Responding to environmental change

Due to lack of time some small companies do not do environmental scanning, which means they do not realize that salient forces are affecting their futures. They respond to environmental changes by continuing as normal, ignorant of issues that affect their existence; or opportunities that can be right in front of them.

The second response is to delay action because they are busy right now, or in larger firms there is a bureaucratic decision making process. This can lead to marketing myopia which can be made more accute by being product-focused instead of customer-focused. An example of this is Compaq, who grew to sales of £2 billion in eight years based on processes that produced high-quality products. Their manufacturing processes sacrificed speed and economy in favour of quality to ensure excellence. This quality at any price approach served them well in the early days of personal computing, but as PCs became commodities, nimble rivals like Dell started to take their market share. This was because Compaq produced high quality products at a price that meant they gathered dust.

Failing to respond to technological changes can be just as damaging a form of delay, as was seen with Kodak’s technological myopia in response to the emergence of digital cameras.

Some companies when faced with a situation of falling sales retrench, by cutting costs on things like marketing, which in the short term can appear to be good as profits rise, but does nothing to address the problem. This policy really only delays the inevitable.

The answer for small businesses is to involve companies like Arromar, to help monitor the environment and suggest ways of carrying out some Global Stategic Repositioning. This involves a gradual, planned and continuous adaption to the changing marketing environment.

Tesco repositioned itself really well in response to changing social trends. Smaller firms can do the same thing to help them steal a march on their larger competitors, as Ocado has done.

To find out more about how I can help drop me a line.

 

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