Executive Summary
This study gives an analysis of Nielsen Company with respect to problems the company faces in the market. The study begins by presenting a brief overview of the company. The review has indicated that the company has been in the market over a long period, an aspect that has significantly helped it in creating competitive advantage.
The study then gives a clear statement of the problem; which is unhealthy competition, which has negatively affected Nielsen in its effort to maximize its profits. Unhealthy competition has also led to a devastating fall in prices. This has led to the need for evaluation of the existing literature and then the possible solutions for this problem. Finally, several recommendations have been proposed.
Company background: Overview
Nielsen Company is one of the most successful companies in the world. Having been established in 1923 by Arthur Nielsen, currently, the organization has extended its operations across the world. Nielsen was one of the founders of the modern marketing research industry. In addition, Nielson played a very significant role in marketing research, through making several innovations in most of the consumer-focused marketing media research.
Nielsen is also responsible for creation of unique methods of measurements that provided clients with potent and objective information about the impacts of marketing and sales programs on respective returns and profits (Nielson Par 3). Nielson spent time in clarification of the concept of market share and its importance in determining corporate performance.
In current business world, the market is characterized by a very high level of competition among the competitors. This is more so for the global market where consumers are interconnected with increased access to volumes of digital information. Nielson Company employs a complicated system of data collection methodologies and measurements in an attempt to utilize new and traditional data information into consumer intelligence.
Through its services, the company has helped various organizations in management of their individual brands, launching and facilitating the growth of new products in the market, as well as optimizing on the necessary media mix. Consequently, the company has helped numerous companies around the world in developing a meaningful customer relationship globally.
Nielsen opened its first international office in the United Kingdom in 1939, shortly after the beginning World War II. Later, the company continued with expansion of its services to other areas in the world. For instance, it extended its operations to Australia, Japan, and Western Europe.
In these stages of early development, the company used the merging system in order to adopt fast in its new market. For instance, the company increased its presence in Asia Pacific by achieving control over the Survey Research Group. The company also acquired AMER World Research Group in the Middle East and Africa in late 1990s, which led to expansion of the company in these regions. In the year 2001, Nielson made a great achievement when it became a part of VNU.
Nielson offers high quality market information gathered from various places from a wide range of places collected in the most efficient way. It also offers advanced management tools, as well as sophisticated analytical systems. In addition, the company provides respective feasible methodologies in effort to help their clients in identification of the best paths of growth. The company is also committed in providing the best services in a professional way to its clients in an effort to maximize their satisfaction by helping them meet their goals.
In many cases, Nielson Company works closely with its clients in measuring their market performance in order to be able to take appropriate steps. The company also helps organizations in analyzing their market dynamics. This is another important service that Nielsen Company offers to its clients, which is of great significance as it helps an organization in making critical decisions. Another service offered by the company is diagnosing and solving marketing and sales problems.
This service has attracted a significant number of the clients as each company attempts to maximize its sales. Finally, the company helps their clients in capturing new opportunities, which is the main factor that determines the company’s success. In this case, the company plays a pivotal role to many organizations in helping them to determine right set of information.
Nielson Company has been leading in measurement and information in the market research for many years. This information has been of great importance to many organizations in their attempt to understand their clients. The company has given innovation the first stance in its operations.
This has significantly helped the organizations in maintaining pace with the emerging market trends. After having been in the market for many years, the company has managed to come up with necessary information in identifying of what consumers watch and buy by developing clear insights on consumer behaviour. These top qualities have significantly contributed to the reputation of the organization all over the world.
Problem Statement
In the modern business world, the market has become highly competitive. This has been characterized by increased rate of entrance of new players in the market with an almost constant level of customers. The market has also become sophisticated with the globalization process.
In order to survive in such a business world, every company needs to employ necessary measures in order to retain its comparative advantage. This is one of the major problems facing Nielsen Company in its efforts to maximize its profits. The company is engaged in market operations that are characterized by a very high level of competition. This unhealthy competition has led to price wars, which have negatively affected the company’s performance.
It has led to a substantial reduction in the level of the company’s returns. For instance, profits have fallen to almost unsustainable levels as a result of competition among the rival companies. Each company tries to under price its competitors in order to win customers, and in the process, the prices fall far below the desired levels.
