ECONOMICS PROJECT

1. Imperatives for Market-Driven Strategy

2. Markets and Competitive Space

3. Strategic Market Segmentation

4. Strategic Customer Relationship Management

5. Capabilities for Learning about Customers and Markets

6. Market Targeting and Strategic Positioning

7. Strategic Relationships

8. Innovation and New Product Strategy

9. Strategic Brand Management

10. Value Chain Strategy

11. Pricing Strategy

12. Promotion, Advertising and Sales Promotion

Strategies

13. Sales Force, Internet, and Direct Marketing Strategies

14. Designing Market-Driven Organizations

15. Marketing Strategy Implementation And Control

Strategic Marketing

Chapter 14

DesigningMarket-DrivenOrganizations

DESIGNING MARKET-DRIVEN ORGANIZATIONS

Trends in organization design Organizing for market-driven

strategy Marketing departments Structuring marketing resources Organizing for global marketing

and global customers

DESIGNING MARKET-DRIVEN ORGANIZATIONS

Procter and GambleGlobal restructuring to improve innovation and competitiveness

Global business units for products and market development units to tackle local market issues

Change agents appointed to work across business units

Virtual innovation teams work through intranetOrganization design supports clear strategies so all business disciplines can work together

TRENDS IN ORGANIZATION DESIGN

(1) The New OrganizationTraditional structures

Centralized, vertical, “command and control”Organizational design shiftsInnovationThe knowledge-based workerManaging cultureCollaborative workingInformal networksOrganizational diversity and external relationships

ORGANIZATION COSTS Cadbury Schweppes - world’s largest

confectionery business Restructuring at cost of $900 million Organizational structure has become too

complex with too many overlaps Organizational costs account for 20% of turnover

- compared to 12% at competitors Reorganization is central to regaining

competitiveness

TRENDS IN ORGANIZATION

DESIGN (2)Managing organizational processesManaging organizational processesOrganizational agility and flexibilityOrganizational agility and flexibilityZaraZaraToyotaToyotaEmployee motivationEmployee motivation““MySpace GenerationMySpace Generation”

Alternative Organizational StructuresTraditional

Hierarchy

FunctionalStructure

ProcessOverlay

FunctionalOverlay

ProcessStructure

HorizontalStructure

PROCESS-BASED ORGANIZATIONAL

STRUCTUREProcesses that define valuee.g. knowledge management, CRM

Processes that create valuee.g. new product development,innovation

Processes that deliver valuee.g. logistics, customer service,value chain relationships

Specialist resource groups support processManagers e.g. functional departments,business units, external collaborators

ProcessLeadership

Resource Group Leadership

Coordinationmechanismsto linkprocess andresourceleadership

THE TOYOTA WAY Pillar IChallengeKaizen - continuous improvementGenchi Genbutsu - go and see for yourself Pillar IIRespectTeamwork EM2 - Everything Matters

Exponentially

THE MYSPACE GENERATION

Lives online - social networking sites are a way of life

Children of the baby boomers Ambitious, demanding and question

everything Work/life balance is very important Expected to be the highest maintenance

workforce in history and the most high-performing

“You raised them, now manage them”

ORGANIZING FOR MARKET-DRIVEN STRATEGY (1)

Strategic marketing and organization structure

Aligning the organization with the market Informal lateral integration Integrating mechanismsFull customer alignment

CUSTOMER-BASED FRONT-END ORGANIZATION

Senior Management

Back-end Units Customer-basedFront-end Units

Product customers Solutions customers

Internal linkagesShared planning and metrics

Mediationfrom thecentre

ORGANIZING FOR MARKET-DRIVEN STRATEGY (2)

Marketing functions versus marketing processes Marketing as cross-functional processThe challenge of integrationMarketing’s links to other functions

Finance/accountingOperationsSalesR&DCustomer serviceHuman resource management

Approaches to achieving effective integration

MARKETING DEPARTMENTS

Centralization versus decentralization Integration or diffusion Contingencies for organizing Evaluating organizational designs

TRANSACTIONALBUREAUCRATIC

ORGANIC RELATIONAL

Centralized FormalizedNo specialized

Internal(hierarchical)Organizationof Activity

External(market)Organizationof Activity

DecentralizedNo formalizedSpecialized

Organizing Concepts

STRUCTURING MARKETING RESOURCES (1)

Structuring issues Functional organizational design Product-focused designProduct/brand managementCategory managementVenture teamsNew product teams Market-focused design Matrix design

TRADITIONALDESIGNS

Functional

Matrix Product-Focused

Market-Focused

Traditional Marketing Organization Designs

PRODUCT-FOCUSED STRUCTURE

MARKETING ORGANIZATION BASED ON A COMBINATION OF FUNCTIONS AND

PRODUCTS

STRUCTURING MARKETING RESOURCES (2)

New marketing roles New marketing specializations Venture marketing organizations Partnering with other organizations Networked organizations

NEW ORGANIZATIONAL STRUCTURE FOR MARKETING

Vice Presidentof Marketing

Director ofProductManagement

ChiefCustomerOfficer

CustomerService

CustomerDatabase

MarketingResearch

THE MARKETING COALITION COMPANY

ORGANIZING FOR GLOBAL MARKETING AND GLOBAL

CUSTOMERS

Organizing for global marketing strategies

Business functionsOrganizational issuesCoordination and communication

Organizing for global customersThe growth in global retailersGlobal account management structures

GLOBAL ACCOUNT MANAGEMENT AT

MICROSOFT Single executive/team in charge of single customer and all global needs

Restricted to customers by revenue size but also willingness/ability to partner

Senior managers encouraged to develop relationships with senior managers at global accounts

Global business managers work across business units, functions and organizations