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Business Intelligence For Managers Essay

Organization’s mission becomes the cornerstone for its strategy and is necessary for the organization to assess the process identifying the objectives of each functional area. Emphasises on the accomplishment of the organisational objectives, which leads forward to it strategy.

Functional Area Objectives for Strategic Management

The purpose of strategic management is to determine and communicate a picture of enterprise through a system of major objectives and policies. Strategy is concerned with at unified direction and efficient allocation of organizations resources. A well made strategy guides managerial action and thought which provides an integrated approach for the organization and aids in meeting the challenges posed by the environment.

The nature of strategic management is correlated by the following facts:

  • It is a major course of action through which an organization relates itself to its environment particularly in meeting the objectives of the organization.
  • It is s blend of external and internal factors. To meet the opportunities and threats provided by the external factors, internal factors are matched with them.
  • It is the combination of actions aimed to meet a particular condition, to solve certain problems or to achieve a desirable end. The actions are different for different situations.
  • It is future oriented which are required for new situations which have not arisen before in the past.
  • It provides overall framework for guiding enterprise thinking actions.
  • It requires some systems and norms for its efficient adoption in any organization.

Attributes of strategic management is characterized by four important aspects:

  1. Long Term Objectives
    Strategy is formulated keeping in mind the long term objectives of the organization. It is so because it emphasizes on long term growth and development. Strategy is future oriented and therefore concerned with the objectives which have a long term perspective. The objectives give directions for implementing a strategy.
    2. Competitive Advantage
    Whenever strategy is formulated, managers have to note the competitors of the organization. The environment has to be continuously monitored for forming a strategy. Strategy has to be made in a sense that the firm may have competitive advantage. It makes the organization committed enough to meet the external threats and profit from the environmental opportunities.
  2. Vector
    Strategy involves adoption of the course of action and allocation of resource for meeting the long term objectives. Amongst the various courses of action available, the, managers have to choose the one which utilizes the resources of the organization in the best possible manner and helps in the achievement of the organizational objectives. A series of decisions are taken and they are in the same direction.
  3. Synergy
    Once there is a series of decisions to accomplish the objectives in the same direction, there will be synergy. Strategies boost the prospects by providing energy.

Example to illustrate the essence of strategy in a firm dealing with chemicals. The scope of the firm relating the product is basic chemicals and pharmaceuticals. The objectives of the firm can be:

Strategic decision making is the responsibility of top management. Strategy operates at different levels vis-a-vis:

  • Corporate Level
    • Business Level
    • Functional Level

On the study of environmental analysis, Kodak chose four grand basic strategic alternatives to garner the market share:

  1. Expansion: This is adopted when environment demands increase in pace of activity. Company broadens its customer groups, customer functions and the technology. This kind of a strategy had a substantial impact on internal functioning of the organization.
  2. Modernization: Digital technology was used as the strategic tool to increase production
    and reduce costs in long run. Through modernization, aimed to gain
    competitive and strategic strength.
  3. Integration: Through forward integration it gained ownership
    over distribution and retailers, thus moving towards
  4. Diversification: Diversification through the horizontal route involved change in business definition in terms of customer functions, customer groups or alternative technology. It was done to minimize the risk by spreading over several businesses to capitalize organization strength and minimize weaknesses, to minimize threats, to avoid current instability in profit & sales and to facilitate higher utilization of resources. The figure below explains the logic of the competitive advantage.

Molecular Modeling Of Long Term Approach

Environmental Analysis

A large part of the process of environmental analysis seeks to explore the unknown dimensions of the future which emphasizes on what would happen in the near future.

Factors which influence environment directly including suppliers, customers and competitors

  • Factors which influences the firm directly including social technological, legal and economic factors.

For doing the environmental analysis, there can be the strategic advantage profile which provides for analysis of internal environment, and the organization capability profile as well. For analyzing the external environment, environmental threat and opportunity profile has been be adopted which was given scant regard. An organization has to continuously grow in term of its core business and develop core competencies.

The analysis provides for elimination of alternatives which are inconsistent with the organizations objectives. Organizational threats and opportunities, strengths and weaknesses helped in identifying the relevant environmental factors for detailed analysis of the management.