Given these market conditions, the major challenge is winning and retaining customers into an organization. This becomes very critical. This is one of the major problems facing the Nielson Company. Despite its good performance over the past, the company has been faced by numerous problems, threatening the overall performance of the organization in both the short and the long run.
Literature Review
Through the process of globalization, the contemporary market has become very sophisticated. The market has been characterized by a high level of competition, which has negatively affected the organizations involved. The main impact of this competition to these organizations is price wars. In this study, price war is seen as the market situation where the main competitors target at reducing their competitors’ market shares by progressively reducing their prices.
According to Bungert, price wars should be terminated before reaching devastating levels (2). This is because persistence of such a situation will lead to a complete fall of some of these. This can be achieved through liaisons between the competitors.
However, this becomes too complicated especially when there are many players in the market. Another challenge is that many companies will be reluctant to give their information about their strategies. This implies that in analyzing such a problem, information on such kind of data will only be estimated. Therefore, finding the solution to these problems will be complicated.
Over the past, Nielsen has encountered intense competition in its market network, a situation that has threatened its performance in the market. For instance, intense competition has frequently led to prolonged pricing wars between the company and other market research rivals like Information Resources, Inc. (IRI) (Nielson Par 5). A good example is the supermarket scanner information sector, which had a significant negative impact on Nielsen Company in 1990s. This affected the company’s performance in both the short run and long run.
As already noted, one of the main problem of unhealthy competition is the pricing wars. When many players enters into the market while the number of consumers remains constant, this leads to a high level of competition as each player try to win more customers in the market (Bungert 2). The only slogan in this case becomes the price. In this case, each company will be aiming at out-pricing its competitors.
Consequently, this leads to fall in prices up to unsustainable levels and threatens the performance of Nielsen’s company. As a result of fall in prices, the company’s total returns will automatically fall. Meanwhile, the company will be forced to increase its expenses on promotion in order to retain or win more customers in increasingly competitive market. This will increase general expenses or operational costs. On the other hand, the total revenue will be falling as a result of fall in prices.
In 1996, Dun Bradstreet announced a plan to detach itself by forming three separate public companies. The decision for the split was as a result of the problems of high level of competition in the market which triggered prices wars among the competing companies. This split posed another major negative impact on top of price war. Nielson was left now alone to face these challenges, which threatened the survival of the company.
The Main Players or Actors Who Contributed To the Problem
Several causes have led to the problem that had driven Nielsen Company almost to its downfall point, thus triggering factors that undermine the performance of the company. One of the key players who have threatened the performance of the company is its competitions.
These posed unhealthy competition that has led to price wars. Consequently, this has led to a fall on the average level of returns. Another threat associated with competitors is the struggle for the available customers. Each player is determined to win customers away from its rivals.
This has forced Nielson to invest more in promoting its services. However, this approach increases expenses hence shrinking the profit margins. One of the main rivals to Nielsen is Information Resources, Inc. whose operations have negatively impacted on the company’s level of performance.
Dun Bradstreet has also negatively impacted on the company’s performance. This was around 1996 when the company decided to split in order to detach itself from its less profitable decisions. Another key player who has contributed to Nielsen’s problems is the Arbitron Company, which has posed a significant level of competition that has contributed to fall in prices significantly.
The management of the company also played a significant part in the reduction of the level of profitability. Nielson managed to recover almost immediately after getting a new CEO (Nielson Par 5).This implies that the management is also contributing to the fall. There is an opportunity for the management to change the operations of the company in order to improve its profitability; these include increased efficiency in the company’s operations among others.
Alternative Solutions as To How This Problem Can Be Alleviated
As already seen, Nielsen has been faced with high level of competition in both the Saudi Arabia and the global market. Therefore, there is a need to come up with effective strategic plans in order to win customers from competitors. The company should also put more effort in developing its competitive advantage.
One of the ways through which this problem can be eliminated is through unilateral pricing. Unilateral pricing can solve the problem of price wars if the participating companies can commit themselves fully to the agreement (Bungert 3). Another method that the company can apply to solve this problem is application of the necessary marketing and promotional tools.
This will help the company in creating comparative advantage over its competitors. This problem can also be compressed by development of an effective organizational culture, which can help the company to increase its efficiency. Indeed, high level efficiency enables an organization in reducing its operational costs hence increasing its profitability.
