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Harvard Business School

The learning’s from the article “Marketing Myopia” written by Theodore Levitt a lecturer in Harvard Business School in the 1960s is very much relevant even in today’s hyper competitive global business environment. The author has discussed the short sightedness of the marketing practitioners and has made a number of very valid points regarding good marketing practices for sustained competitive advantage, a few of which are discussed in this paper.

The top management of any organization is responsible for its mission, the long term strategies and policies and the broad framework that guides their implementation. The success or failure of any organization is not so much a result of the problems faced by the industry in which it operates but mainly because of the short comings of its top management. Companies witnessed decline in growth mainly because their top management were unable to define their business/industry correctly or sometimes they defined it very narrowly.

This can be the case even today for example; many of the leaders of the Information Technology companies have narrowly defined their business as the developers of software products rather than broadly defining their business as one of providing solution for information needs of the customers. Many of such

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companies are facing declining growth rates not because of lack of opportunities for growth but mainly because of the inability of the top management to think innovatively and take risks.

Leaders of companies fail to define their industry correctly because they are predominantly product oriented rather than customer oriented. Companies like General Electric that have had a customer orientation have been successful and grown consistently over a long period of time as compared to their competitors. GE is a very technically sound company but it has always identified and responded to the changing customer needs consistently throughout its existence.

It has effectively leveraged competencies to develop and provide products and services to satisfy the changing needs of its customers. This has resulted in more growth opportunities for GE as compared to its competitors. If a company relies heavily on its core product and fails to identify possible substitutes to its products that may challenge its sales, it will loose business to competition. It is more advisable for companies to keep developing substitutes and plan the obsolescence of their core products to ensure consistent growth.

The author is of the firm opinion that any industry does not grow, but it is the more efficient and effective companies that create and capitalize on growth opportunities. Companies fail to harness such growth opportunities because of a number of reasons. The foremost amongst them is the belief that their growth and profits are ensured by the growth and affluence of the population especially in the developing world. Many consumer durable giants had a bitter experience when they assumed an easy market from the growing middle class affluence in India.

They failed to think innovatively to cater successfully to the different consumer needs in India as they had assumed it to be an automatic market waiting for their expansion plans. The evolution of mass production has also resulted in over emphasis on selling rather than marketing resulting in disaster for many companies. In selling the concentration is more on the manufacturer to effectively manufacture and sell what he feels is needed by the customer.

In marketing the concentration is more an understanding the needs of the customer and manufacturing and offering a product or service that effectively satisfied such needs. All the activities and processes of the company are customer centric and get evolved with the changing needs of the customers over a period of time. This will ultimately ensure consistent growth for the company. Extensive reliance on the belief that continuous reduction in unit costs will boost consumption and profitability infinitely for a given product will also lead to marketing myopia.

This is because the belief of an assured demand for the product will prevent the companies from making a serious effort in understanding and satisfying the ever changing needs of the customers. However the most significant point made by the author that inhibits or affects the growth of a company is the strong belief of the top management that profitability is ensured by excessive research and development efforts. The assumption behind such a belief is that a superior product will automatically sell itself. Most companies in the high technology semi conductor industry were growing comfortably in this illusion till recently.

Intel corporation the most successful company in this industry thrived by continuously developing superior quality microprocessors. Increasing competition has broken this illusion and Intel has maintained its leadership consistently because it has successfully evolved from a technology oriented company to a marketing oriented company. This is the most crucial requirement for consistent growth because earlier the company had a very narrow focus as it manufactured and marketed very powerful microprocessors for the personal computers.

The company established hyper productive plants that could manufacture very large quantities of microprocessors of very high quality in a very short period providing for very high economies of scale. Intel needed to change with the changing times. It has now moved away from the narrow focus on personal computers because of the drop in the growth rate of PC sales and is now playing a key technological role in half-dozen fields including consumer electronics, wireless communications, health care, media & entertainment, cell phones, servers etc.

Intel is not just manufacturing microprocessors as before but is also manufacturing all kinds of chips and software that are meld together into platforms that lead to new devices and technologies for specific and emerging applications to provide more value and ease of use to the potential customers using such applications. This move from technology orientation to marketing orientation has successfully helped the company to leverage its core strengths of technological capabilities and innovation to take advantage of the opportunities that have been provided by the customers in this rapidly growing sector.

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