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Market- Driven Strategy
3 pages
P
erformance Implications
C
ompanies that are market oriented begin strategic analysis with a penetrating view
of themarket and the competition. Moreover, an expanding body of research
findings points to astrong relationship between market orientation and superior
performance.
C
ompanies that aremarket oriented display favorable organizational performance
compared with companies thatare not market oriented.
Distinctive Capabilities
Identifying an organizations distinctive capabilities is a crucial part of market-
drivenstrategy.
C
apabilities can be defined as complex bundles of skills and accumulatedknowledge,
exercised through organizational processes that enable firms to coordinateactivities
and make use of their assets.The Major components of distinctive capabilities
are:Organizational ProcessesSkills and
A
ccumulated Knowledge
C
oordination of
A
ctivities
A
ssets
Example:
Zaras new-product development process, which illustrates the retailersdistinctive
capabilities, where the new-product development applies the skills of their
designteam and benefits from the teams accumulated knowledge; the
coordination of activities across business functions during new-product development
is facilitated byinformation and technology. The asset is the strong brand image
possessed by Zara whichhelps the launching of the new product.
Creating Value for Customers
Customer Value
C
ustomer Value is the outcome of a process that begins with a business strategy
anchored ina deep understanding of customer needs. The creation of customer
value is an importantchallenge for the managers, since it is an ongoing competitive
challenge in maintainingsuccessful market-driven strategies.
B
eing able to overcome these challenge, the organizationis believed to be able to
successfully deliver the customer value; hence fulfilled their goals.
Superior customer value
Superior customer value occurs when the buyer has a very positive use experience
compared to his/her expectations as well as the value offerings of
competitors.Furthermore, the values could be product differentiation, lower prices
than competing brands,or a combination of lower cost and differentiation.
Conclusion
Through the deep understanding of this concept, ability to implement and manage
all theelements, as well as the constant management and updates of the strategy,
it is believed thatthe organization will able to achieve its goals.