How Each Alternative Can Be Implemented
Coordinated pricing
Unilateral pricing is one of the main ways through which a company can solve the problem of unhealthy competition that leads to price wars. Through unilateral pricing, the competing companies come up with a certain price, which each company should adhere to. In this method, the competing companies jointly increase their prices uniformly. This helps all the players in increasing their profitability levels. However, the level of competition remains constant even after application of this strategy. However, this method suffers from the fact that some companies may fail to commit themselves fully in the agreement.
Marketing
One of the ways through which the company can improve on its performance is through marketing. In every organization, there are some key marketing management decisions, which play a pivotal role in determining the performance of an organization. Managers have the ability to control these variables in their attempt to maximize the satisfaction level of their customers (Silk, 150).
These include the product, price, distribution, and management. In every day operations of an organization, the total number of sales it makes plays a very important role in determining the overall performance. However, the number of sales made is in most cases directly proportional to the number of customers.
At Nielsen, marketing can significantly help in solving the current problem. The main target in every organization is to maximize the level of sales. In this case, Nelson Company’s sales are determined by the total number of clients seeking its services. However, it requires an organization to invest in marketing and also be able to come up with best marketing strategies which would help in maximizing sales.
In the current business world, the market has become extremely competitive due to entrant of many players in the market. In the case of the research, information on consumer’s behaviour has increased significantly over the past. In order for any organization to be successful in the market, they need to have effective marketing strategies. This will help an organization to reach as many customers as possible hence maximizing its sales.
It is important to note that it is necessary to bring to consumer’s information the availability of the product or services in the in the market. Even though the company has well developed market, the company needs to retain the stability of these markets. It will be advisable for the organization to take the necessary steps in order to promote its product.
Public relations
Public relations can significantly help the company in expansion of its level of sales. According to Pezzullo, public relations play an important role in helping an organization and its public in adapting mutually to each other (Par 4). Several companies have applied public relations technique in increasing their sales. A good example of such a company is Jean’s Coffees Company.
The company uses this method by creating a good picture on the eyes of the media hence encouraging positive commentary from them. This significantly contributes in promoting the company products in its market networks. Through public relations, Nielsen can be able to develop a good relationship with the public. This will significantly help in strengthening the bond between itself and its clients. In many cases, Nielsen maintains long-term contracts with its clients since it offers recurrent services.
One advantage of this method is that is possible to reach a large number of customers (Tutor2 Par 3). This reduces the average costs of marketing the product. The message sent through public relations seems more credible as they are viewed as coming from different parties (Tutor2 par 4).
This improves on the effectiveness in enticing consumers to buy the product. Some of the tools, which the company can use through public relations, are tools like magazines and newspapers, which have of great importance to many companies. However, this method suffers from the fact that the company may lose control. For instance, the Company cannot be able to convince all the people what to say or write about them.
Promotion
Over the past, most of the most successful companies have applied promotion tools in their operations. These organizations have recorded a high rate of expansion and growth, which has been the main factor, which has contributed to their success. In the global market, the success of many organizations can be attributed to the well-structured promotion strategies as a part of their marketing mix. There are several methods of promotion. These include advertising, public relations, personal selling, and media.
Advertising
Advertising plays a pivotal role in determining the success of an organization especially in the global market, which is characterized by consumers with a diverse background, and high level of competition. In advertising, Nielsen Company can use several types of media to pass information to its potential customers.
This method of promotion can have huge impact especially when the company is extending its services in new market network. The company can apply variety of media including printed, broadcasting and display media. Television is one of the frequently used media by many companies. One of the main advantages for using television is because it helps the company to reach a greater number of its target audience.
This is more so bearing in the mind the fact that the company is involved in the global market where it may be very expansive to use other methods. Therefore, this media lowers the promotion cost per head. Through this method of advertisement, the Nielsen will manage to build its brand in new markets. Over the past, this method has yielded good returns through increased level of sales.
Another method of advertisement which can be applicable to Nielsen Company is the display media. This method has also significantly contributed in increasing the level of sales in various organizations.
