Tee Corporate Social Responsibi Summary Competitive Advantage poor, Theffects on hacen and soltware companies have beer: Oraratic: hat developed low-cost computers amed at yudentt In thirdawotd counties: AMD” ‘Fledged to. get hall the world’s population online tar 2015 with (te Personal Intrenet Communicatot; Mictotatt 9 supporting the estabéshment of computer Kiosks in wilages ee developing counties 10 alowed slured.onine access: Guants Computer, the worl’. largest contract manulactuter Gl-notebook computer. #6. making OLPC tapings selling: for $200. The GUC project underlies the socal benetits and the comeniercss! npportinlties of a cheap inpton, which ans relalively eaty to abe aning newer technologiel, apen source sofware, by sipping out unneeded hinctons ‘Dell Have. Leading computer Lurepher, Dell Ine, i lrenraging 1s. chatinctive comeetitive “competences in initiatives wilit boty buiiness and soil benefity—ining the strengths of ats direct. business mode! to generate collective elforts bo reduce envirgy comumpion and ‘the environment. The initiative centers on anpenving the eHicency of IT products. ‘reducing the harry! rreterials used in ther, andl cooperating with customers to chpote ol ‘old products. Michael Delf environmental itty focutes on Inee areas: creating Fay, await ways for burinesies ta do etter in protecting the eovicarment-—provicing. tor ‘cuunple: global reeyeing and praduct reeove'y programs for customers, with participation fequlring Hite eflert on Meir parc taking realive approaches to fessen the environments impact of product (ram design to-dapoial—helping customers to take full advantage of ‘tee Enorgy-saving lechiology and processes, acd ddvésing an Upgrades ol legacy tyaterm: tw reduce erty lage and looking te partnership with gaye ments to promot army tonvnental stewardship Fc The link between this CSR niative and the cornany’s businens ede’ and value proposition i clese ‘Micrnsaft, 1h 2007 Nicrosott may parering with qoverehents in less developed countries tg alles travalt Windars and Office vftware packages lor $3 to governments Chat subiize the cost ot computers for achoséchndran, The potential tartiness benett for Hlerenilt bh to double the amber of PC users worinide, and relfotce the compacy's market grow, Fe socal beri He gris lonesimen ih techno i some of the i 4 poorest counts Ifthe work, with the goal ot inproving Iiing ataridard and reducing Global iecually avwcet Mate! Oe“ Dat irs pc! Sep, ve Apa ik 2, ®t Sema c= Po pe Ay Ae, 2071 hutleny mrettive cavira ter aitn, first. ule in the ines id aes te prosper This chap atketiven str =) sratey and the fy; second, explain te links betwgen eorporte abou be the star (he ap pany operationpoate fre iain ‘uGcount s constantly: e eed! 10 deliver superior cus omer valve The focus of static marketing i on oreanizationl performance rather tan {1 primary concer about increasing sales. Marketing santegy seeks to deliver supesior ‘eustorner value by combing the customer-intuencing strategies of the business ina 2 coordinated set of market-driven actions. Strategic marketing links the organization with the environment and views marketing as a responsibility of the entire business rather than ‘specialized function, ‘The Marketing Strategy Process Memmentation, and management process that and market and competion analysis, market segmeniaion, statepic customer relaionshi fanagemient, ad continunus learning ubout markets Beslgning market abiven amerery ‘oxamines cunomier migeting and positioning strateyiox, marketing relationship stratepics,“tsar emeue ervirenmest of ponrtant change reqaites tavkin, sain siatepse: light, an caaemlt- ‘mest. Sarkersttiven organizations develap Closely eoondinited busines sod markets frrategies. Executives ih teeny cumpanien are febovcatiny dheit butinees model. with fue abjective of irapeoving thaws compertuve advantape. Thene changes include alver- fap mathe lncws, expanding ptoduct scope, partnering with wiber aeganisatiins, oi- Sourcing mamfactarsng, and madifying tstemal stracture: The capacity fur comtnut Pecrnstrecon requires inewative with repect lo the organizational valien procesien, feed bela that paseo Fag pexpstaa| ie he jaa eather Heimat fr rol “The teanaformation of the perma compuier arheiplace (em the dominance of Dell, nie, wd Microsoft ty the wuperiot valu ered by oompelitots tka: AMID is chipe and Geo im prftane, ane he rail seteyie vumipes require ofthe exablivhed competl- tom, are iestrative of cormpstitive revclution This competitive urnmalt ia dekceibed (nthe STRATEGY FEATURE. Camiestionilly. se ditinguth between carport, butiness, and imacketing siaiagy x showy in Exhibit |.4. Cofpotate atzaegy: consist of deciding the scope ahd purpone fof the buikingss, itt objectives, and the initiatives and resources noceaunry Wo achive the objectives. Business and marketing wtrtegy ts guided by the decisions ton man agemea! makes wbout bow, when, and whens to compete. Thit whould. be a two-w felatigeship—wlilic coports wrstexy Gefinex strategic direction, allocates resonrces, ain defines sommrinx on wha canal be done, executives Yempomuble for marketing strategy have a responsibility to infarm coeporsie stratepiats abou external change ia the market fhit serafes oppertuniten and Worry. We will ceaminy each level