Setting of organizational vision, mission and objectives is the starting point of strategy
formulation. The organizations strive for achieving the end results which are ‘vision’,  ‘mission’, ‘purpose’, ‘objective’, ‘goals’, ‘targets’ etc. The hierarchy of strategic intent lays the foundation for the strategic management of any organization. The strategic intent is to make clear what an organization stands for:

The vision of an organization is the expectation of the owner of the organization and putting this vision into action is mission. Mission has a societal orientation and is a statement which reveals what an organization intends to do for a society

Business Definition
A business definition is the clear cut statement of the business or a set of businesses, the organization engages or wishes to pursue in the future. It also defines the scope of the organization. Business can be defined along three dimensions viz a viz product, customer and technology. The dimensions are defined in two features:

  • Focus
    • Differentiation

Objectives and Goals
Organizational objectives are the ends which the organization seeks to achieve by its existence and operation which the specific sphere of aims, activities and accomplishments. An organization can have objectives in terms of profitability and productivity.

Identification Of Strategic Alternatives
The strategic alternatives revolve around the point whether to continue or change the business. There are four grand strategic alternatives:
• Stability
• Expansion
• Retrenchment
• Combination
Stability: The company serves with same product, in same market and with the existing technology. This is possible when environment is relatively stable. Modernization, improved customer service and special facility may be adopted in stability.

Expansion: This is adopted when environment demands increase in pace of activity. Company broadens its customer groups, customer functions and the technology. These may be broadened either singly or jointly. This kind of a strategy has a substantial impact on internal functioning of the organization.

Retrenchment: strategy in which organization has to reduce its scope in terms of customer groups, customer functions or alternative technology.

Diversification: it is the change of business definition in terms of customer functions, customer groups or alternative technology. It is done to minimize risks by spreading overall business to capitalize organization strength and minimize weakness.

Choice of Strategic Management:

When the company is in more than one business, it can select more than one strategic alternative depending upon demand of the situation prevailing in the different portfolios. This analysis can be done by using any of the seven technologies given below:

  • Experience curve
  • PLC concept
  • BCG Matrix
  • GE nine cell Matrix
  • Space diagram
  • Hofer’s product market evaluation matrix
  • Directional policy matrix

A good strategy is one which helps in accomplishing the organizations goals. The strategic choice has to be implemented in a manner that the organizations culture and structure support the implementation.

Identification of Objectives of Project

All consumers can be classified into two types —personal and organizational. Whenever he buys goods and services for his own or for family use, he is a representative of a personal consumer. All individuals thus fall in the category of personal consumer. All business firms, and bodies, non-business organizations such as hospitals, trusts are organizational consumers of goods and services purchased for running the organization

Buyer versus User

Often the person who purchases the product is not the person who actually consumes or uses the product. A mother buys toys and clothes for consumption by her young children. The mother is the buyer but the actual consumers are the children. A car is purchased by the husband or the wife but is used by all the members of the family. Thus, in the family context, one may either have the situation where the buyer is distinct from the consumer or the buyer is only one of the many consumers.

However, a person involved in marketing, should have a very sharply defined focus for marketing strategy, especially promotional strategy. He must identify the best prospect for products—whether it is the buyer or the user. But even when the consumer is distinct from the buyer, the consumer’s likes and dislikes, taste, etc. – influence the buyer’s decision to purchase a specific product or brand. (A.M. Sharma, 1998)

Personal Factors

A consumer’s purchase decisions are also affected by his personal characteristics such as age, sex, stage in family life-cycle, education, occupation, income, life-style, his overall personality and overall self-concept. The need for different products and services changes with age. Babies and children have special needs for products such as milk powder, baby foods and toys. Young adults need clothes, recreational and educational facilities, transportation and a host of other age and fashion related consumption needs. There are certain physiological differences between men and women which result in their having different consumption needs. . Each gender thus has its own need for specific products and services.  (Yoder, Dale. 1999)


Life-styles are defined as patterns in which people live, as expressed by the manner in which they spend money and time on various activities and interests. Life-style is a function of our motivations, learning, attitudes, beliefs and opinion, social class, demographic factors, personality etc. The manner in which one blends thee different roles reflects one’s your life-style. (Cascio, W.F., 1992)

Life-style is measured by a technique known as psychographics. It involves measuring consumers’ responses to Activities, Interests and Opinions, along with collecting information on demographic factors. Different individual’s responses are collected and analyzed to find distinctive life-style groups. Based on the AJO technique, different life-styles have been identified and described. The different life-styles are then used for market segmentation, product positioning and for developing promotion campaigns, including new products.

