apply creative solutions to problems. It is an effective tool towards gaining sustainable competitive advantage. In addition, the firm has to optimally utilize its internal resources and capabilities to exploit external opportunities in order to gain sustainable competitive advantage. Sustainable competitive advantage is the focal point of your corporate strategy. It Allows the maintenance and improvement of your enterprise's competitive position in The market. It is an advantage that enables business to survive against its Competition.
Over a long period of time hyper competition is a key feature of the new economy. New customers want it quicker, cheaper, and they want it their way. The fundamental quantitative and qualitative shift in competition requires
organizational change on an unprecedented scale. Today, your sustainable
competitive advantage should be built upon your corporate capabilities and must constantly be reinvented. According to the new resource-based view of the company, sustainable competitive advantage is achieved by continuously developing existing and creating new resources and capabilities in response to rapidly changing market conditions. Among these resources and capabilities, in the new economy, knowledge represents the most important value-creating asset. The opportunity for your company to sustain your competitive advantage is determined by your capabilities of two kinds – distinctive capabilities and reproducible capabilities and their unique combination you create to achieve synergy. Your distinctive capabilities - the characteristics of your company which cannot be replicated by competitors, or can only be replicated with great difficulty - are the basis of your sustainable competitive advantage. Distinctive capabilities can be of many kinds: patents, exclusive licenses, strong brands, effective leadership, teamwork, or tacit knowledge. Reproducible capabilities are those that can be bought or created by your competitors and thus by themselves cannot be a source of competitive advantage Capability represents the identity of your firm as perceived by both your employees and your customers. It is your ability to perform better than competitors using a distinctive and difficult to replicate set of business attributes. Capability is a capacity for a set of resources in an integrative way to perform a stretch task. In the capability model, senior managers are predominantly concerned with issues about the quality of products and services provided to customers (external and internal), the flow of value-added work, and roles and responsibilities. The dominant view on performance measurement shifts from the traditional focus of actual-vs.-budget to a more balanced model that includes the timeliness, quality, and cost of providing products and services to customers. Allocation and budgeting of resources moves from the traditional practice of individual units vying for resources based on their own needs toward cross-group teams that jointly assess resource needs based on the flow of work needed to create value to customers. Problem solving would seldom involve situations in which unit managers
had to compete with each another; instead, organizations would adapt to departmental interdependence, recognizing that issues are best addressed through cross-group problem-solving sessions focused on providing services to customers and the required flow of work. Through continued use, capabilities become stronger and more difficult for competitors to understand and imitate. As a source of competitive advantage, a capability "should be neither so simple that it is highly imitable, nor so complex that it defies internal steering and control." Capabilities grow through use, and how fast they grow is critical to your success. The first step is to understand where the greatest deficiencies lie, and which levers will deliver the most impact. For many organizations, the most critical levers to assess initially include structure and metrics, though establishing innovation processes and providing employees with new skill sets are also critical drivers of culture. The act of visibly sponsoring (let alone personally driving) specific initiatives focused on creating new organizational capabilities that Promote innovation serves to send a message and establish new symbols and stories that reinforce a culture of innovation. One of the challenges in defining strategies for shaping culture is that culture is influenced by just about everything a leader does. From major organizational structure redesigns to “passing comments” that convey subtle value judgments, culture is dynamically created and re-created every moment of every day. Understanding the broad strategic levers that influence culture is usually the best starting point. By viewing culture as the result of various explicit and implicit decisions, actions and events that have transpired over time, it becomes possible to identify the factors that shape and drive culture. The following model suggests that culture results from the ongoing interplay between several variables including:
The external environment – emerging trends, competition, customer, technology, environmental, regulatory and other factors that influence the organization from the outside
Strategy and business model – the organization’s explicit (or implicit) strategies for competing and growing within the external environment
Leadership – how the organization’s leaders influence strategic direction and day-to-day operations
Processes – how strategies are executed and how work is accomplished through day-to-day practices and interactions
Structures – the formal (and informal) organizing principles that enable (or inhibit) collaboration and guide behavior
People – the skill sets and mindsets of individuals that work together to achieve common goals, including employees, partners, suppliers, etc.