tuna, Wefone describing und Whssirsiiny the marketingImperatives for Market-Driven Strategy Radical market changes, new demands for superior performance, and ever-ficreer com- petition are rapidly escalating, and pose great challenges to executives around the world Even market and industry boundaries are no longer easy to define because of the entry of new and disruptive forms of competition. Customers’ demands for superior valuc from the goods and services (products) they purchase are unprecedented, as they become yet more knowledgeable and more perceptive in the judgments they make. New phases of Internet business models—Web 2.0 (the second generation of Internet enterprises after the Web 1.0 dot.com crashes of the early 2000s)—pravide wholly new forms of competition External influences from diverse pressure groups and lobbyists have escalated dramat- ally in country after country, The level of searching scrutiny of the ethical standards and corporate responsibility initiatives has never been so high and exerts compelling influence on decision makers in companies. In the face of this turbulence and complexity, compa- ‘nies adopt market-driven strategies guided by the logic that all business strategy decisions should start with o clear understanding of markets, customers, and competitors.’ Increas- ingly, it ig clear that enhancements in customer value provide a primary route to delivering superior shareholder value” ‘Nonetheless, while it is important to recognize that the challenges are extreme, there ‘is huge scope for achieving business success. The risks and uncertainties have escalated, ‘ond in many ways so have the rewards for developing strategies that deliver superior value. Innovative Web-based businesses like Google and eBay muy be prototypes, but in more conventional industries a company like Arcelor Mitta! Steel 15 illustrative. From acquiring his first stee! mill in Indonesia in 1976, Lakshmi Mitta! has grown Arcelor Mittal to a dominant force in the global stec! business. Mittal supplies more than 30 percent of the steel used by U.S. car companies and is responsible for 10 percent of world Heel output —2006 sales were $85.5 billion. Between 1989 and 2004, Mittal made 17 deals cross the globe, buying the unwanted assets of bigger steel groups or down-at heel stale mea Acquisitions have spanned Asia, the Caribbean, the former Eastern Europe U.S. (Intemational Steel Group and fspat Inland), and Europe. Mittal’s business turns ‘stound failing steel plants through & program of replacing existing management, fixing ee credit with suppliers, improving operations, shifting, production off ‘output, forming regional groups to boost purchasing power, and selling on-eore subsidiaries, Importantly, Mittal’: long-term strategy was to challenge the‘rms Vie ei a th rerio wid wen dee ol ee “torte fine ame “eth eo seo abi monitor the matket and competitive environment, Barly in the strategy-development proc- ‘os Management notds to define the vision of he corporation. Its reviewed and updated as ‘shifts im the strategic direction of the enterprise occur over time, “Top management vision may be radical and sometimes involves risks. While Amazon.com. ‘initially promtised to revolutionize retuilinye with its online operations, founder Jeff Bezos ‘wants to transform Amazon into a digital utility-—running customers’ business logistics anct Processes using the sarne state-of-the-art fochnologics and operations that power Amazon's ‘own ooline retailing Ariazon is renting out resources it uses to run its own business and has ‘even allowed outside programmers access to its pricing and product data." Objectives ‘Objectives need to be ret so that the performunce of the enterprise can be gauged, Corpo- ate objectives may be established in the foll areas: marketing, innovation, resources, ‘productivity, social responsibility, and finance.™ Examples include growth and macket- ‘hare expectations, product quality improvement, employee training and development, ‘pew-prodiuct targets, rem of invested capital, earnings growth ries, debi limits, energy ‘reduction objectives, and pollution standurds. Objectives are set ut several levels in an organization Deginning with those indicating the enterprise's overall objectives. The time frame necessary for strategic change often goes beyond short-term fieancial reporting requirements. Companies are using more than financia! measures to evaluate Jongersterm strategic objectives, and non-financial measures for short-term budgets. Resources 11 is important to place « company's siratcyic focus on its resources—assets, skills, ad capabilities” These resources may affe the organization the potential to compete in dif. ferent markets, provide significant value to end-user customers, and create barriers to ampetitor duplication. We know that distinctive capobiliicy are important in shaping the ‘organization's strategy. A key strategy issue is matching capabilities to matket opportuni ties. Capabilities that can be levered into different inarkets nd applications are par. ticularly valuable. For example, the GoreTex high performance fabrie i plications from apparel to' dental floss, is used in may Business Compasition Defining the composition ofthe busines provides direction for both corporate mad market ing strategy