Title: Becoming MarketDriven
1Becoming 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
2What 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)
3What Does It Meanto be Market-Driven? (cont.)
Front-line behavior
4What 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
5What 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
6What Does It Meanto be Market-Driven? (cont.)
Market Learning Capability
GE Quick Market Intelligence
Bloomberg in data terminals
Wal-Mart diffusion of lessons
7What 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
8What Does It Meanto be Market-Driven? (cont.)
Market Relating Capability
Fidelity
USAA
Amex
9What Does It Meanto be Market-Driven? (cont.)
Strategy Development Process
Marketing as investment
Drivers of retention
10What Does It Meanto be Market-Driven? (cont.)
What Does It Meanto be Market-Driven? (cont.)
Front-line behavior
11Quick 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
12Target 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.)
13Target 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.)
14Elements 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
15Misconceptions 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
16Successful 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
17What 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