Behavioral Theories

A consumer’s decision to purchase a particular product or service is the result of complex interplay of a number of variables. The starting point for the decision process is provided by the company’s marketing stimuli in the shape of product, promotion, price and distribution strategy. (Purecell J.,Boxall P., 2003)

The marketing stimuli are received by the potential consumer along with the other stimuli already existing in the environment. These stimuli may be social, economic, cultural, technological and political in nature. At the point of receiving the marketing stimuli, the consumer already has a certain mental, emotional and psychological frame of mind developed over the years by his cultural, religious, social, family and psychological background. However, most of these factors exert their influence at the sub-conscious level so that the consumer is not really aware of their existence or working.

When a stimulus is received, the consumer goes through an elaborate process of decision-making in terms of receiving, retaining, interpreting and evaluating the stimuli according to his own framework, Depending on the nature of product being purchased, this process may work at the sub-conscious level or it may be overt, the time taken to make the decision may vary from a few seconds to a few days or months. The buyer characteristics and buyer decision-making process in conjunction with marketing stimuli lead to a decision to either buy the product or not to buy. (Smith, B.D., 1996)


Consumer behavior is affected by a host of variables, ranging from personal motivations, needs, attitudes and values, personality characteristics, socio-economic and cultural background, age, sex, professional status to social influences of various kinds exerted by family, friends, colleagues and society as a whole. The combinations of these various factors produce a different impact on each one of us as manifested in our different behavior as consumers. One may think that the best way of utilizing annual saving is to have a holiday, but his wife thinks it is wisest to invest in a house, while his colleague considers buying shares as the best way of spending savings.

Thus it is observed that each person has his or her own standards of judgments and distinct behavior in every aspect of his role as a consumer. But at the same time, underlying the individual differences are similarities which help explain behavior of specific types or groups of people. It is these similarities which make it possible to classify and analyze the behavior of individual consumers. (Bean, R. 1999)

Psychological factors such as individual consumer needs and motivations, perceptions, attitudes, the learning process and personality characteristics are the similarities which operate across different types of people and influence their behavior. Amongst the social influences affecting behavior, it can classify the influences of family, friends, leaders and the social class to which the consumer belongs.

Approach—Creative input

All have needs and consume different goods and services with the expectation that they will help fulfill these needs. When a need is sufficiently pressing, it directs the person to seek its satisfaction- known as motive. All needs can be classified into two categories—primary and secondary. The secondary needs are our acquired needs which we have developed in response to the society and environment in which we live. The secondary needs are the result of the individuals’ psychological makeup and his relationship with other members of the society. The secondary needs may include the need for power, prestige, esteem, affection, learning, status etc.  (Kaplan, P.L., 1997)

All human needs can be classified into five hierarchical categories and this hierarchy is universally applicable All needs can be ranked in order of importance from the low biological needs to the higher level psychological needs. Each level of unfulfilled need motivates the individual’s behavior, and as each successive level of need is fulfilled people keep moving on to the next higher level of need.


Learning refers to the skill and knowledge gained from past experience which we apply to evaluate future decisions and situations. A marketer can build up demand for his brand by associating it with strong motives, using the appropriate stimuli and cues and providing positive reinforcement, thus making the consumer ‘learn’ that the brand is good and worth patronizing. (Aswathappa K., 1997)

Beliefs and Attitudes

The belief that the customer has about a brand is important because it determines his behavior towards buying and using it. The beliefs constitute the brand image, and if the customer has the wrong beliefs he is likely to generate a negative image about the brand. The marketer must ensure that consumers have all relevant and correct information about the brand to facilitate formation of a positive brand image. (Beach, D.S., 1996)

