D1 evaluate the appropriateness of business information used to make strategic decisions-UNIT 4 BUSINESS COMMUNICATION
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Btec Business Studies
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D1 evaluate the appropriateness of business information used to make strategic decisions-UNIT 4 BUSINESS COMMUNICATION
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D1 evaluate the appropriateness of business information used to make strategic decisions.
A strategic decision is a decision business managers and head of departments make that can
drastically change how a business operates and their goals. For example, a marketing
manager may decide to reduce the price of their product to be lower that their competitors
in order to attract customers. This will increase the customer loyalty and market share of
the company.
For this question I am going to use three functional areas in Safaricom. They include
marketing, technology and equipment and human resources.
Marketing
The marketing department is a functional area that is responsible for making decisions that
influence the businesses market share and popularity. They do this by analyzing what the
potential consumers may want form the company and using the 4Ps (price, product, place,
promotion) to attract the customers to the product. The marketing department is in charge
of deciding the pricing of the company’s products in order to attract new customers or get
customers from their competitor. The most common way of doing this is by reducing the
prices lower than their competitors because the lower the price the higher the demand. the
marketing department in Safaricom however did not reduce the price of their services lower
than their competitors. This is because Safaricom’s market share (63%) is so high that to an
extent they are considered a monopoly. Their closest competitor is airtel with a market
share of 21%. Because of this, Safaricom have taken the advantage of the position they are
in and increased the cost of their services like their calling service and mobile data service in
order to make more profit. The marketing research team mainly uses web-based
information to compare their prices of their competitors in order to make a decision on the
pricing of the product. This type of information is the cheapest and the most reliable
because the competitors are bound to put the pricing of their products on the company
website or advertisements. This type of information is very reliable because the competitors
are bound to not lie to their customers about the pricing of the product because they will
risk damaging their brand. The least effective type of information for this procedure is
verbal communication. Verbal communication in general is bound to be unreliable because
humans can cause errors by forgetting key details or lying to the receiver for their benefit.
For example, if Safaricom wanted to know the cost of airtels voice call service by asking an
employee in airtel, the employee might forget the exact figures or lie to Safaricom because
they are a competitor. The marketing department carries out market research to make sure
that the product they are selling is not outdated and fits the needs of their target
customers. They also have to make sure that the quality of the product they are selling is up
to par. For example, the marketing team in Safaricom suggested that Safaricom should stop
selling modems because people are using Wi-Fi networks more and usb tethering to their
computers. This strategic decision made sense because modems where used for providing
internet access to laptops and computers through mobile data. However, todays
smartphones can provide internet service to a computer through USB. This feature is called
USB tethering and it is on almost every smartphone today. This feature allows smartphones
to act as modems. This fact caused Safaricom to introduce home fiber internet because it is
by far the most relevant service that Safaricom users need especially during the covid-19
pandemic. This has caused Safaricom to earn profits from their home fiber service unlike if
they continued selling modems. For market research, the best type of information to use is
is verbal information because the information that is being said is bound to be recent
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