ESLSCA 34C, 3rd Semester, Strategic Management| By: Ahmed M. Adel|
Q1. Analyze the differences between a marketing orientation and a sales orientation and identify the effects of not considering both in developing a business strategy. What are the differences between sales orientation and marketing orientation:
Sales Orientation| Marketing Orientation|
* A business approach or philosophy that focuses on identifying and meeting the stated or hidden needs or wants of customers. See also product orientation and sales orientation.| * A business approach or philosophy that focuses on promoting sales of whatever a company makes or supplies, through marketing and sales calls. See also market orientation and product orientation.| * The firm focuses on the skills of selling rather than on the needs of the buyer.| * The firm tries to get the company to produce what the customer wants. | * Is an emphasis on "moving" your product via advertising and/or salesforce. The product and production capacity preceded the consumer. There is a lot of emphasis on image. It worked for many years (and still works), but in more competitive environments started to fail.| * The company tries to satisfy a consumer need (a felt deprivation). The product and production activity follows consumer research. A segment of the market is chosen. The system is molded to fit the consumer. There is an emphasis in "positioning" (Image + high Ranking as a solution).| 1. a. Corporate Strategy
Before analyzing Wal-Mart’s corporate strategy, it is important to decide what business it is in. For example, if Wal-Mart is in the business of selling consumer goods such as TV’s, sheets, clothes, etc then it is pursuing a concentric strategy by entering the food business. However, this changes depending on how you analyze what business Wal-Mart is in. Wal-Mart is in the business of selling everything customers need in their everyday lives. This includes the consumer goods listed above as well as food-service items. Even still, Wal-Mart pursues multiple strategies. Concerning concentration, Wal-Mart continually finds more consumer goods to sell at its stores which can take money from competitors. Additionally, when Wal-Mart entered into the food market, it quickly consolidated and held to good, saleable products. Wal-Mart never forays too far into a market and only sells what will make it a profit. Recently, Wal-Mart has pursued a conglomerate strategy by starting to sell used cars at some of its stores in Buffalo, New York. Selling cars is an entirely different industry than selling consumer goods. Additionally, it requires a whole new set of expertise that does not come easily. As far as future plans are concerned, Wal-Mart should abandon this strategy and stick to what they do best. Lastly, an argument can be made that Wal-Mart is also pursuing a vertical integration strategy. Wal-Mart has developed its own name brand to sell products called Sam’s Choice. This puts Wal-Mart into the business of making things like soda, cereal, and dog food. While they still don’t grow their own crops or raise their own livestock, it is still a form of vertical integration. Also, Wal-Mart works heavily with its suppliers. This symbiotic relationship can be see as vertical integration due to the level at which Wal-Mart analyzes its suppliers and improves their manufacturing processes, etc. b. Business Strategy
Wal-Mart definitely has the business strategy of Low Cost Leadership. They do nothing to really differentiate themselves from competitors and provide no-frills self-service stores that always provide the lowest prices. Wal-Mart has built enough clout with suppliers that they can dictate the prices and go in and change suppliers manufacturing processes in order to wring out more and more savings for the consumer. Everything that Wal-Mart does from calling suppliers collect to...