College aantekeningen
Companies, Brand and Consumers summary (MADS)
- Instelling
- Rijksuniversiteit Groningen (RuG)
best summary to pass the exam with excellent grade
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Voorbeeld 4 van de 43 pagina's
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1LECTURE 1
READING - Reasoning About Compe ve Reac ons: Evidence from Execu ves
The ar cle tled "Reasoning About Compe ve Reac ons: Evidence from Execu ves" delves into
the decision-making processes of managers in business se ngs. It speci cally explores the extent
to which managers engage in strategic compe ve reasoning when making crucial business
decisions and inves gates the factors that in uence their behaviors.
Compe ve Reasoning
Compe ve reasoning refers to the prac ce of considering how compe tors are likely to react to a
rm's decisions. It involves predic ng the future ac ons and responses of compe tors based on
the decisions made by the focal rm. This type of reasoning is essen al for e ec ve decision-
making in compe ve markets.
Purpose of This Paper
The primary objec ve of this paper is to shed light on whether managers incorporate strategic
compe ve reasoning into their decision-making processes. Addi onally, the paper aims to
uncover the underlying reasons behind the observed behaviors. Understanding the prevalence and
determinants of compe ve reasoning is crucial for improving decision-making in compe ve
business environments.
The Studies
The research comprises three dis nct studies, each contribu ng valuable insights to the
understanding of compe ve reasoning in managerial decision-making:
• Study 1: the research team conducted interviews with managers to gain insights into their
decision-making processes. Managers were speci cally asked about their considera ons when
making pricing and new product decisions. The study revealed that managers do consider
compe tors in their decision-making but primarily focus on analyzing past or current compe tor
behavior rather than predic ng future compe ve reac ons.
• Study 2: Study 2 involved execu ves par cipa ng in a compe ve simula on game. They were
asked to discuss their considera ons when making decisions related to market entry, adver sing
budge ng, and new product development. The results of Study 2 were consistent with those of
Study 1, con rming that strategic compe ve reasoning is rela vely rare. Moreover, the
emphasis was placed on understanding past and current compe tor behavior.
• Study 3: Study 3 sought to gain insights from execu ves, including experts in compe ve
intelligence and generalists, by presen ng them with the results of Studies 1 and 2. These
execu ves were asked to assess the plausibility of the ndings and provide explana ons for the
observed behaviors. The execu ves largely found the low emphasis on predic ng future
compe tor reac ons consistent with their own experiences. Several factors in uencing the
limited incidence of strategic compe ve reasoning were iden ed, including perceived costs,
internal focus, and organiza onal culture.
Summary of the Three Studies
The studies collec vely demonstrate that managers o en priori ze factors other than predic ng
future compe tor reac ons in their decision-making processes. High uncertainty associated with
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making such predic ons seems to be a primary reason for this behavior. Overall, the ndings
highlight the importance of understanding the condi ons under which strategic compe ve
reasoning can signi cantly enhance decision-making e ec veness.
Discussions
The discussion sec on delves into the factors that raise the perceived costs of compe ve
reasoning, such as di cul es in obtaining compe tor informa on, and factors that reduce the
perceived returns, including uncertainty and the dominance of internal factors. Addi onally, it
highlights the role of organiza onal culture in in uencing compe ve reasoning.
READING - Ge ng Return on Quality: Revenue Expansion, Cost Reduc on, or Both?
In the introduc on, the ar cle highlights the cri cal importance of quality pro tability for
organiza ons while no ng the lack of consensus on the most e ec ve approach. It sets the
stage for the study's examina on of three key quality pro tability emphases: Revenue,
Cost, and Dual (both revenue and cost). The central focus is on understanding how these
emphases impact nancial and customer-related performance.
Revenue Emphasis
The study's rst emphasis is on Revenue, emphasizing the signi cance of organiza ons
priori zing revenue genera on through customer sa sfac on and reten on. This approach
is found to have a notably posi ve in uence on various performance aspects, including
nancial performance, customer rela onship performance, and future nancial metrics like
Return on Assets (ROA) and stock returns.
Cost Emphasis
In contrast, the Cost Emphasis focuses on e ciency and cost reduc on. Surprisingly, this
single-minded focus on cost reduc on alone shows no signi cant impact on rm
performance. This nding challenges the conven onal belief that cost reduc on should be
the primary goal of quality improvement e orts.
Dual Emphasis
The Dual Emphasis combines both revenue and cost aspects in quality improvement
e orts. However, the study reveals that this dual approach also does not produce
signi cant posi ve e ects on performance. In fact, it nega vely in uences stock returns,
sugges ng poten al organiza onal con icts when simultaneously pursuing revenue and
cost-oriented quality improvement.
