SMART goals
Business managers would want to stabilize and expand their businesses by determining the objectives, missions, and visions of the business. To be successful in the achievement of business goals, SMART goals are used. SMART goals help the business managers to do successful things. The effectiveness of SMART goals can be looked at by looking at each word element (Emmett 2008, p.2). To discuss the SMART goal I will talk of Pepsi which is a drink producing company.
S means that a goal should be specific. Every business goal should be clear and simple to understand. It should be defined and broken into smaller distinctive steps that describe what needs to be done. For example, Pepsi would target to produce one million bottles of energy drink by the end of the year. The goal is specific because it talks about one million bottle production within one year. Clarity on a target is effective to the goal achievement since it makes the company focus on the major things (Tyson& Schell 2008, p.283).
M means that the goals should be measurable. Each goal set should have certain criteria to track the goal progress. Using quantities to measure the progress is effective because it motivates the goal’s accomplishment and encourages improvements. For example, if by the 9th month Pepsi produces 70% of the targeted quantity and does not expect any internal or external problem that will hinder production for the remaining period, then Pepsi is progressing well(Tyson& Schell 2008, p.283).
A stands for attainable. For a goal to be effective, it should be within the company’s control. The company should have the abilities, skills, spirit, and funds to achieve its goals. For Pepsi to achieve the set production target, it should be able to have control over the raw materials, manpower, and other resources important for production. It is also important for Pepsi to have corrective measures for any problem that will arise during the one year production period. It will be an ineffective goal if Pepsi targets1 a million productions and it has never produced the same capacity for five years. Maybe Pepsi lacks enough funds to upgrade its production system (Tyson& Schell 2008, p.284).
R means that the goals should be realistic. A set goal should reflect the willingness and love of the managers to work towards goal success. A positive belief or attitude towards the goals brings its achievement however complicated the plan should be. For Pepsi to hit the target, the staff should know how their influence affects the goal. Lack of staff control and positive attitude will create less motivation therefore the targeted production will be hard to achieve.
T means that the goal should have a time frame. The business should set a defined period for which to accomplish the goals. Time frame creates urgency and prevents one from postponing the goal. Pepsi must produce 1 million bottles within one year and to achieve the goal, the company will put all measures that will increase production, for instance using machines in production. Lack of time-consciousness will lead to target failure.
Strategic management tools
SWOT analysis is used by business managers for strategic management. SWOT creates a stable business operation by showing the strengths, weaknesses, opportunities, and threats of a business (Fine 2009, p.409). J. Boag & Son Company is produces bottled water in Western Australia but now the company has a dream of launching a new product which is premium beer in the same region. The company’s strength is that it is prominent in the region because of its finest water and hop resources. J. Boag & Son Company should use its strength to acquire a great market share of the beer. To be specific on the goal, the company should target a 40% acquisition of the Western Australian market by the end of the first year and 60% by the end of the second year.
The company should research to determine the size of the market, the total sales of the rival companies, and the likes of the customers. The study will enable the company to strategize the goal and put the necessary tools that will help to achieve and measure the target progress. For instance, if the customer prefers different quantity packaging like 300ml, 500ml, and 1litre bottle packaging, then the company should provide that and see if by the year-end 40% of the market share will be acquired. J. Boag & Son Company can achieve the goal of acquiring a 40% market share because it will be easier to convince the consumers of the finest beer product since it has the finest water. Also it is easier for J. Boag & Son Company to launch the premium beer as compared to other new companies in the region since it has already set foot in that market with the water product and has that market experience. It is relevant for J. Boag & Son Company to launch the premium beer since it will help in the expansion of the company earnings since the goal is realistic to them. The goal has a time frame of one year for the first goal accomplishment (Fine 2009, p.411).
Although J. Boag & Son Company is a prominent company, it has a weakness since its premium beer has not been recognized by many customers because of little product differentiation. Consumers may not be able to give a difference between the premium beer and other rival companies’ beer because of maybe similarities in packaging, quality, taste, and price. Since J. Boag & Son Company is new in the beer market, it should use all possible ways that will create a market share. To achieve this, the company should for example produce different taste brands at different prices. To be specific company should put fruit flavors to the beer like the strawberry flavor, vanilla, and apple. The company may decide to sell strawberry flavor beer cheaper than the apple and vanilla beer. Taste varieties will give consumers a choice on the flavors (Keller 2003, p.36).
