CIM marketing Leadership Analysis PDF

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CIM post graduate assignment ...

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Marketing Leadership and Planning

July, 2018

9980868

1

Marketing Leadership and Planning

July, 2018

9980868

Improving customer relationship management at Arpico

Word Count Task 01:2154 Task 2.1 -1865

Task 2.2 -875

Task 3.1 -2050

Task 3.2 -929

Task 2.3-810

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Table of Content 1. Summary of Audit finding ----------------------------------------------------------------------------------4 2. Task 1: Evaluating Arpico resource base-----------------------------------------------------------------5 3. Task 2.1 CRM Plan ------------------------------------------------------------------------------------------10 4. Task 2.2 Identified barriers (Briefing paper) -----------------------------------------------------------15 5. Task 2.3 Report on CRM measurements-----------------------------------------------------------------17 6. Task 3.1 Report on Corporate culture -------------------------------------------------------------------20 7. Task 3.2 Arpico leadership measurements --------------------------------------------------------------22 8. Reference page-------------------------------------------------------------------------------------------------26 9. Appendix 1- Arpico background---------------------------------------------------------------------------27 10. Appendix 2 -Strategic Audit ------------------------------------------------------------------------------29 11. Appendix 3 -Market orientation survey ---------------------------------------------------------------33

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Table 1.1) SUMMARY OF AUDIT FINDINGS Below is the summary of the Audit findings on the strategic Audit carried out on the Appendix 2 Audit Area Strategic intent for CRM to enhance competitive advantage

Key Findings Vision, Mission and values there for the name sake. Lack of understanding on the broader idea and application this into current culture has affected the customer experience. Employee’s lack of understanding and motivation has effected low level of employee commitment for the strategic journey.

Customer insights understand the CRM

to Customer has maintained long standing business relationship and partnership with “Arpico”. As A-2.20 shows that leadership has not done strategic investment to understand the customer retention of 35%, repeat business, loyalty, up sell ratio 12% and cross sell activates. Lack of presence in this area’s leading to low level of understanding customer information due to non-availability of integrated CRM system and inter functional co-ordination amongst the department. Digital strategy Long standing customer relationships and network is established. As A2.15 and 16 stated that there is no effective customer relationship management due to nonavailability on line strategy, customer data information, strategies on customer retention, up sell, cross sell customer life time values. There is only 2.06% engagement with online customers. Resources, capabilities and Own plant and ample parking provide wider customer access to shopping at Arpico core competencies to providing positive customer experience. Corporate image provides the positive understand the customer customer experience. Strong cash flows and customer relationship supportive for the experience customer experience but there is underutilized of resources and capabilities at “Arpico” (Net assesses grown by 12% in 2017) Culture and leadership There is an open culture prevail in the organization. According to A-2.13 Employees are with the right attitude. Lack of experience and skills in customer experience has created dissatisfied customers leaving higher rate of customer churn rates(Refer Appendix 2.13) Thus employees had not been involved in the strategic development process Digital marketing strategy to Customer cannot make purchase on line and this effect the customer relationship understand the CRM management at Arpico”. The lack of digital strategy has been effected in collecting vital customer data in order to enhance customer experience, loyalty, cross sell, upsell and customer recommendation and advocates to Arpico. Value chain to understand Continue service delays at “POS” has affected the customer experience. Lack of the customer experience service standards, quality of products, after sales and guarantee of branded items has effected lower customer shares continue to result in drop of customer share of wallet. Macro environment to 30% Tax imposed on branded items have directly resulted in drop in customer share understand the customer of the branded items. Economic volatility and growing consumer trends on social experience media focus shift in on line sales to drive the sales growth. Lack of strategy area has resulted in stuck in the middle. Marketing strategy to The lack of differentiation strategy and only focus on standard commodities have understand the customer resulted stuck in the middle. Continue price increases effected negative CRM. experience Six market model to There is long standing business relationship with all the markets. However, things understand the customer have taken for granted escalating customer complaints and customer issues together experience with lack of focus on service standards and quality of the products result in lack of customer satisfaction and this has affected the customer relationship management. Cultural web to understand Strong open culture to maintain flawless operation. However, lack of motivation and the customer experience lack of participation in the strategic process result in lack of commitment in customer relationship management. One way dialogue does not encourage creativity and innovation for strategic development. Customer life time value to There is lack of loyalty and rewards for the customer. Hence customer life time value understand the customer continue to drop. Since the customer retention and loyalty does not effectively look at this has resulted in lower level customer life time value maintained at “Arpico” experience .35% of Retention rate is stagnated over the years.