Metrics & Incentives – the formal (and informal) measures that drive the behavior of individuals, teams and departments
Technology – Capabilities that provide the basis for providing and delivery value
By developing specific innovation-focused behaviors – behaviors targeted at addressing the “below the surface” roots of culture – it becomes possible to shift an organizational culture away from risk aversion and toward risk taking, away from insular thinking and toward external exploration, and away from a “not invented here” attitude and toward one of “open innovation”.
To foster sustainable innovation, today’s leaders must take a proactive role in crafting an organizational culture that supports the kinds of behaviors that help achieve their long-term innovation objectives. Three specific strategies can be used for creating a culture of innovation: Envisioning, Communicating and Sponsoring. Collectively, these strategies support both the strategic levers of culture as well as the more mundane and subtle sources of organizational culture. Envisioning: involves creating a vision of ideal future, a state that is creative, compelling, and meaningful. This future state includes the traditional “vision statement” but ensures that the business vision is high impact and describes the unique long-term difference the company can make for its customers, the community and the world. But envisioning doesn’t stop with envisioning the business. Leadership must also outline a vision for innovation itself – a vision that describes the importance of innovation to the organization in achieving its business vision. In most cases, innovation will be a critical success factor for achieving the business vision, and this relationship should be clearly articulated as a rallying cry. Communicating: Communicating for culture change goes beyond traditional “corporate communications.” While formal communications can certainly serve a role in driving culture change, creating a culture of innovation means becoming attuned to informal communications. Leaders can begin by first gaining sensitivity to the existing informal communications within their organizations. An understanding of the stories, traditions, symbols and rituals that implicitly direct employees, partners and even customers about “the right way”, “how things really work” and “what’s really valued” is essential for assessing the true nature of one’s organizational culture. Some of these will foster a culture of innovation while others may limit people’s ability to move beyond these restrictive messages and assumptions. Once existing informal communications are understood, it becomes possible to identify opportunities for reinforcing positive messages and overcoming those that impede innovation. This includes creating new stories, symbols and rituals that establish a fresh dialog and that promote values, norms and assumptions more consistent with a culture of innovation. For example, one company interested in addressing a serious deficiency
in risk taking established a “Golden Turkey Award” that was given quarterly, with a lighthearted yet serious spirit, to the individual or team with the greatest “innovation failure.” Given publicly by the CEO, the award became a symbol of the importance of accepting and proactively learning from failure as an essential element of the innovation process.
Surf Excel Analysis
We have taken the example of Surf excel for writing case study analysis and for showing that how it is sustaining its competitive advantage through managing innovation. In this case innovation management would be in form of Unilever strategies, 4Ps for surf excel and other points which comes in analysis part. Company History and Growth: Unilever Pakistan Limited manufactures and markets home and personal care products, beverages, ice cream, and spreads in the United Kingdom. The company provides food products, such as soups, bouillons, sauces and dressings, noodles, complete meals, margarine and spreads, olive oil, and tea, as well as frozen foods; cleansing and hygiene products for the home care market; and skin cleansing, deodorants, and antiperspirants for personal care market. It offers its products under Close Up, Axe, Dove, Rexona, Sunsilk, Wheel, Rafhan, Surf Excel, Comfort, Lux, Pond’s, Lifebuoy, Lipton, Brooke Bond, Energile, Knorr, Pearl Dust, and Supreme brands. The company was founded in 1872 and is based in Karachi, Pakistan. Unilever Pakistan Limited operates as a subsidiary of Unilever Overseas Holdings Limited.
Surf Excel is the oldest detergent brand to be present in Pakistan since 1960. We have always believed that dirt is a valuable way to enrich our lives, both young and old. To ensure that everyone, anywhere in the country, can share in this initiative, we're investing heavily in developing a range that suits the pockets of all income groups. This has included launching affordable skus that not only offer the top-clean advantages of Surf Excel, but also reduce the time, physical effort and amount of water needed to wash clothes by hand.
Art from the Heart
Art from the Heart speaks to children all over Pakistan and enforces the message of doing well for others. Surf has always believed in experiential learning and one aspect of learning is the selfless help for others. And in the process if your clothes get dirty, then dirt is good.