Through the display media, the company uses eye attracting pictures which easily attracts the attention of the targeted audience in the market. Consequently, the company manages to pass information more easily to the group. One major advantage of this medium of advertisement is that it is more cost effective. It does not require large sums of money like in the case of television.
Advertisement as a method of promotion is associated with a number of advantages. To start with, advertisement is effective in reaching a wide range of audience (Trehan, and Trehan 35).This is more so when advertising is conducted through a media covers a large number of people. The method will reach greater number of people compared to other methods like the sales promotion. Another advantage of this method is that it is most effective in creating awareness.
When the audience views a certain advert on television regularly, this increases their awareness of the presence of the product in the market. This builds their curiosity to try the new product. In this case, this method will help the company in winning new clients in new markets. This significantly helps in increasing the level of sales. Again, advertising helps in building customer trust through repetition of the main brand and product.
Despite of these achievements of advertising as a method of promotion, it suffers some limitations. To start with, this method is impersonal and therefore it becomes impossible to answer the customer’s questions. However, when a product is introduced in a new market, customers usually have some questions about the product.
In this case, some potential clients may be wishing to ask some questions from Nielson on the services provided in depth. In this case, there is a need to have close interaction with potential clients in order to win them. The company will also not be in a position to understand the needs of their potential clients. For instance, it becomes difficult to pick views from the potential customers through this method of promotion. This may limit the success of promotion to some extent.
When used on its own, this method is not effective in inducing potential customers to make their final decisions in choosing the company’s product. In other words, this method is not hundred per cent reliable in convincing the customers to choose the product from the company in question.
Sales promotion
One way through which Nielsen can invite a larger figure of customers is through sales promotion. Sales promotion can significantly help an organisation in expanding the number of its customers or clients hence boosting the level of sales. In addition, sales promotion has been of great importance in creating consumer awareness.
Through promotion, the company will manage to bring its potential customers to awareness of the service in the market. This method has been of great importance especially to these companies venturing into a new market. In some regions, most of the people may not be aware of the company’s product. In this case, it becomes very difficult to sell the product in such market. However, the company can overcome this barrier through sales promotion. This attracts customers hence increasing the level of sales.
One advantage of using sales promotion is that it can stimulate quick increases in sales by targeting promotional incentives on particular products. These can significantly help in improving the performance of the organisation in the short run. This method has helped several companies in increasing the sales in their market networks (Trehan and Trehan 57).
This method has been of great importance when the company is venturing into a new market. As already noted, Nielsen has been spreading at a very high rate. For instance, the company has been extending its services in other parts of the world in a very high rate. In such new networks, most of the people may not be aware of the company’s services.
In this case, it becomes very difficult to sell the services in such a market. However, the company can manage to bring awareness to the potential customers through sales promotion. This attracts customers hence increasing the level of sales. In this case, Nielsen will manage to expand its market despite of the high level of competition.
One advantage of using sales promotion is that it can stimulate quick increases in sales by targeting promotional incentives on particular products. These can significantly help in improving the performance of the organisation in the short run.
Personal selling
This is a process where the sellers engage in oral communication with the potential buyers with an aim of making a sale. This method can significantly help Nielsen in developing new markets. Through this method, the company manages to convince potential customers to go for its services. This helps in winning consumers from the competitors in the market.
One advantage of this method is that it is interactive and therefore possible to get the feedback from the customers on their views over the services provided. This helps the company in analyzing the tastes of consumers in a certain region. Through this method, the company manages to pass important details about its product to its customers.
This method however suffers from the limitation that it is not possible to reach a very large number of people. Therefore, it proves impotent in some cases where the market is too big especially in this case where the company is involved in the global market. This method is also costly as it requires the organisation to hire more sales force which comes along with hidden costs. This has negatively affected the productivity of the organisation.
Importance of promotion as a policy mix in overcoming the problem
In every organisation, promotion is a very important practice in determining the success of an organisation. This is because the level of sales which a company makes is determined by the effectiveness of its promotional process. Therefore, it is necessary for organizations to invest in promotional activities. Promotion as one of the marketing mix plays a very important role every organisation. In the current business world, the market has become very competitive than any other time. Consumer expectations have also significantly changed.
This situation has increased the need to have a clear promotion strategy. To Gloria Jeans Coffee’s, promotion has contributed to the success of the organisation in various way. Through promotional activities, Nielsen Company can reduce any confusion to the consumer in the oversaturated market where several companies are providing similar services.