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Marketing Leadership and Planning

July, 2018

9980868

To

: The Board of Directors of Arpico Company Pvt Ltd

From

: Duesche Duke (Marketing Manager at “Arpico Company Pvt Ltd)

Date

: 30.06.2018

Subject

: Evaluating resources and competencies at Arpico in terms of delivering competitive advantage.

Back ground information – It is important to evaluate the effectiveness of your integrated marketing plan to see how the organization has achieved its objectives. Are they falling behind and see what strategic steps it should take to improve the company performances. 1.1 Evaluating assets and competencies in term of Supporting Competitive Advantage of Arpico In the language of traditional strategic analysis, firm resources are strengths can be used to conceive and implement their strategies (Barney, 1991). A firm’s resources include tangible and intangible asset which benefits in the efficiencies of the collective operations. What is important in the current volatile market for organizations is to recognize the key resources and their conversion to organizational competencies. Evaluating Assets and Competencies of Arpico Assets and/ Resources could be defined as any attribute that is tangible or intangible , physical or human , intellectual relation that can be deployed by company that support to produce efficiency and effectiveness , market offering that has a value for some market segments. Firms should build resources to contribute its ability to produce valuable market offering effectively and efficiently. Meanwhile, management of resources and competencies would assist organization to achieve competitive advantage. Arpico as a largest conglomerate in the super market model just started the operation with buy and selling and now have diverse into different products and services due to various business strategies and effectively deploying their asset and competencies in managing their business portfolio. As per Appendix describe their different assets and competencies would provide different competencies in leverage to produce competitive advantage. Hence it is important to understand the priority and their value how these had been deployed to use competitive advantage. Table 1.1) – Evaluation of priority of Assets and competencies at “Arpico”

Intangible

Resources Organizational Culture and incentive system

Brand and reputational assets

Customer relationship management

Evaluation Organization culture is open but and lack of new skills and experience to offer effective customer experience. Employees have the right kind of attitude but there is necessity of new knowledge and industry experience to offer greater customer attitude, care and respect for clients. Top management does not perceive the change management for innovation and creativity. Lack of encouragement from top management and lack of motivation stagnate in the middle. Unlike the competition employees just carrying out a routing job. Employees of the month and absence of staff rewards program directly affect the customer experience at “Arpico”. Brand value has increased by 35% but strategically company could have done more with regard to customer experience. There is lack of strategies for capture more customer penetration strategies and retention strategies to increase customer share of wallet. This directly affect the customer life time value, recommendations and advocates as per appendix. Lack of industry awards certificates effect the customer trust and confidence that has effected brand value overall. Long standing customers. However, there is lack of customer recognition due non absence of on line system and integration of customer data in to system. There is lack of customer motivation to encourage repeat purchases, loyalty, referrals and recommendations. Lack of loyalty and rewards shifting customer towards competitor brands. Continue to drop product quality issues, lack of standards and product guarantee has affected the customer relationship management. Service delays, lack of experience and knowledge and continue to drop product and service standards result in customer relationship management. 5

Marketing Leadership and Planning

Physical

Tangible

Financial

Organizational Assets

Human Assets and intellectual capitals

July, 2018

9980868

Machinery has been deployed but there should be new systems and methods to capture sales details on department wise and to retrieve customer data at a rapid speed to take effective business decision. No departmental records are maintained and lack of customer purchase transaction. However, there is ample of parking facility encourage the customer to do shopping at convenient and this is unique feature of “Arpico” effecting positive customer experience. Company is back by Richard Pieris group of companies and strong financial support at continuous intervals effecting investments in new projects. They have diversified into international markets and have now become a one of leading rubber exports company in the country. Distribution and suppliers network effect the value chain effectiveness. Lack of service qualities maintained and lack of key perform indicators and service discipline effecting the customer relationship management. Employees and stakeholders have positive attitude and wants the carrier growth with the organization. However, lack of employee training on new skills and diverse experience shows a significant gap in training and development. Hence it is important to improve this in order to increase customer relationship management at “Arpico”

1.2 Routes for competitive advantage of Arpico VRIN model could be used to understand sources of competitive advantage in any industry .Assets needs to be developed to build competencies and need to assess the VRIN in order to evaluate how sustainable they are in the context they operate. The identification of these characteristics are important to development sustainable competitive advantage in the market. Valuable - Valuable resources as per appendix / table could be identified as valuable resources and this support for their competitive advantage to leverage. Human resources are their valuable resources to create the competitive advantage However, their lack of experience and knowledge effecting the customer experience at “Arpico” Rare – Financial back up and incremental cash flows and strong supply chain network are some of resources that gives them competitive advantage. Island wide distribution channels and strong relationship with them together with valuable resources would provide the competitive advantage for “Arpico “ Inimitable – Resource need to be costly to imitate and strong brand Heritage build over is something that competitor cannot be replaced and where “Arpico” managed to build on competitive advantage over the years. Non- Substitutable- It is difficult to imitate strong cash flows and ample parking facilities at Arpico. This has given them competitive advantage to increase their market share. (Source: Thomson et al 2013 and Barney 1995) Further, Hamel and Prahalad (1990) developed three tests that can be applied to identify core competencies in a company. Firstly, potential access to wider market, secondly its significant contribution to the customer’s perceived value and thirdly competence being difficult to imitate Table1.2) evaluating Arpico Competencies Competency base

