WEEK 8

Customer vs Company Strategy

In some cases, the customer determines the marketing strategy of the company and the company’s approach in the market. As we know from Drucker, companies should put a lot of emphasis on the customer. The customer’s market tendencies, needs, and wants all factor into how the company approaches its marketing strategy. However I feel that the company must manage to see how customers are reacting while at the same time being innovative in their own unique marketing approach. In the end, I feel like a company must find a balance. As I previously mentioned, a good example of a company that used its own marketing approach has been Apple’s Ipad. The company used its own internal instincts of creating the tablet market even though customers did not indicate a need for them.

A good personal example of a company that used the customers input to create a product is Big Y’s “Big Y 2 Go”. The company saw what customers wanted and developed a product that fulfilled that market need. Big Y 2 Go is a way for customers to make purchases online, have Big Y employees do the shopping, and ultimately pick up your groceries at the door. The product is meant to target customers who do not have time to shop and focuses on those who want shopping done quickly. In the creation of this product, Big Y realized that customers value time. Big Y successfully tapped into these new customers as there was a need for such a product. Similarly, Stop and Shop has a similar service targeting the same consumer who values time. In comparing the two examples discussed, Apple acted almost purely internally when creating the Apple Ipad. Big Y on the other hand, saw how the customer market was acting and reacting to that market through their Big Y 2 Go service.

Drucker's Historical Data and 5 Certanities

Drucker believed that historical data should not be used to predict the future when performing a strategic analysis of a company. Although historical data should not be a key point in forming strategic decisions of a company, I feel that this data can help to confirm past decisions while providing additional assurance to new ones. Being in the accounting industry, I feel that I constantly work on historical data. Financial statements which we complete for companies in some cases are not finalized until several months past the company’s year-end. Ultimately, when this data is complete, members of the board use it as a way to see how the company is doing. I have seen that mainly in the not for profit world, organizations rely on this historical data as a way to envision where the company is headed. When the organization is low in terms of resources, any data, even old data can be used as a way to form a strategic analysis.

 Looking at Drucker’s 5 economic certainties, I feel that they still hold a lot of truth in today’s world. The collapsing birth-rate in the developing world is a key factor that affects global business. I would add however the fact that third world countries are expected to have huge booms in population which will likely change the balance. What is currently certain is that business and people are becoming much closer because of technology. The fact that there are major shifts in population growth is another change to Drucker's 5 economic certainties.

Pharmasim World - Metrics

In examining what metrics should be used in Pharmasim, cummulative net income would be a good judgment of overall company success. Although sales dollars and unit sales would also be good in analyzing company success, these can be skewed for several reasons. For example, a company may have very high sales due to very low price which is near cost, therefore their sales will be very high. However when looking at their bottom line, the company may be operating at a net loss due to a low gross profit margin. Likewise high sales may be achived due to vey high advertising and promtions. These expenses would not be picked up in the manufactuer sales or unit sales calculation. However when looking at the bottom line of net income, the expenses will be shown and the “inflated” sales will be shown net of the related expenses. Cummulative net income captures both sales and expenses are are equally important when evaluting a company’s overall health.