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Characteristics of Strategic Decisions at
three Levels
The three levels of strategic decision have varying characteristics
due to the varying responsibility and authority at different levels
of management functioning.
As you can see:
Characteristics of Corporate,
Business and Functional Level Strategies
The nature of decisions taken at corporate level give a vision to
the organization. The decisions taken are visionary in nature and
hence are highly subjective. The vision of a company evolves
after a lot of deliberations among the directors who decide that
how their company would be known after a long period of
time; say after ten to fifteen years. The decisions at this level are
therefore vital for selecting the directions of growth of a
company. Since it is very difficult to foresee what would happen
to a company after a long period of time, the decision essen-
tially should have built-in flexibility as these would have
far-reaching consequences on the operations of the company.
The decisions at this level also involve greater risks, costs,
potential profits etc. The characteristic strategies at this level may
include the following in a typical organization.
Business scope and an expression of competitive leadership
Identification of product market segments
Corporate strategic thrusts and planning challenges relevant
to the business unit
Internal security at the business level that includes
identification and evaluation of critical
success factors and assessment of
competitive position
Environmental scan at business
level and identification of product markets
and industry attractiveness.
Thus, Formulation of business strategy is
a set of multi-year broad action programs.
At the functional level, the decisions
involve action-oriented operational issues.
Essentially these are short-term type and
hence periodically made. They reflect some
or all part of the strategy at corporate level.
These decisions are also comparatively of
low risk and involve lower costs as the
resources to be used by them are from the
organization itself. The company as a
whole is rarely involved in these decisions.
They are more concrete, clear, simple to
implement and do not disturb the
ongoing processes of the company. The
decisions at this level are more critically
examined, in spite of being less profitable.
Article - 1
Wipro Ltd. is a 55-year-old company,
engaged in a wide range of businesses
including the development and export of
software, manufacture of electric bulbs and
tube lights. It has registered its trademark Wipro. In 1999, it
adopted a distinctive packaging for electric bulbs with the picture
of distinctive packaging for electric bulbs with the picture of a
rainbow flower, the slogan Applying thought, claim lasts 30
percent longer, trademarks longlite, Watts such as 60 written
in yellow colour and a red colour background. The company
introduced electric bulbs in 1994.They learnt that company
introduced electric bulbs in a deceptively similar Shivam Lamps
was selling electric bulbs in a deceptively similar packing as that
of Wipros Longlite electric bulbs packing. They went to court.
Wipro claimed that Shivam had copied the rainbow flowers
picture, the slogan Applying thought trademark Longlite, claim
LESSON 7:
CHARACTERISTICS OF STRATEGIC DECISIONS AT 3 LEVELS
Characteristic Corporate
Level
Business Unit
Level
Functional Level
Nature Conceptual Conceptual but
related to business
unit
Totally
operational
Measurability Non-measurable Measurable to
some extent
Quantifiable
Frequency Large spans
5-10 years
Periodic Annually
Adaptability Poor Average High
Character Innovative and
creative
Action-oriented Totally action
Oriented
Risk High Moderate Low
Profit Large Moderate Low
Flexibility High Moderate Low
Time Long range Medium range Short range
Costs Involved High Medium Low
Cooperation
Needed
High Medium Low
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lasts 30 per cent longer, the colour combination, layout and get
-up of their packing. The only noticeable difference was in the
trademark, Gokul.
The Delhi High Court granted an ex pate ad interim injunction
against Shivam lamp Industries as the object of granting
injunction may be defeated by delay. Shivam was restrained
from manufacturing, selling and offering for sale, advertising,
directly or indirectly dealing in electric bulbs, tube lights and
electrical fittings and apparatus which were substantial reproduc-
tion of the plaintiffs (Wipro Ltd.) copyright in the artistic work
Wipro Longlite electric bulb packing were further restrained
from using the trade mark Rainbow flower device. The court
also appointed the local commissioner to visit the premises of
Shivam Lamp Industries, where the infringing goods were
alleged to be stored and take the same into custody.
Brand Strategy
Strategic Brand Management Strategic Brand Management
The World's 10 Most Valuable Brands - 2002
VALUE ($billions)
1 COCA-COLA 69.6
2 MICROSOFT 64.1
3 IBM 51.2
4 GE 41.3
5 INTEL 30.9
6 NOKIA 30.0
7 DISNEY 29.3
8 McDONALD'S 26.4
9 MARLBORO 24.2
10 MERCEDES 21.0
Data: Interbrand Corp., J.P. Morgan Chase & Co /
Business Week AUGUST 5, 2002
Interbrands Assessment
is of Brand Power the
fullest possible view of
each brands strengths
and potential as a
marketing and financial
asset.
