Corporate Appraisal

chapter 3

strategic marketing(PGDBM 339) BIM Bangalore

ranganath iyengar

SIIPL ERRC

discussion context

• Meaning of Corporate Appraisal• Factors in Appraisal• Corporate Response to different publics• Corporate Publics and their concerns• Corporate Publics and corporate strategy• Factors in appraisal: Value orientation of top management• Top management values and Corporate culture• Measurement of values• Value orientation and corporate strategy• Factors in appraisal: Corporate resources• Success factors for different industries• Past performance of business units• Summary

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Meaning/Scope of Corporate Appraisal

• Marketing strategy – prepares company to interact with changing environment.• Corporate appraisal – Examination of the entire organization from different angles.

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CorporateStrategy

Business UnitMission

Value orientation ofTop Management

Corporate Publics

Corporate Resources

External Environment

Past Performanceof Business Units

Scope of Corporate Appraisal

Marketing StrategyChange Culture

EFQM Business Excellence model

Leadership ProcessesKey

PerformanceResults

People

E N A B L E R S R E S U L T S

I N N O V A T I O N A N D L E A R N I N G

Policy &Strategy

Partnerships& Resources

PeopleResults

CustomerResults

SocietyResults

Factors in Appraisal

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Society

Businesscommunity

Government

Banks &Lenders

Suppliers

Customers

Employees

Owners

CorporatePublic

Today’s context- Corporate Governance- Corporate Social Responsibility- Work / Business Ethics- Business Controls- Information Governance- KYC (Banks & FIs)- Sustainable manufacturing

Pointers - issues

Act in isolationWaste resourcesPolluteExploit peopleNot pay taxes

Businessstrategy

Growthagenda

Developmentagenda

Corporate Response to different publics

• Corporate Response to different publics– Share when there is an abundance– Austerity during harsh times except stockholders

• Example themes– Environmental pollution – recycling, sustainable manufacturing– Equal opportunity employer– People care– Companies helping society – e.g. CSR

• Emergence of responsible marketing– e.g. Coke, Nokia

• Marketing Strategy impact– Manufacturer – Distributor – Retailer alignment– Product recycling and costs

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E.g.CorningBPTATABirla

Industrialecosystem

UserEcosystem

Ecologicalsystem

Product Life cycle policies

Natural resourcepolicies

Waste managementpolicies

Energy Use

Service Use

Durable product use

Consumable product use

Renewable resource cost

Non Renewable resourcecost

Finite media

Energy sources

Product / Servicesupply chains

EnergyproductionMaterial

harvestingDemandfulfillment

Waste materialdisposal or recovery

Directutilization

Source: SMM – Joseph Fiskel (Journal of Minerals, Metals and Materials Society)

Applied learning:Framework forSustainable MaterialsManagement

© SIIPL Entrepreneur Resource and Research Center 2008-09

Corporate Publics and their concerns

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Society

Immediatecommunity

Government

Banks &Lenders

Suppliers

Customers

Employees

Owners

CorporatePublic

Business reliabilityProduct reliability

Product improvementPrice

ServiceContinuity

Marketing efficiency

PayoutEquity

Stock priceNonmonetary desires

Monetary rewardRecognition

PrideWork environment

ChallengeAdvancement

Continuity

PriceStability

ContinuityGrowth

Sound riskInterest payment

Repayment of principal

TaxesSecurity & law enforcement

Management expertiseEmployment generation

Economic growthEfficiency

Employment

Civil rightsUrban renewal/DevptPollution abatement

ConservationRecreation

Medical care

Redeployin business

StakeholdersProfit sharing

NPAT

The current dilemma for businesses…..

- Social agendas- Development agendas- R&D- Market development- Customer education

Where is the money ? EmployeeProfit sharing

Activism

-BPO employee association-Environmental NGOs-Political – local jobs-Product safety-Consumer forums

Corporate Publics and corporate strategy

• Corporate Publics and corporate strategy– Cannot satisfy all…..

• e.g. low price products but with product improvements

• e.g. margin pressure cannot be sustained given change in input costs

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Marketing& PR

CustomerPromise

PricingTransparency

ConsumerEducation

Productstandards

Customercare

programs

CorporateStrategy

Factors in appraisal: Value orientation of top management

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Top management- CEO / senior management aspirations and habits impact company culture- e.g. IBM – dress code, Apple – product innovation, Tata – decentralized work culture

Importance of value orientation- Not all companies want to grow- Stability vs. growth- Social vs. business agenda- Quality vs. quantity (e.g. MTR)- Niche vs. Mass market (e.g. Murugan Idli shop)

Values – organization cultureCorporate culture affects entire organization perspective including marketingMarketing approach – direct vs. subtle (Pepsi, Sprite); flamboyant - Kingfisher

Categories of culture

Academics (IBM, TCS, NDDB)Clubs (UPS, HUL)Baseball teams (Law, Acctg firms)Fortresses (Big Bazaar)

Measurement of values

• Measurement of values usually done by an external person

• E.g. Self evaluating scale developed by Allport, Vernon and Lindsey

• Value classes – Religious, Political, Theoretical, Economic,

Aesthetic and Social

• Values – observable behaviors – impact on products, packaging, go

to market…..

• E.g. IBM, Maruti – service philosophy; Microsoft, Google –

Innovation; Toyota – Quality; GE, Reliance – Lowest cost

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Factors in appraisal: Corporate resourcesSuccess factors for different industries

• Resources – Money, People,

Materials, Technology,

Management and Marketing

• Marketing strategy is impacted by

all of the above….• e.g. price discovery, cost

determination, features

vs. benefits,

• e.g. factor combos – profit

margins + dividend policy

determines internal funds position

• Factors – also measured as

organizational competencies

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Factor or function To increase profit To gain share

Product range / variety

Department store Components

Distribution networkBeer Films, Home appliances

Design Aircraft Mobile phones

Past performance of business units

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Effectiveness

EfficiencyAdaptability

Relative success e.g. market share

Business outcome e.g. Profit, Funnel qualityResponse to change

e.g. new product success

The marketer should look for:

Financial measures & ratios

Capacities and productivity

Depth in execution

People productivity

Summary

Meaning of corporate appraisal

Role of corporate publics

Value orientation of top management

Impact of appraisal on business and marketing strategy

Corporate resources and business drivers

SBU prior performance and impact on marketing strategy

Discussion

Frequency of appraisal – arguments for and against

Pros and Cons of an external consultant doing the appraisal

Appraisal and Change management

Corporate publics expectations

Value orientation of top management & measurement

Growth or sustainability?

Summary – Q&A