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Becoming MarketDriven

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... not customer-driven, our cars won't be either (Ford) ... Coverage of quotes and news. Terminal ease of use. On-line analytics. Historical price data ... – PowerPoint PPT presentation

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Title: Becoming MarketDriven


1
Becoming Market-Driven
George S. Day The Wharton School
  • What does it mean to be market-driven?
  • superior skills in understanding, attracting,
    and keeping valuable customers
  • How do aspirations become actions?
  • designing the change initiative

2
What Does It Mean to be Market-Driven?
  • Keep close to customers and ahead of competition
  • Love the customer more than the product
  • Customer satisfaction is the basis of our
    legitimacy (Tektronix)
  • Do business the way the customer wants to do
    business
  • Our mission is to find needs and fill them, not
    to make products and sell them
  • If were not customer-driven, our cars wont be
    either (Ford)

3
What Does It Meanto be Market-Driven? (cont.)
Front-line behavior
4
What Does It Meanto be Market-Driven? (cont.)
Be 1 in the eyes of the customer
Vision/ Mission
Become consumer intimate
Amazon Were a consumer company not a book
company
5
What Does It Meanto be Market-Driven? (cont.)
Understanding comes from living with customers
Sam Walton Be an agent for your customers
Culture
Scott Cook We owe the customer success
Paranoia about competitors is healthy
6
What Does It Meanto be Market-Driven? (cont.)
Market Learning Capability
GE Quick Market Intelligence
Bloomberg in data terminals
Wal-Mart diffusion of lessons
7
What Does It Meanto be Market-Driven? (cont.)
Structure Systems Incentives
The fact that we are multi-divisional, multi-marke
t, and multi-product is not the customers fault
3M
Hybrid designs
Externally-oriented incentives
8
What Does It Meanto be Market-Driven? (cont.)
Market Relating Capability
Fidelity
USAA
Amex
9
What Does It Meanto be Market-Driven? (cont.)
Strategy Development Process
Marketing as investment
Drivers of retention
10
What Does It Meanto be Market-Driven? (cont.)
What Does It Meanto be Market-Driven? (cont.)
Front-line behavior
11
Quick Market Intelligence
  • Quick Market Intelligence is GEs term for the
    magnificent boundary-busting technique pioneered
    by Wal-Mart that allows the entire company to
    understand, to touch the changing desires of the
    customer, and to act on them in almost real-time.
    The rhythm of the Wal-Mart intelligence-action
    cycle encourages experimentation because whatever
    doesnt work is never in place for more than a
    week.
  • The secret of Wal-Mart is that it keeps its small
    company speed and behavior as it grows bigger.
    QMI is a chance for us to get bigger by acting
    smaller.
  • The QMI rhythm that weekly pulsing of customer
    needs will become the rhythm of GE in the years
    to come and one of the key drivers of our
    top-line growth.
  • Letter from Jack Welch to GE
    Shareowners
  • Feb. 1993

12
Target Customers for On-line Financial Services
Price
Coverage of quotes and news
Standardization of systems
Terminal ease of use
Buyer (IT Managers)
Users (Traders and Analysts)
On-line analytics
Historical price data
Coverage of quotes
Lifestyle information
Influentials (Senior management, Consultants,
etc.)
13
Target Customers for On-line Financial Services
(cont.)
Coverage of quotes and news
Terminal ease of use
Price
Users (Traders and Analysts)
On-line analytics
Standardization of systems
Buyer (IT Managers)
Historical price data
Coverage of quotes
Lifestyle information
Influentials (Senior management, Consultants,
etc.)
14
Elements of a Market Orientation
Customers
Competitors
Culture is externally oriented

Configuration
  • Focus on superior customer value
  • Coherence of structure and systems

Shared Knowledge Base
Superior Ability to Understand, Attract, and Keep
Valuable Customers
Capabilities
  • Market sensing
  • Market relating
  • Strategic thinking

Channels
Collaborators
15
Misconceptions about Market Orientation
Self-Centered
  • Advantage comes from controlling assets or
    achieving functional excellence
  • Technology determines benefits offered
  • Strong sales group cuts off market signals to
    rest of organization

Customer-Compelled
  • Try to be all things to all people no
    priorities in segments served or benefits offered
  • Each function gets different inputs from
    customers and reacts separately lack of
    functional integration

Market Driving
  • Leading customers or following customers
  • Technology push or market pull

16
Successful Change Initiatives
  • Organization was engaged from top to bottom
  • Marketing and HR are supportive
  • Emphasis was on conditions that enabled their
    people to produce good results
  • Clarity of strategy
  • Adequacy of systems
  • Cultural change followed from behavioral change
  • Implementation was more about commitment than
    correctness
  • Leaders created a sense of urgency
  • Triggers of change

17
What Triggers the Change Initiative?
  • Market disruptions threaten the business model
  • Fidelity Investments
  • Advantages eroded by better aligned competitors
  • Sears
  • Opportunity costs are intolerable
  • Owens Corning
  • Strategic necessity either change or fail
  • Eurotunnel
  • Disruptive consequence of technological change
  • Changes economics of organizational information
  • Obsoletes established strategies
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