Methodology
The methodology sec on outlines how the study conducts its analysis using both primary
and secondary data. Primary data is collected through surveys, measuring manager-
reported performance, while secondary data examines nancial metrics like ROA and stock
returns. Various sta s cal techniques are applied to examine the rela onships between
quality pro tability emphases and performance.
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Results
The results sec on con rms that a Revenue Emphasis yields the most posi ve performance
outcomes, followed by Cost Emphasis and Dual Emphasis. Importantly, these ndings are
robust across di erent modeling approaches and remain consistent despite varia ons in
compe ve environments, past emphases, and quality informa on systems.
Discussion
The ar cle explores poten al explana ons for the results. It considers organiza onal
dynamics, learning systems, and how analysts perceive di erent emphases. The poten al
impact of service intensity is also explored, ul mately sugges ng that the Revenue
Emphasis is universally e ec ve, regardless of whether a company provides goods or
services.
NOTES
RESOURCES: ASSETS & CAPABILITIES
The resource-based view (RBV) of the rm is a management theory that suggests that a rm's
resources and capabili es are the primary drivers of its compe ve advantage. According to this
theory, a rm's resources and capabili es can be used to create value for customers and to
di eren ate the rm from its compe tors.
Management of strategic capability is central for achieving compe ve advantage: companies
should focus on building their core competencies (= unique strengths and capabili es that a rm
possesses) to gain compe ve advantage.
Some basic ques ons that companies should consider when designing their marke ng strategy
are:
1. What are your strengths and weaknesses? iden fy their strengths and weaknesses both
overall and in comparison to their compe tors.
2. What is your resource base? iden fy their skills and processes in which they excel and their
ability to produce next-genera on products or services.
3. What are your exploitable marke ng assets? iden fy their current and poten al marke ng
assets and focus on those with a defensible uniqueness.
MARKETING ASSETS
Marke ng assets are the resource endowments that a rm has built or acquired over me.
There are four main types of marke ng assets:
1. Customer-based assets: These are the assets that a rm has built up over me through its
rela onships with its customers (ex. customer loyalty, customer sa sfac on, and customer
knowledge).
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2. Supply chain assets: These are the assets that a rm has built up over me through its
rela onships with its suppliers and distributors (ex. reliable supply chains, e cient logis cs,
and strong distribu on networks).
3. Internal marke ng support assets: These are the assets that a rm has built up over me
through its internal marke ng e orts (ex. strong brand iden ty, e ec ve marke ng
communica ons, and skilled marke ng personnel).
4. Alliance-based marke ng assets: These are the assets that a rm has built up over me
through its strategic alliances with other rms (ex. access to new markets, shared
resources, and joint marke ng e orts).
MARKETING CAPABILITIES
Marke ng capabili es are the skills and processes that a rm possesses to deploy the assets and
create a compe ve advantage. For example, our marke ng assets are a car, but we need skills to
drive the car (marke ng capabili es) to make use of our car.
There are several di erent marke ng capabili es:
- Adver sing, promo on, and selling: These are the capabili es that a rm possesses to
e ec vely communicate its value proposi on to customers and to persuade them to purchase
its products or services.
- Pricing and tendering: These are the capabili es that a rm possesses to e ec vely price its
products or services and to nego ate contracts with customers.
- Product and service management: These are the capabili es that a rm possesses to e ec vely
develop, design, and manage its products or services.
- Distribu on and logis cs: These are the capabili es that a rm possesses to e ec vely
distribute its products or services to customers and to manage its supply chain.
Marke ng capabili es have a higher impact than R&D & Opera ons capabili es. This also depends
on the context of the market where the product is in. If the market is not changing a lot and is
stable, marke ng has less impact for example.
WHAT IS DRIVING PROFITS?
Revenue growth and margin growth are the two primary components of pro t growth. Marke ng
capabili es, including CRM capabili es and brand management, can in uence both revenue
growth and margin growth.
- CRM = Customer Rela onship Management, we want to create loyal customers. It has a
nega ve impact on revenue growth, but posi ve on margin growth. This is because loyal
customers are already our customers, and since they are more loyal they will buy our more
fancy stu where more margin is on.
- Brand management = Brand management focuses on how make more people aware that our
product is on the market, this will have a posi ve impact on our revenue, but a nega ve impact
on our margin. Since the customers only buy the entrance level stu because they are new
mostly and they don’t buy the expensive stu where more margin is on.
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