The company should track the progress of the product differentiation by finding out if the consumer’s purchase is based on the choice of brand flavor. The measure of the quantity sold for each brand flavor is important because the company will produce the preferred brand thereby obtaining a larger share of the market. The goal of producing different taste varieties is attainable by the J. Boag & Son Company because the company has the financial resources and attitude to achieve the target. Since the company has once succeeded in acquiring the water market by providing the finest quality, then it is motivated to create more sales by providing different beer varieties. To fight the weakness quickly, the company should set a specific time for producing the three beer brands. Since the time frame for the 40% market share acquisition is one year, the company should have produced the three brands by the fifth month. The earlier the product differentiation, the better is for the company to try other ways that will distinguish its premium beer from other rivals’ beer (Keller 2003, p.37).
Swan larger is a rival to the J. Boag & Son Company and is posing a threat. Swan being an established beer company in Western Australia, has superior access to the market since it is selling a local brand. It will be easier for swan larger to convince the consumers to buy its product because the consumers will be promoting the local industry. On the other side J. Boag & Son Company will be facing stiff competition even if the company has an established market for water products. To survive the competition, J. Boag & Son Company needs to focus on the way to convince the customers to buy its beer brand. The best way to win the customers is to sell the premium beer below the larger beer price. It is not possible to set the price at a certain point, therefore the J. Boag & Son Company should study its operation to know how much to sell the beer. To be profitable, the company should set a price that breaks evens. The company should target to reduce its operational cost by 20% by the second month of production. To be more specific, human capital should be replaced with machines that have less operational cost. The company should lay off workers whose work can be done by the machines. To know if the machines are effective in the cost of production, the company should compare the operational cost before the introduction of the machine and now.
The idea of reducing operational cost is achievable by J. Boag & Son Company since the company has the resources to buy new machinery. The company is also able to produce beer at a cheaper price because being water producing company it has enough water which is the major raw material for beer production. The raw material advantage helps the company to produce beer at a cheaper price than swan larger. It is relevant for the company to reduce its operational cost because it will have more profits to expand the company more (Pahl & Richter 2009, p. 5)
Marketing management
Marketing managers need to plan and make decisions that are necessary for the success of the marketing process. Marketing goals help the business to create marketing channels that are important for the product market. A marketing manager should set a marketing goal and ensure its success. Although it is easier to set marketing goals and implement them, it is another thing to see its achievement since the goal’s success can be hindered by certain obstacles. To achieve the set goals, a marketing manager should have control of both formal and informal situations (Irwin& Haley 2009, p.67).
Formal controls include the business operations, strategies, and processes formulated by the business to aid in the achievement of the marketing goals. The marketing manager should control inputs by ensuring that proper tools and necessary resources are put in place for the success of marketing goals. Workers’ recruitment and training should be done professionally. The business should also have enough funds that will promote effective competition and the development of new markets (Anthony & Bedford 1984, p.22). Formal controls are activities put up by the business at the time of implementing the goal. The activities affect the behavior of the employees which later affects the way they commit themselves to the success of the business objectives. The marketing manager should ensure that employees are evaluated and compensated by the marketing plan, for instance, the effort of the workers should be used to reward them (Ferrell & Hartline 2008, p. 333).
Output control means that the marketing manager creates some measures that he/she will use to compare with the results. A marketing audit is important for knowing if the set objective has been achieved. For instance, to control sales the marketing manager should assess the sales plan for the business by using documents such as sales analysis to determine if the sales target has been achieved (Ferrell & Hartline 2008, p. 333).