Attitude is a person’s enduring feeling, evaluation and tendency towards a particular idea or object. Starting from childhood, attitudes develop over the time with each fresh knowledge input, experience and influence. Attitudes get settled into specific patterns and are difficult to change. It is easier to market a product which fits in well with the existing patterns of attitude rather than change the attitudes to fit a new product concept. (Backman J., 2002)


The study of culture encompasses all aspects of a society such as its religion, knowledge, language, laws, customs, traditions, music, art, technology, work patterns, products, etc. All these factors make up the unique, distinctive personality’ of.each society. Culture can be defined as the sum total of learned beliefs, values and customs which serve to guide and direct the consumer behavior of all members of that society.  (Pareek, V., 2004)

 Culture is learned through the following three ways:

  1. a) Formal learning in which parents and elders teach children the proper way to behave; for instance a child may be taught that too many toffees and chocolates are bad for his teeth. This learning may influence his response, both as a child and adult, towards these products.
  2. b) Informal learning in which we learn by imitating the behavior of our parents, friends.
  3. c) Technical learning in which instructions are given about the specific method by which certain things have to be done such as painting, dancing, singing, etc.

Though a marketer can influence all the three types of learning through his. company’s advertising strategy, it is informal learning which is most amenable to such influences. Children learn much more about products and services through advertisements in mass media than they do either from their parents or teachers. Brand loyalties and images developed in the early formative years of childhood tend to be deep-rooted and affect the child’s consumer behavior even in later years of adulthood.  (Pfeffer., 1994)

The kinds of products and advertising appeals that can work effectively in a society depend largely on its cultural background. Products and services which fulfill these values are most successfully marketed. However, society is undergoing a cultural metamorphosis and one can discern some major cultural shifts which have far reaching consequences for the introduction of a vast variety of new products and services. The   society is undergoing a cultural metamorphosis and can discern major cultural shifts which have far reaching consequences for the introduction of a vast variety of new products and services. Some of these changes are as follows:

  1. i) Convenience: With more women joining the work-force there is an increasing demand for products that help lighten and relieve the daily household chores, and make life more convenient. .
  2. ii) Education: People today wish to acquire relevant education and skills that would help improve their career prospects. This is evident from the fact that so many professional, career-oriented educational centers are coming up and still they cannot seem to meet the demand.

iii) Physical Appearance: Physical fitness, good health, and smart appearance are on premium today. Slimming centers and beauty parlors are mushrooming in all major cities of the country. Cosmetics for both women and men are being sold in ever increasing numbers. Exclusive shops retailing designer clothes at fancy prices are doing brisk business.

  1. iv) Materialism: There is a definite shift in the people’s cultural value from spiritualism towards materialism. People are spending more money than ever before on acquiring products, etc. which add to both physical comfort as well as’ status.

Evaluation of Initiative and Recommendation

Knowledge of consumer behavior is helpful to the marketer in understanding the needs of his different consumer segments and developing appropriate marketing strategies for each. It is also useful for the marketer in developing an understanding of how consumers respond to the various marketing stimuli, which he provides in terms of the product, price, promotion and place. If the marketer can correctly identify those stimuli that evoke a positive response in the consumer he can very easily design effective marketing strategies using these stimuli.

The study of consumer behavior also provides an insight into how consumers arrive at the purchase decision and the variable which influences their decision. Once the influencing variables have been identified, the marketer can manipulate them so as to induce in his consumers a positive purchase decision. (Hamblin, 1993)

A consumer’s decision to purchase a product is influenced by a number of variables which can be classified into four categories, namely psychological, personal, social and cultural. For the marketer it is essential to associate his product with the motives and positive perceptions of his consumers. Also he must ensure that the product concept fits in with the consumer’s existing attitudes and beliefs.

Consumers differ from one another in terms of their sex, age, education, income, family life-cycle stage. To successfully market to consumers with differing personal characteristics, the marketer must accordingly modify his marketing strategies. (Galbraith J, 1978)

Social classes are group of people who have similar income, education, wealth, social status, value and beliefs. The marketer must understand that people with different cultural, sub-cultural and social class background have different product and brand preferences and need suitably modified products and marketing strategies.


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