A company exists thanks to the relationship it establishes with its public: consumers who pay for goods and services; companies that are provided through other companies; citizens who cast their vote in favor of a political party or candidate; believers who profess their faith, etc.
In all cases, the relationship between the two is established in terms of an exchange through which the public (client) is willing to give some of their money, effort, attention or time to receive a benefit, satisfaction or solution from the company.
Market orientation is about facilitating these exchanges through understanding purchasing behavior and serving customers profitably and better than competitors.
This way of thinking suggests that in the long term, those companies that base their performance with an outside-in perspective will be more successful; that is to say, that starting from understanding the clients, they define the necessary processes to serve them.
The Strategic Market Planning process begins with the setting of objectives and the design of strategies in light of an internal diagnosis of the company's circumstances (strengths, weaknesses) and an external diagnosis of the market circumstances (opportunities, threats).
With a market perspective, these objectives and strategies will focus on Market Segmentation, Product Differentiation and Brand Positioning decisions.
The strategy will be successful, that is, it will translate into successful performance indicators if and only if the company consistently establishes the structure and processes necessary for market orientation to occur.
A company of any size, even large and with a global presence, can be sensitive to the market it serves thanks to the use of information through an appropriate technological platform.
Collaboration between employees, suppliers, distributors and customers themselves allows you to be flexible to serve that market in such a way as to improve performance indicators such as customer satisfaction and share value.
The organizational design must then respond to the characteristics of the market environment in which the company competes. Mainly to its diversity, which translates into a complexity to attend to it, but also to the rapidity of the change in competition factors, the intensity with which it occurs and the interdependence between business units.
The process of adapting the company's skills to the market requires it to modify its organizational structure, the activities carried out within it and the role played by each of its members, in such a way that it manages to improve its efficiency and effectiveness. through:
- Establish close contact with customers Improve the service offered to them Eliminate unnecessary levels of command Streamline decision-making processes
The design dimensions to be considered have to do with the structure of the company:
- The form that the organization must take to accommodate the members and the functions they must perform. The distribution of activities within the structure, expressed as departments or work areas.
And they have to do with the process necessary for the structure to come to life and function:
- The degree of specialization required by the members that compose it. The distribution of decision-making power within the structure, reconciling the problem of vertical leadership with horizontal leadership.
Ultimately, it is about reconciling two aspects that are essentially contradictory, but necessary and that must coexist, control and creativity. In other words, the organizational design must allow an adequate balance of the formality necessary to maintain good control of performance and the informality necessary for change and innovation that prevent it from becoming obsolete.
Some examples of the conflicts that result when creativity and control coexist are those that arise from:
- The degree of centralization or decentralization that you want to have The relationships between the functional areas, mainly between marketing and sales The development of new products and services.
This last task is very delicate because it has a business nature that requires a lot of creativity, but it must happen in an orderly manner. A solution is the matrix arrangement of work teams under a scheme of 'coordination through lateral processes' through the organization whose form is given by functions, markets or products.
Other more recent examples, some of them extremely critical, are given by companies that undertake a CRM initiative, adding to their structure an appendix in charge of developing and maintaining relationships with customers. Some appendices are as small as a minimal customer service department; others as large as several million dollars worth of hardware and software.
If you do not change the culture of the organization, the structure under which it is organized and its work processes, it is impossible for the CRM initiative to work. It is necessary to guide processes that go from the development of relationships with customers to the generation of performance indicators that show the efficiency and effectiveness with which these relationships exist.
It is not a question of saying that the company is oriented, or will be oriented, towards the market. Its structure and processes must be prepared so that production, service provision, distribution, logistics and delivery, financial management and human resource management support this orientation.
In summary, the new competition rules require companies:
- Organized for change, not for stability Organized through collaborative networks, not rigid hierarchy Based on the interdependence of its partners, not self-sufficiency Built on technological advantages, not on the traditional cement building and bricks.
They must have the right mindset and culture of change, use information technology in innovative ways, have very progressive human resource policies, and place an almost fanatical emphasis on their customers.