Informal controls are employee-based strategies that influence the behaviors of the workers either as an individual or as in a group. A marketing manager should be keen on individual objectives, behaviors, and expectations. Firstly, to achieve employee self-control, the marketing manager should make workers feel satisfied with the job. This is by rewarding them in the right way. The more satisfied are the workers, the stronger is their contribution to the goal achievement (Madura 2006, p.306). Social control involves monitoring of group standards, norms, and social ethics. Social interaction among the workers determines their behavior much. The peer pressure built by the social group can make the employees conform to the expected way. A marketing manager should give freedom to the employees to create social groups as long as the groups create positive pressure on the workers. The business culture includes the behaviors and social operations of the entire business. Marketing managers need to control the culture of the entire firm by ensuring that all the workers follow the same business values and beliefs. Cultural control is very effective and efficient for the marketing goal implementation although it is hard to master it in the organization (Ferrell & Hartline 2008, p. 334)
Marketing plan
During the execution of the marketing goals, some problems may occur that will hinder the achievement of the goals. Problems may occur if the goal was unrealistic if the implementation process was mismanaged or not appropriate for the goal or maybe there were internal or external environmental changes. In case of any problem, the marketing manager will be able to detect it by always tracking the implementation process. Since the goal should be measurable, it will be easier to evaluate the quantity of success achieved at any stage. If the progress is not satisfying as by the plan, then something is wrong. Therefore, the marketing manager should determine the source of the problem and put some corrective tools or measures control the situation (Aaker & Mills 2005, p.90)
Firm incompetence is caused by the inability of the business to control the internal operational process. For example, the business may not be able to recruit and properly train the workers therefore workers don’t have the motivation to work. The problem may also occur because of a lack of managers’ commitment to the marketing strategy success, poor employee reward, and lack of internal communication. The marketing plan defines the business objective and outlines the way the strategies will be implemented. Therefore, the marketing plan shows any process diversion caused by any firm incompetence. If the managers keep on monitoring the implementation process by comparing the actual results with the market plan, then it will be easier to detect problems at an early stage. The market plan is only important if it helps the businesses to control any situation and track the implementation process (Ghuman 2010, P.36).
The external environment is forces, conditions, and events that affect the business operation. The external environment can be micro or macro-environment. Microenvironment has a direct effect on the operations of the business. The microenvironment variables are business suppliers, competitors, and consumers. The macro-environment on the other hand is said to be the entire environment that is remote to the business. The business is not able to control the macro environment as compared to the microenvironment. A macro environment involves the economic booms and recessions, social environment that deals with the work culture and labor mobility, political environment that shows the effect of the political instability and the government laws to the business and finally the technical environment that determines the types and quality of commodities produced by firms (Kotler 2003, p. 21). Marketing plans will be important for the business because it will assist the marketing manager to visualize and foresee any external variable that will affect the goal implementation. The business will be able to put some tools that will minimize the effect of the external environment on the marketing goal achievement.
List of References
Aaker, D.A and Mills, M.K 2005, Strategic market management, Singapore: Pacific Rim.
Anthony, R.N and Bedford, N. M 1984, Management control systems, USA: R.D Irwin publishers.
Emmett, J 2008, Be Your Own Sailing Coach: 20 Goals for Racing Success, England: John Wiley and Sons publishers.
Ferrell, O. C and Hartline, M. D 2008, Marketing strategy, Australia: Cengage Learning Publishers.
Fine, L. G 2009, The SWOT analysis: Using your strength to overcome weaknesses, using opportunities to overcome threats, USA: Create Space Publisher.
Ghuman, K 2010, Management: Concepts, Practice & Cases, New Delhi: Tata McGraw-Hill Education.
Irwin, S.C and Haley, T.H 2009, Marketing Planning and Strategy (8th Edition), Australia: Cengage Learning.
Keller, K.L 2003, Strategic brand management: Building, measuring, and managing brand equity, Upper Saddle River: Prentice Hall.
Kotler, P 2003, Marketing management, Upper Saddle River: Prentice Hall.
Madura, J 2006, Introduction to business, Canada: Cengage Learning.
Pahl, N and Richter, A 2009, SWOT Analysis – Idea, Methodology and A Practical Approach, Germany: GRIN Verlag.
Tyson, E and Schell, J 2008, Small Business for Dummies, Canada: Wiley publishers.