Surf excel 30g
Surf excel 2kg
Surf excel 125g
Surf excel 1kg
Surf excel has been following the Unilever’s message I.e. add vitality to life. In the beginning Surf Excel was facing competition from Ariel, the product of P&G. but very soon with the tagline “Dirt is good”, Surf Excel was Successful in regaining its market leadership. It soon emerged back as the dominant detergent of the country. The product is decided by matching the marketing insights with the local insights. The marketing report of the brand should match the region’s attitude so that the product can fulfill and satisfy the customer’s need and expectation. The packaging is designed in such a manner that it should it is able to create a Recall value among the prospective customers. It should stand out among its competitors because majority of the purchases are impulsive buying’s. Price is decided as per the economic situation and spending pattern of the target market. Distribution pricing strategy is determined in such a way so as to suit all forms of trade along with customer’s purchasing power. Promotion was the most important ingredient in the revival of Surf Excel. The event Paint Masti created a name of the brand. Re launch of the Surf with the tagline “Dirt is
Good” helps in differentiating the product, because all other brands are still focusing on the fact that dirt is bad. The selection of place to communicate the brand’s message is a crucial process. The team of Surf Excel chooses the most effective media, be it print or electronic, at the most economic and effective time. The target market of Surf Excel is mainly Housewives as deciders, whereas children as influencers. Surf Excel is available in 4 different packages so that every income bracket can purchase it. The product this year showed a robust growth and increased profit. This reflects the strong brand equity of Surf Excel and market acceptance. Surf Excel’s re penetration in the market is a model of exemplary marketing strategies. SWOT Analysis STRENGTH: Innovative marketing tactics like “dirt is good” Constantly changing as per washing needs. Strong brand portfolio. High quality manpower. Company’s strategy to have the right product at the right shop with the right kind of visibility. WEAKNESS
Is forced to spend big chunk of money on advertising due to Impulsive buying behavior.
OPPORTUNITES Growing needs of rural market Rising income certainly opening door for more market share
THREATS Major competitors like Ariel can give competition Local soaps and detergents can capture lower income market
Analysis of the Findings Surf excel is a major player in the Pakistani detergent market. today the market is not declining but shifting towards more perceived value and added brands. So every brand has to update itself with changes to retain it’s position in the market. Unilever, Pakistan’s largest consumer products company, has a problem. It cannot keep
up with demand for some of its products. These include laundry powder also. Demand is so strong that, in the case of foods, despite doubling production capacity, Pakistanis can’t seem to have enough of them. But this is just the tip of the iceberg because one can easily ascertain how much demand is there for Surf Excel as it has 41% market Share. One of the areas where consumer product companies are increasingly focusing is central and southern Punjab where two factors are driving demand. One, a string of successful harvests has meant rising disposable income for farmers. The second, interestingly, is 40 or so television channels that broadcast to viewers in this area. “They are the driving force behind building aspirations. This for Unilever is an opportunity for selling its products.
A stream of innovation and successful re launch of Surf Excel increased value of Unilever’s propositions for consumers. The latest campaign of Surf as “Dirt is good” has created a good ground for the success of marketing strategies of Surf Excel. Moreover, surf as being the product of Unilever has a plus point within itself, but still with an aggressive campaigning of “Dirt is Good” has bear increased profits along with market expansion status of the product as well as the company.
The possibilities are endless. For example, shampoo penetration is one of the lowest in Asia. Similarly fifty per cent of the population still uses laundry soap to wash their clothes which comprises mainly the low income group. Unilever has 40pc of the market for detergent powder (Surf Excel). A switch from laundry soap to detergent powder will be hugely beneficial to Surf Excel and ultimately for Unilever. Profitable growth will be sustained through focused brand building, innovation and superior management of the supply chain to achieve cost competitiveness. This will enable the business to expand its share of consumer spending despite the increasing level of competition.
As Retrieved from:
http://www.unileverpakistan.com.pk/brands/homecarebrands/surfexcel.aspx www.dirtisgood.com.pk http://www.surfexcel.com.pk Strategic Positioning - Sustainable Competitive Advantage By Mark T. Jordan