In the current business world, many consumers have developed a culture of looking for the promotions before purchasing. Therefore, it is important to conduct promotion in order to attract such kinds of consumers in an organisation. However, it is necessary to analyze the returns to associated with the promotion exercise (Anonymous par 7). If returns are low, promotion measure should be discarded.
Another importance of promotion to the organization is provision an extra incentive to choose the service. For instance by providing promotions to the consumers, it gives them a chance to realize the quality of the services provided. This can significantly help in attracting potential customers going for the services provided by the company.
Some limitations of promotion to the organisation
One of the main reverse effects of promotion activities is the fact that some consumers may just sit back and wait for the incentives. In such cases, the organisation fails to realize the desired aims of promotional activities. This implies that the company does not compensate for the funds spent in providing incentives to such consumers.
In executing promotion as a marketing mix, the company incurs some costs. This has significantly reduced the profit margins of the company. Again, customers may tend to lower their demand in order to receive promotion. In this case, the promotional activities bring about reverse effects. When this happens, the promotional exercise fails as it will lead to losses.
Development of organizational culture
Another way through which Nielsen can manage to win more customers as well as developing its competitive advantage is by developing an organizational culture. The level of competition seems to be intensifying with time. Therefore it is expected that the level of competition will be even high in the future.
Therefore, it will be advisable for the organization to develop a culture which will facilitate its success. Organizational culture can be defined as tacit but understood regulations in a particular organization which determines what is regarded as right or wrong, necessary or unnecessary, and how an organization responds to any deviation from day to day activities.
Every member of an organization must be familiar with this code in order to direct their behaviour as expected by other members of an organization. All new members must internalize this code which enables them to behave accordingly. Organizational culture bonds employees together as one which promotes realization of the organizational goals.
In every organization, culture plays a major role in directing the conduct of employees. The employees will always tend to behave according to the cultural specifications of an organization.
One of the most surprising aspects of the organizational culture is that we can encounter similar organizations under the same environment and in some cases with similar technologies but with different organizational cultures. As already noted, organizational culture assists new employees in an organization to know the correct way in which to conduct their behaviour.
This significantly reduces inefficiencies which are associated with absorption of new employees. Therefore, creating and sustaining a culture at Nielsen is very important in promoting the company’s success. The company should therefore pay a critical attention in creating as well as sustaining organizational culture.
Creating an organizational culture
As already noted, organizational culture plays a very important role in shaping the behaviour of employees. Organizational culture therefore significantly contributes to the success of an organization. Weak organizational cultures are associated with poor performance in the respective organizations.
Since a culture is difficult to change once engraved in employees, it is important for the leaders to be careful while creating organizational cultures. Strong cultures are associated with innovation and growth. Therefore, creation of a strong culture will help Nielsen in surviving in a competitive market. It will improve its efficiency which will help in retaining its operations in the market.
There are three main sources of the organizational culture. According to Schein, organizational culture can result from the values, assumptions, and beliefs of the founders of a particular organization (219). The founders of an organization plays a vital role in the establishment of the organizational culture since they determines the environment under which the first group of employees in an organization will work as well as the organization’s missions.
Consequently, the first founders will determine the manner in which the first group will react in an effort to be fit in the organization’s environment. The founders of an organization also have a major impact on the way an organizations handles the external problems and the manner in which problems are handled.
Due to the fact that the founders of an organizations holds the original idea, they therefore have their own way on how to fulfil their ideas which is based on the personalities and their cultural history. However, some of these methods may not be efficient. In 1990s, when the market was characterized any unhealthy competition which led to price wars, Nielson was very optimistic after receiving a new Chief Executive Officer, Trivisonno.
He was very determined to change the situation within the shortest period in order to save the company from a complete fall (Nielsen par 9). The new CEO decided to streamline the company’s operations and other strategies to revive the organization. Through these efforts, the CEO managed to increase Nielsen’s profitability within a very short time (Nielsen par 10).
Organizational culture can also spring out from the learning experience of the members of a particular organization in the process of development (Schein 219). As an organization continues to mature, employees can develop a culture from the experiences they encounter in the process.