design. In single-product firms that seve cae market, eee composition of the business, In many other firms itis necessary to parts facilitate strategic analyses and planning. When firms wee ‘Separate the business into'§ Dey nnd Rnhin Wesley, “Auman Achat Framework fur Dagrping (xr lek iat tate eset “17 Pal elocThe We it Pian Fine be 1, 2007 th 1 Lana Mazar "Vtemg Sort of nowt.” Marketing mimens Juve 1¥29, 0, “21 Thsid W Cravens, Gordon Greeley, Nigel Pitrey, an Stasi Stn Se tyr Mn Sng marr mua ee 2 Hedi Pao ttc ‘ogi lemmeseation: The Implications af Marketing Pasuligre Wesienei Steers! ‘Sitsngy teat ProceayJowrno fthe Aéademy af Nivtieg Stiease, 15/313}, ‘aunt ao Lien Vienne. "THe Over ir Res Co havberrt vem" Harvard Business Revie Sep 4 Gols am psa A. ia i 28, David Ee eer alk inigemeny, Carputhte Strategy, 2 ed, (Hier Ridge IL2 pe al cl ann ; ‘oil oF the coimbined serve the worl OW COMA pot ju the ‘ie Sle atc Te os he “over me Fomine? mats Like alin Joid Ching throng he Bevelopmcat of affnac== i : superior knuwledge-sharing hetwork acrona tbe global business, Mita hax reinvenied the sl chor ad ren ae wy fae pero instore unl compen “This chapter examines three important qiarket-driven strategy’ iopict= * First, we develop the theme of market-driven sategy and itt pivotal role ih desis “ing and itmplementng effective buslness nnd marketing stratexies. TO achieve this, we ‘review the charactesinea of market oriented erganizmions, the development of distinc tive eapabilities, and the creation of value for customers. + Sectind, we look it the links betiveets business aad shacketing straegy und corporate ‘strategy to clarify the scope of niratexry snd the matketing strategy process. The Appt dix discusses Stestegie Marketing Planning. i + Lavels to eiaphailve the nurbulent conten! in which executives make srategic chotces, ‘ye explore some of the mavt fmportant challenges in) the modern marketplace — cscalating globalization, technological change, the Web-.0, ae the imperatives of ethi- ‘eal bebarioe and corporate social esponsibility. Market-Driven Strategy EXHIBIT 1.1 / ‘Characteristics: of Market-Lirlven Stentegien The Jogle of market-driven stratcuy is that the market and the customers that fon he tutket should be the starting post in business srmegy, Importantly, markel- ‘driven strategy provides a company-wide perapecive, which mandates more effective iimegrion of activities und processes that impact cusiomer value. The development of smarketalriven sategy i not maboriterr endeavor, A considerable amount of effort id n- essary to build » murket-driven argunizational cultire and processes. Also, the methods of fpearuring progress extend beyond shorten financial performance measures, Certainly, it be mportant that we recognize tht abor-1erm cott savings and profit enhancements ay tunderinine the schievenen! af erategie pouls and the building of superior customer yalue dubia 1-| summarizes the ehuructeristice of mnrtect-driven strategies. sents ry ou po owing et cle 4 saanerng Cusiorer va ‘Reguremern Capabitins‘furthermore the most kaportabt exports from cowmneies ice fin nt Cina ay swt juat be goods ved services bit new business models, which wil lmgact establithed ways of doing huniness in te devclopes| world, For example the GLODAL FEATURE desctites the sugresnee expansion ar acquisition strleyles of comnpahirs ib several emerging market, {tie clear that the new hreed of multinational company wil] be fiom developing nations, like iene, China, India, Rusalo, wal ever Eyypt and South Attica They ate mostly cose jpostes hal bane prevailed m brutally competitive bome muskets, agasint local competi. fore und Western miukinakionals. They have iiness modes that eas getscrate profits from ‘extremely low peices od rarajve tn Sery hough errirommens ‘The global mivkerplace ix dynamic and changing in ecmipler ways With Blidamectal effects on the corrpetitiveness anil viability of companies ia many sectorn Those who ‘ederetimate the rte of change and importa haf in interistionil relutishipa nin the risk of bing outmmumetavered Technology Diversity and Uncertainty The stills ond -vesiny requited io delle which taiical innewntion opportunities can be sccearfilly commercialized will be extremely destsiding, and the tshs of fhilite wil! be Tigh, iigerations huewr she potential to revolutionize: u range oF different inuhuusies ®eapensient sve hill cm tht manapenecit ageada. For extol, » tewearch study by MoKinsey augers that ax many uw 70 percent of company anutespers believe there {x ‘oom for iipriweret is the way'harge vormpanies anticipate sovial pressure and respon -jo UL Mangers vee-tisks for thedr lmsinesses in tome social chalienzessuch ies, ciimute “chai. date eivacy, and Healthcare —buf opportunities in other ehatleies—mach aa the ising demand for raone tical, lnalher, ancl safer peaducta* Further indicaticrs a ‘he inpurtanee of ethical nod social reapucibiliy issues aty shown in: nudes of the pea ceptions of bokess retoal stdents—wbo wit) provide the next peaerations af duty nk Buinene staderth. peat to believe thus consparees abou Work tors agutessively toward she beenpe wicca ane Lh eal rape exployment eaveerMarket tren Proxram Be, “Tojement Market tage soa Prstioning srs DE Maley. oc the mg melts lmpleanent the poationiny strategy, le