Transcript Chapter 3 Effects of IT on Strategy and Competition

Part 1
STRATEGIC MARKETING
AND ITS ENVIRONMENT
Dr. Chen, Principle of Marketing
1: Customer-Driven Strategic
Marketing
2: Planning, Implementing, and
Evaluating Marketing
Strategies
3:The Marketing Environment,
Social Responsibility, and
Ethics
Dr. Chen, Principle of Marketing
Chapter 3
The Marketing Environment,
Social Responsibility, and
Ethics
Professor Jason C. H. Chen, Ph.D.
School of Business Administration
Gonzaga University
Spokane, WA 99258
[email protected]
Dr. Chen, Principle of Marketing
Marketing Applications
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 1. Assume you are opening one of the following retail
businesses. Identify publications at the library or online that
provide information about the environmental forces likely to
affect the business. Briefly summarize the information each
source provides.
 a. Convenience store
 b. Women’s clothing store
 c. Grocery store
 d. Fast-food restaurant
 e. Furniture store
 Student answers may be very general if they are unfamiliar with
specific sources at your school’s business library. This exercise
also is a great opportunity for your students to visit the business
library or for a member of the library staff to give a brief
presentation to your students. However, student responses will
fall into these general areas:
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 1. Answer:
a) Convenience store
 transportation studies (sociocultural and competitive
information)
b)
Women’s clothing store
 fashion magazines (sociocultural forces),
government economic data (economic forces including
disposable income)
c)
Grocery store
 government legislation (regulatory forces),
newspapers (sociocultural forces and food recalls),
census data (demographic information)
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 1. Answer (cont.):
d) Fast-food restaurant
 government legislation (regulatory forces),
 newspapers (sociocultural forces),
 census data (demographic information)
e) Furniture store
 government economic data (economic forces
including disposable income),
 home magazines (sociocultural trends)
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 4. Competitive forces are very important to companies, particularly
those that operate in many different countries. However, the
importance of each competitive force might vary depending upon
the industry. For instance, legal and regulatory forces limit many
of the activities of cigarette firms. While rising prices might impact
the purchase of luxury goods, necessities such as diapers and
antibiotics will not experience as much of an impact, because
people require them whether the prices are high or not.
 With this in mind, examine the impact that economic forces,
political forces, legal and regulatory forces, technological forces,
and sociocultural forces have upon Exxon Mobil, General Motors,
and Procter & Gamble. Rate each of these factors on a scale of 1-5,
with 5 being most important and 1 as least important. Based on
these three companies, which environmental variable do you think
would be the highest priority for each company and why? And
which environmental variable do you feel would be most important
for marketers?
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Figure 1.1 - Components of
Strategic Marketing
#2
#1
#3
(place+time)
#6
#4
#5
Dr. Chen, Principle of Marketing
4. Answer:
Student answers will vary due to the subjective nature of this
question. You may suggest that students answer the question in
a table like the one below in order to encourage comparison
between companies and industries. You may also ask that
students provide reasons or examples to support their ratings.
Economic Political
Legal and Technological Sociocultural
Regulatory
Exxon
Mobile
General
Motors
Procter &
Gamble
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Internet Exercise
 Business for Social Responsibility (BSR)
 Summary:
 Business for Social Responsibility (BSR) is a nonprofit
organization for companies who want to operate
responsibly and demonstrate respect for ethical values,
people, communities, and the natural environment.
Founded in 1992, BSR offers members practical
information, research, educational programs, and
technical assistance, as well as the opportunity to
network with peers on current social responsibility
issues. To learn more about this organization and access
its many resources, visit www.bsr.org.
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 1. What types of businesses join BSR, and why?

 BSR membership is open to all companies, regardless
of size, sector, location, level of CSR experience,
corporate reputation, or other factors. BSR prefers to
work with companies who have an interest and
commitment to improving their overall performance in
key CSR areas.
 Companies join to gain access to a powerful network of
member companies, and thought leaders, peers, and
stakeholders focused on creating viable sustainability
solutions.
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 2. Describe the services available to member
companies. How can these services help
companies improve their performances?

 Member companies get access to networks,
newsletters, information, discounts on consulting
and workshops, invitations to events, and job
postings on the site.
 This helps companies to exchange ideas, find
qualified people, and fine-tune their activities to
improve their social responsibility and business
performance.
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 3. Peruse the “BSR Conference - Overview” link, located at
the top of the home page. What are some advantages to
attending the BSR conference and listening to industry leaders
and experts in corporate social responsibility?

 According to the website, “The BSR Conference 2013 will
celebrate and explore the power of networks, bringing together
more than 1,000 leaders from business and sustainability from
around the world to share their expertise and knowledge.
 For more than 20 years, the BSR Conference has provided the
preeminent global platform for sharing best practices,
collaborative approaches, and opportunities to advance
sustainable business. Joining the Conference will help
experience the power of networks firsthand and to accelerate
progress as BSR works to create a just and sustainable world.”
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Video Case 3.1
 VIDEO CASE 3.1 : TOMS SHOES
EXPANDS ONE-TO-ONE MODEL TO
EYEWEAR
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 Summary

 TOMS is known for their for-profit philanthropic business
model, which allows the company to donate one pair of shoes
to a child for every pair of shoes purchased. TOMS is now
applying that model to eyewear. For every pair of sunglasses
TOMS sells, a person with vision problems in a developing
nation receives surgery, prescription glasses, or medical
treatment to help restore his or her sight.
 TOMS takes its obligations for social responsibility seriously
by working closely with local humanitarian organizations and
striving for a responsible supply chain. Even though they pay
higher prices, TOMS’ customers feel committed to the
company because they know that their purchases are going
toward a good cause.
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 1. Do you think TOMS is successful because of its
unique products, or is it the firm’s approach to social
responsibility?

 Some people really like TOMS for its products,
regardless of the company’s activities. Some of TOMS’
products are stylish and have not been replicated at
lower prices, so students may argue that the shoes and
eyewear are important.
 However, students will most likely answer that the one
to one model is a large contributor to TOMS’ success.
Students may believe that they receive extra benefits
when they know they are helping someone in need with
their purchase.
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 2. How does TOMS manage its supply chain in order to
ensure ethical and socially responsible conduct?

 TOMS uses factories in China, Argentina, and Ethiopia for
manufacturing, which creates complex supply chain
relationships that must be carefully managed. TOMS created a
set of manufacturing standards based on International Labor
Organization compliance standards for its manufacturers.
 The company regularly performs audits to check that the
factories are complying with company standards. TOMS also
seeks to create strong organizational relationship with its
employees and volunteers. The company often allows
employees to participate in Shoe Drops (distributing the shoes
to children) so they can see firsthand how their efforts are
helping others.
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 3. How does TOMS’ business model relate to the
understanding of stakeholders and strategic
philanthropy?

 Strategic philanthropy is the synergistic use of
organizational core competencies and resources to
address key stakeholders’ interests and achieve
both organizational and social benefits. TOMS
address the needs of a wide variety of stakeholders,
including their customers, employees, and society,
which helps the company to accomplish both their
financial and philanthropic goals.
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