For instance, employees may be faced by a certain problem over a certain period of time. With time, these employees may develop a culture of solving that particular problem based on the methods which has worked best over the past. This strategy will significantly help Nielsen in developing a competitive advantage.
Finally, culture can also result from new values, assumptions and beliefs which are integrated in the organization through the new members (Schein 219).
When new employees get recruited into organizations, they come along with new ways of doing things. Although they are encouraged to adapt the culture of their new organization, some aspects of their previous culture will always be reflected in their behaviour. Through their interaction with other employees, new employees may export some aspects of their former culture.
With time, these aspects get engraved in the culture of an organization. At this point, it is important for the leaders to ensure that only strong aspects of culture are imported from other organizations. Otherwise, this may lead to importation of failure related cultural aspects.
There are several main steps which are necessary in creating a strong organizational culture. These steps are important for Nielsen as they will increase its ability to sustain itself in a competitive market. To start with, an organization must define its goals. This will enhance an organization to identify the changes it needs to carry out on its culture.
This is based on intensive research on each of these methods. After defining its goals, an organization should then identify the strongly performing aspects of culture. An organization should make an effort of developing and retaining such aspects. Then, an organization should modify its daily working procedures in order to improve on its performance (Plante par 4).
After creating a strong organizational culture, it is also important to put efforts of sustaining the culture. According to Schein, a culture cannot survive if the main culture carriers depart or if there is conflict over the ideas by the leaders. Conflict leads to cultural instability hence poor performance by these organizations. On adapting to these changes, Nielson will be able to win the customers from its competitors.
As an effort to sustain effective organizational culture, every organization should make an effort of giving new employees the procedures which guides the behaviour of every employee in an organization (Frost 29). Employees should be informed about the most important rules in the organization.
For instance, the leaders should always remind employees about the rules which have a significant impact on the performance level of an organization. An organization can also sustain its culture through formal statements of the philosophy (Anonymous par 5). This can be through mission statement, vision statement or statement of the values guiding an organization.
Nielson’s SWOT analysis
In every organisation, the SWOT analysis is very important in enabling an organisation to determine its position in the market. This analysis also enables an organisation in detecting its areas of weaknesses which is necessary in formulation of the necessary policies. This analysis also provides an organisation with a clear understanding of its strengths. The SWOT analysis also provides information about the opportunities available in the market for the company.
This information is necessary in providing an organisation with the necessary information about the market. SWOT analysis is one of the most valuable resources which provide the executives with important information that is necessary in making critical decisions. In other words, SWOT analysis is of great significance in understanding of the key information concerning the company.
Strengths
Nielsen Company has several strengths which have significantly contributed to the achievements which the company has recorded over the past. These strengths have also helped the company in surviving in its competitive market environment which characterized with a very high level of competition.
The major strength of the Nielsen Company lies on the fact that the company has managed to capitalize on research innovation. Research and innovation is one of the main strategies which have been applied by most successful companies in an effort to improve their services to the clients.
Research and innovation contributes in consumer satisfaction. Through research, Nielsen has managed to maintain a constant high level of development on its product. This has enabled the organization in providing high quality services. This has enabled the company to retain its customers. Research and innovation has also contributed in developing the company’s comparative advantage.
Over the past, the company has kept a good record for provision of high quality data with high level of integrity. This has led in development of the company’s reputation in its market networks which has led to improvement in the level of sales. This has also led to improvement in the company’s reputation.
Other strength of the company is based on the fact that the company has managed to capitalize on the weakness of its competitors. For instance, the company has given more attention on measures which can lead to reduction of its operational expenses. Consequently, the company will be able to under price its competitors.
In other words, the company has managed to change its operations in order to adjust accordingly with changes in the market conditions. For instance, the company streamlined its operations with the help of its newly elected chief executive officer in 1990s.
Nielson has also managed to acquire the ownership of some of the famous companies in the industry which causes competition to the company. This has significantly helped the company in expanding its market share. For instance, Nielson has recently taken under control of the IAG. IAG research measures the effectiveness of the advertising and program engagement. IAG works with a wide range of clients which includes advertisers, internet providers, telecommunications services and content providers.