Brand Vision Brand Vision
MUST BE:
So big, so bold and so audicious that
expressing it never mind executing it
has a transformational effect. You start to
become what you want to be. The dream
and the reality fuse.
Kevin Clancy, Copernicus, Counter Intuitive
i.e. YOU NEED A BIG HAIRY VISION
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Article - 2
Creating a Powerful Corporate Brand
Nothing touches the customer more than how he or she
perceives your corporate image. This fundamental perception
not only determines whether the customer will conduct
business with you, it also provides competitive advantages,
increase employee morale and loyalty, and a future direction for
the organization.
Developing a powerful corporate brand is a circular, continuous,
five-phase process that can be applied at any stage of an
organizations development. The five phases are:
Preliminary Audit, Research and Evaluation
Analysis, Strategy, Planning and Development
Creative Exploration
Refinement and Implementation
Monitoring, Managing and Marketing of the Corporate
Image
A qualitative process
Part of the initial process comprises qualitative interviews with
internal and external audiences. The internal interviews are
conducted at all levels of the organization, from frontline staff
and backroom support personnel to senior management and
the Board of Directors. The interviews with external audiences
will include key customers, end users, joint venture or other
business partners, shareholders or other stakeholders, suppliers,
distributors, retailers, prospective customers and partners,
government officials, senior media people and other outside
influencers, competitors, and members of the general public.
The objective is to gain an understanding of the markets
perception of the organization by its customers, partners and
competition, and to contrast these perceptions with those held
by its own employee and management staff. Another aim is to
identify the organizations internal willingness and current
acceptancelevels for change.
The interview process answers these key questions:
How is the corporate image being portrayed and projected
today?
How do its key internal and external audiences perceive the
organization?
How does the image of the organization compare with
those of its competitors?
How does the image of the organization compare to the
image desired by management?
Will the current corporate image enable the organization to
reach the goals and objectives set for it over the next three to
five years?
By starting the corporate brand development process with a
review of the existing corporate brand perceptions, the organi-
zation has a clear view and understanding of where it is today,
an important criterion when trying to decide how one wants to
be perceived in the foreseeable future.
From here, you can conclude it is a matter of relatively simple
steps to create a well-defined corporate brand-positioning
platform that is supported by the core attributes of the
organization and a series of strategic image marketing objectives
that will help to guide future business directions and brand
development.
Your corporate brand image needs to be thoroughly thought
out, planned, nurtured, executed, monitored and, when
necessary, modified. Its the organizations most valuable
commodity and deserves to always be treated as such.
Article - 3
Let us have a look at this article about Enron as a Corporate in
India, which could not be successful.
Corporate Ethics, Corporate Culture and Corporate Image
Enron. HIH Insurance. OneTel. WorldCom. Aggressive
accounting procedures. Corporate governance. Business
honesty. Corporate reputations being destroyed. Share prices
dropping at the first hint of any financial shenanigans.
These are the headlines and the key business stories of today.
And they all relate to one critical management subject - the
Corporate Image.
Every organization has a corporate image, whether it wants one
or not.
When properly designed and managed, the corporate image will
accurately reflect the organizations commitment to quality,
excellence and its relationships with its various constituents:
such as current and potential customers, employees and future
staff, competitors, partners, governing bodies, and the general
public.
As a result, the corporate image is a critical concern for every
organization, one deserving the same attention and commit-
ment by senior management as any other vital issue.
Managing the Corporate Image
The fallout from the Enron collapse continues to impact the
global business community.
The sad fact is that it appears that it wasnt the business concept
that Enron got wrong; it was the corporate culture that was
wrong. The impact now affects Andersen, the accounting firm
that audited and appears to have approved the methodologies
used by senior Enron executives to cook the books and to
pad the financial reports given to shareholders, the investment
community, and employees. It also affects numerous other
companies as the investment community is acutely attuned to
not getting caught out by the next Enron. Even stalwarts
such as General Electric have seen their stock
prices dragged down by worries, concerns, and questions about
how aggressive the company has been in interpreting financial
reporting regulations.
Not surprisingly, the issues of ethics, business ethics, and
corporate ethics, have suddenly become key topics of conversa-
tions and the subject of numerous articles in the business
press. Unfortunately, the suggested solutions often mentioned
- more rules and regulations, more oversight entities (both
internal and external), and clearer reporting of financial transac-
tions - will merely treat the symptoms of this current
managerial crises but will do little to remedy the underlying
condition.
The true way to fix this problem is to understand how to create
the right corporate culture through the corporate image
management process.
As I wrote in four years ago Corporate Image Management: A
Marketing
Discipline for the 21st Century, corporate image management
will help senior executives to deal with another of the critical
issue facing management today: corporate ethics.