Competency elements

Evaluating of three tests of competencies Market reach Perceived value

Physical Assets

Island wide distribution network

Organizational Assets

Long term relationship with customers and staff

Arpico is able to reach island wide FMCG markets through own outlets. Arpico has to segment the market in order to suitability in competitive advantage

As appendix 2.3 shows Arpico is yet to be developed brand reputation. Arpico is yet to be reached high customer satisfaction level

Brand reputational assets

Powerful brand image with corporate reputation

As appendices 2.3 and 5 stated

Very low customer intention

Inimitability Arpico owns 3 patents for furniture products and 4 trade license for cushion works Arpico is incrementally developing its entry barriers in furniture segment. Very low

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1.2.3 Mapping Current Resources and Competencies to Support Competitive Advantage at “Arpico” Diasz (2013) defines competitive advantage as means by which a company would use its core competencies and leverage its strategic strengths whilst investing and sustaining a long term strategy to outperform its rivals and earn higher than average profits. Table 1.3) –.Evaluating strength of competitive advantage Element Create entry barriers Create competencies

Sources Economies of scale and perceived advantage Sustainable cash flow

Sustainability

Superior Knowledge

Disproportionate profits Investment

Higher margins

Fit with the environment

Moderate As “Arpico” need to align with its external environment and their resources and competencies need to further enhanced Low Lack of top management commitment result of low level of

Leverage

Back by Richard Pieris group of companies

Evaluation High – High economies of scale and largest an ample parking under one roof has created entry barriers for competition High – High level of incremental cash flows at regular intervals avoid financial risk ability invest in new projects on regular intervals High Competitive knowledge and high brand image over 50years. High Disproportionate profits High Significant investment from one of largest conglomerate in the country.

1.4 Recommendations to the Current CRM Strategy to Enhance “Arpico” Identity. Barer (2007) confirmed that organization may process personalities and reflect the corporate identity is the totality of identification of the organization. Berar suggest that identify could be communicated through corporate communication symbolism and behavior and communication. Current Identity of “Arpico” - Over the past decade “Apricot” has become largest conglomerate and market leader in the super market concept in Sri Lanka. Company has developed a 3.5 Billion worth asset of public quoted company. Having 85% of market share, logo, color and brand together with corporate communication has been key success factors to win the market share. However, company has failed to capture emergence of technology revolution with dynamic growing needs of customers to continue to uphold the status and market share. Table 1.4) – Evaluating Existing CRM strategies using corporate identity (Refer Appendix 2.22) Identity Actual identity

Current Evaluation As per A-2.22 it shows the current identity level and perceived identity level and there is a significant gap needs to fulfill in line with top level brands in the sector regard to customer experience.

Communicated identity

There is a significant gap in communication gap in their communication strategy. Customer information is not being captured, lack of integrated CRM system, on line communication, customer services is the present communicated identity of the organization There is a significant gap and customer does not see “Arpico” to become their preferred services partner as continue to fail in their respective identities

Desired identity

Application for Arpico “Arpico” has not utilized the resources and capabilities effectively and efficiently to enhance its corporate identity. The vision, mission and values are just there and there is no significant contribution to the customer experience due to lack of understand and the application into the system. Company need to revamp its communication strategy to cover the gap. Lack of on line and capture more customer retention and loyalty important to build bottom line to develop a communication strategy. Employees need to communicate effectively through training and developments to develop competencies. Lack of customer motivation and lack of customer gathering at “POS” effect the customer purchase details and

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Marketing Leadership and Planning

Ideal Identity

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Ideal identity it to become preferred brand of Organization need to align its strategic the customer but there is significant gap due direction to reach the Ideal identity of the to lack of customer experience of “Arpico” organization.

1.5) Recommendation for improve CRM at “Arpico “ Business Implication Very low training and customer experience

Recommendation Introduce effective CRM training and experience program

Absence of Online CRM strategy

Change management strategy

Absence of loyalty program

Introduce CRM strategy

Lack customer data integration

Introduce eCRM system

Lack of customer satisfaction

Improve the standards and quality of the products and services

Justification Employees shown weaknesses in managing and handling customer issues and knowledge in effecting positive customer experience. Employees needs to be trained to think out of the box and become creativity and innovative to contribute for positive customer experience and there is a si...