11
,,'?>troduction
f ;~1
,~glect of competition is one of the major rea-
",J1S marketing campaigns fail. Until recently, c;~re was little to guide competitive strategy,
''IUs has changed. This chapter examines the I,trategy, tactics and reality of competition. BorlOWing from Porter's seminal works on compeition, it looks first at the forces which shape i:trategy and the major strategic alternatives. It p't/"ten uses the military analogy to examine the I~ctics of competition for the market leader, the ~trong number two, the follower and the nicher. '"Next, it seeks lessons from the observation of flapanese and British competition in the UK. It !concludes by showing how poor management . training reduces competitive options.
Competition, war and playing the game
If Wellington was right, and Waterloo was won on the playing fields of Eton, the battle was
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Marketing and competitive success
JOHN SAUJTDERS
Potter is potter's enemy, and craftsman is craftsman's rival; tramp is jealous of tramp, and singer of singer.
Hesiod, Works arid Days, eighth century BC
unique in modern warfare and offers us little which will help us to understand competition. It is important to draw the distinction between competition in play and competition in war or business. The clubbiness of sport can hinder competitiveness. The two great strategists, Carl von Clausewitz, a nineteenth-century Prussian, and Sun Tzu, a Chinese general from the fourth century Be, help us to understand the difference. In sport, well-matched teams or individuals meet in order to compete at a prearranged time and in a predetermined way. The process is as important as the end, and in Britain there is still the myth that participation is more important than winning Compare this with Sun Tzu's statement that 'The supreme art of war is to subdue the enemy without fighting'. This is like a world champion boxer retaining his title by avoiding matches. Clausewitz comments upon what to do if conflict is unavoidable. The utmost exertion of powers should be 'either to totally destroy the enemy. , . or else to ascribe peace terms to him'. In war there is no second prize. In war and business, winning is everything; participation is nothing.
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resolve differences between the factional interests that would otherwise dominate. The endresult in an effective matrix organization is the successful integration of all inputs necessary to generate profitable business. In an ineffective one the outcome is endless, pointless and acrimoniously destructive meetings resulting in confusion, plummeting morale and the playing of politics and empire-building. All this means that plans are not fulfilled and there is a reversion to another type of structure; usually of an antithetical, highly centralized, authoritarian kind. On occasion, as was the case at Oxley Developments, the mature form is a staging post on the road to full divisionalization.
In a matrix, marketing is everywhere! It appears at board level, as a resource input, in product or project management and in the executive units at the customer peripheries. The result is that all those functions, wherever they are, that could contribute to sustainable competitive advantage do so jointly and effectively.
Fully integrated location
From all that has been said so far, and especially in the previous section on the matrix form of organization, it can be seen how the activity of marketing is located in many places. This is because the function cont1ibutes to the health of an organization at every level. It also has many aspects, each with its own specialism and body of knowledge, which affect the outcome of all those decisions that directly or indirectly affect custom. Marketing is everywhere, from the top at board level right down to the activities of individual salespeople, service engineers or counter clerks. It is also present laterally across the organization affecting and being affected by R&D, production, purchasing, personnel and accounting and all other functions whose activities contribute to long-run market success. On top of this it needs to influence many outside organizations upon whose performance in the marketplace the firm depends _ advertising agencies, distributors, suppliers, facilitators and so on. Linking structures need
to be devised to connect all these therebj constructing a network which together makesr up what might be called the 'extended' organ;, ization. Product management, market manage;: ment, brand management and key accou~ management are typical of such linking or c j' ordinating devices. Organized around a pro ';" uct group, market, brand or customer 'IOgi':, these roles are played out very much at tW•, boundaries between internal functions, extet% nal agencies and the.marketplace.In such a was: is integration achieved. ;$
More systematically, though, marketing ma" not be located everywhere so much as perm ating everywhere. The distinction is more th subtle. Particularly in service industries, wheif ~o much depends upon interpersonal effe: tiveness at the point of sale or in marshalling ~, product specifically tailored to need, a mar? keting philosophy needs to be held at all levels especially at the point of contact with the cus tomer. When that state of affairs is reached thJ ultimate in integration has been achieved. A'; that point there may be no need, except iiI strategic, sales and staff functions, for there t~ be a marketing unit at all. It wi1l have worke~f itself out of a job. ~.
The effects of an enterprise's history, upon freedom oft organizational choice ;;
8 $
The organizational responses to the needs ofl the enterprise in dealing with its chosen mar•~ kets that have been mentioned so far are, in a&1 sense, ideal models. Like most ideals, they c~i only be reached slowly and sometimes not a~'1 all unless change is brought about by ignorin~1 the organization's past; in other words, bY,ill revolution. Occasionally one hears about an! enterprise that is undergoing rundamental.i revolutionary, traumatic changes in its strudl