As The Economist asked in 1995, how can a company ensure
that its code of ethics is both followed and enforced?
The sure-fire way is to develop a corporate culture that not only
emphasizes ethical behavior, but a so punishes and ostracizes
those who do not live up to the desired standards. Very rarely
can a single employee engage in unethical behavior without
other employees being in the know, or at least suspicious.
A corporate culture, communicated and spread throughout the
organization, that exhibits zero tolerance for unethical behavior
and that is intricately tied to the corporate image is
managements best form of assurance against this deadly
disease.
This works a whole lot better than having internal policy police
and a bundle of quarterly forms submitted, analyzed, and then
stacked in some compliance officers cupboard.
Companies that win the marketing battle are those who have
the internal strength from knowing who and what they are, and
where they are headed three of the most critical elements for
managing the corporate image.
The underlining principle of my marketing philosophy is if it
touches the customer, its a marketing issue.
Nothing touches the customer more than how he or she
perceives your corporate image. This fundamental perception
will be the major factor that determines whether the customer
will decide to conduct business with you and, more impor-
tantly, enter into a long-term and mutually rewarding
relationship with your organization.
There may be no greater marketing issue than corporate image
management in todays increasingly competitive markets.
Likewise, there may be no greater methodology for heading off
potential business ethics and corporate ethics problems in your
own organization than through re-evaluating your corporate
image management process.
And its not just in the area of financial manipulation that
business ethics in recent years has gone astray.
How many people justify such so-called guerilla marketing
tactics as releasing highly skewed market share data? Or the
buying of market share and then claiming that market share
actually grew, as if such growth had been organic. Or how about
the stealing of someone elses idea? Or making a product
announcement of a future product when the product is little
more than a concept on the drawing board? The latter even
resulted in new terminology in the IT industry - vaporware.
Unfortunately, as marketers we are often no less dirty in our
shenanigans and tricks than our colleagues in the financial
department have been. Are the dirty tricks of politics now
firmly embedded in the business world? Is the business
community about to sink to the same level of distrust as
politicians? It is indeed a slippery slope that we collectively
appear to be on.
What can you do to ensure that your company, department, or
work group abides by the highest business ethics?
If youre the CEO, Managing Director, or other senior leader,
you need to create and manage the right corporate culture.
If you are a department head or work group leader, you need to
walk the talk, in your personal life as well as your corporate
life.
Why?
If you brag about all the copyrighted music you downloaded
for free from Napster, what message does this send to your
subordinates and colleagues?
If you take your spouse or significant other out to dinner and
put it on your corporate expenses, what message does this
convey?
If you lift materials out of some one elses presentation, or
download data off the Internet without crediting the source,
what other actions does this suggest as allowable?
Ethics is not a gray issue.
If you have a single seed of doubt about what you are doing,
or planning to
do, is wrong, it probably is!
As Dr. Martin Luther King wrote:
Cowardice asks the question - is it safe?
Expediency asks the question - is it politic?
Vanity asks the question - is it popular?
But conscience asks the question - is it right?
And there comes a time when one must take a position that is
neither safe, nor politic,
nor popular; but one must take it because it is RIGHT.
What does this have to do with marketing?
Everything.
Because, if it touches the customer, its a marketing issue.
Your business ethics will eventually be directly reflected in the
way you interact and do business with customers, suppliers,
channel partners, and others.
Conducting business the RIGHT way is the ONLY way. This
principle should be
a nucleus of your marketing strategy and corporate culture.
As Nelson Mandela said, the time is always right to do right.
If you dont, then your organization could well be on its way to
a future induction in the Hall of Shame & Failures.
Todays Most Important Managerial Issue
We live in a world of change. As a matter of fact, the rate of
change today is faster, and affects a larger portion of the earths
population, than at any other time in history.
Yet, despite all this change, there is still one constant. And this
is that marketing excellence and a strong corporate image are
firmly linked. You cannot have one without the other. At least
not for very long.
Because, at the end of the day, your competitors can mimic and
better their product offer. They can create stronger distribution
systems than yours. They can outspend you in advertising and
promotions. And, of course, they can always beat you up on
price.
But the one thing a competitor cannot mimic or copy is a well-
defined corporate personality.
As I always advise my clients, if it touches the customer, its a
marketing issue. And nothing, nothing touches your custom-
ers more than how he or she perceives your corporate image.
This makes the management of your corporate image one of
the most potent marketing and management tools available for
senior executives to use in ensuring the viable execution of your
corporate vision
Source - From the book Corporate Image Management: A
Marketing Discipline for the 21st Century by Steven Howard.
Notes