On the other hand, Nielson measures what consumer views. Therefore, the combination of the two entities will significantly lead to the improvement of the services offered by the company. This will also help in winning more customers as a result of merging these two entities. This has helped in development of a comparative advantage over other companies.
Finally, the company has a wide range of data collection tools. This is unlike in the case of other companies which have been over relying on a few tools in data collection. This therefore distinguishes Nielsen Company from other similar companies. This achievement has enabled the company to provide deeper insight into current markets. This has significantly helped these companies in expanding their services.
Weaknesses
The main weakness of the company is based on the fact that it has not managed to diversify on its operations. Diversification can help an organisation in surviving in a competitive market. This is because its overall profitability is not significantly affected in case one field fails.
Opportunities
Despite of the tough times that Nielson had been undergoing over difficult moments, the company has some opportunities. These opportunities have favoured the company over its competitors. One of the main opportunities of the company is kits ability to grow very fast. Over the past, the company has recorded a very high rate of growth.
Another opportunity of the company lies on the fact that the company has been in the industry for a long period. The company has previously recorded good performance in terms of expansion. For instance, the company has acquired several companies through mergers. This has significantly favoured the company’s operations. The company has also managed to target best market opportunities in its networks. This has significantly helped the company in improving on kits level of sales.
Threats
At Nielsen Company, there are several threats which have undermined the performance of the organization both in the short and the long run. These factors have posed a big danger to the organization in the effort to maximize its profits.
One of the main threats which pose a major danger to the company is the high level of competition. The company has been faced with a very high level of competition. As already seen, companies offering market research services like Information Resources, Inc. (IRI) has posed a major threat to Nielsen.
Over the recent past, more players have been entering into the market which has led to these companies crowding in same clients. This competition has led to prices wars, a situation which has led to fall in prices to almost below the equilibrium level. This has posed a big problem to Nielsen. Such unhealthy competition leads to the reduction of the total revenue, a situation which has lowered the profitability of the organization.
Implications of the study for future use
This study is of great importance to the company in the future. It has provided enlightenment to the company which has significance implication for the future. This is more so to the international corporations whose operations are extended in various countries. In he future business world, the level of competition is expected to be extremely high.
This implies that only those companies with a well developed competitive advantage will manage to survive in such markets efficiently. This study will therefore be of great significance as it helps organizations in developing their competitive advantage.
The study has indicated that Nielson recovered very first after the new Chief Executive Officer took over control of the company. This has a critical implication in the future. It indicates that the leadership can significantly affect the performance of an organisation. The new CEO managed to make necessary adjustments which led to a sudden improvement in the company’s level of performance.
The new CEO decided to streamline the company’s operations, after which the company recorded an improvement in its level of performance. This implies that it will be important for organizations to adjust accordingly depending on the prevailing conditions. This will require organizations to have a perpetual reconsideration of their strategies in order to adjust accordingly. Some strategies are feasible in some conditions while the same strategies may prove impotent in other situations.
Conclusion and Recommendations
In conclusion, this dissuasion has clearly shown that Nielsen has encountered severe problems in the market. The root of the problem is the high level of competition which has affected the profitability of the organisation. Unhealthy competition has led into price wars between Nielsen and its rival in the market. As a result the company has suffered from increased expenses in an attempt to win back and retain its customers. The level of competition continues to increase as more competitors enter into the market.
It is recommended that every organisation make necessary adjustments in order to be able to combat the problems which result from excessive and unhealthy competition. The study has indicated that prices wars have led to the fall in prices. Therefore, it is Advisable for the company to make necessary adjustments in order to reduce the overall operational costs.
This will help in compensating any reduction in prices as a result of excessive competition. The company can also compensate for fall in prices by applying strategies which can increase their performance levels. By so doing, the company will be able to under price its competitors despite the level of competition. In other words, the company will manage to lower its prices and still retain its profitability.
From this discussion, it is clear that there is a need for organizations to propose the development of success culture; a culture where every employee is committed to the success of an organization. One of the way through which this could be done is through modification of day to day working procedure.
For instance, Nielson may decide to make some modifications on how the company conducts its research. This adjustment may lead to improvement of the services provided by its clients. It is also recommended to facilitate effective communication in an organization. This will significantly help in improving the level of efficiency in the organization. Consequently, the organization will manage to sustain itself in a competitive world.
Works Cited
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