MNG2602 EXAM REVISION PACK

THE MARKET ENVIRONMENT CONSISTS OF THE FOLLOWING KEY VARIABLES: Consumers  You need to explain here that the market consists of people with specific needs that have to be satisfied and who have the financial ability to satisfy their needs.  Consumers are the chief component of the market environment. The organisation’s marketing offering is targeted at the consumer.  There are five groups of consumers or markets, namely; consumer markets, industrial markets, government markets, resale markets and international markets.  A practical application example can be that Standard Bank indicates in the case study that they have 475 million consumers in 33 countries. They need to make sure that their marketing offer satisfies all of these group’s needs.  We assume that Standard Bank has different products and that each of these products are marketed to a specific segment and that the marketing and the product satisfies this group’s needs. Competitors  You needed to define competition as a situation in the market environment in which several organisations with more or less the same products or services compete for the support of the same consumers.  Competition often determine how much of a given product can be marketed and at what price. Competition keeps excessive profits in check, acts as an incentive to higher productivity and encourages technological innovation.  You could also have discussed that the intensity of competition in the environment is determined by five factors, namely; possibility of new entrants or departures, bargaining power of clients and consumers, bargaining power of suppliers, availability or lack of substitute products or services and the number of existing competitors.  You could have also discussed the competitive market structures. For the practical example, you can assume in South Africa that Standard Bank is in competition with other South African Banks and you can provide some of these as examples.  Thus Standard Bank needs to always keep the competitor offerings in mind as well locally as well as globally in the different markets that they compete. Suppliers  Suppliers are entities who provide or do not wish to provide products, raw materials, services and even financing to the business. The enterprise requires inputs from the market environment.  You needed to explain that inputs are primarily material including raw materials, equipment, energy, capital and labour, which are provided by suppliers.  If a business cannot obtain the necessary inputs of the required quality in the right quantity and at the right price for the achievement of its objectives it cannot hope to achieve success in a competitive market environment.  A supplier for Standard Bank can be the company that supplies them with the plastic magnetic strip cards that they give to customers or the deposit slips customers use in the bank or the computer systems that are used in the bank.  All of these elements are needed for Standard Bank to compete in the market. FEATURES OF THE NEW ORGANISATION AND THE CHALLENGES MANAGERS OF NEW ORGANISATIONS HAVE TO FACE FEATURES MANAGEMENT CHALLENGES Global  Develop and use global strategic skills manage change and transition  Manage cultural diversity  Design and function in flexible organisation structures,  Work with others and in teams,  Communicate effectively  Learn and transfer knowledge in an organisation Networked, internally and externally  Individual managers must develop their skills as team members and team leaders  Team structures and processes must be developed for each kind of team in the organization  Networks with outside organisations involve forming alliances with customers, suppliers, and competitors and an organization must develop systems to manage information flows with the organisations with which it forms alliances Flat and lean  Managers must develop negotiating skills, to enable them to negotiate win-win situations for all involved in flat structures  The organisation must provide alternative incentive systems and new concepts of career planning that involve more horizontal than vertical movement  More frequent and effective communication between senior and junior managers Flexible • Multitasking • Flexible labour practices Diverse • Managers will need to shift their philosophy from treating everyone alike to recognising differences and responding to those differences in ways that will ensure employee retention and greater productivity • Training in diversity • Developing listening skills ORGANISATIONS • Organisations are open systems, which imply that organisations influence their environments and vice versa. • During the previous century, the environment was much more stable and the traditional form of organisation, the bureaucracy worked well. • Contemporary organisations function in an environment characterised by major, ongoing chance, hence the emergence of “new” organisation forms. FORCES THAT CAUSE ORGANISATIONS TO CHANGE • Organisations worldwide are changing because the environments in which they operate have changed drastically over the past decade or two and the pace of change is accelerating. The Forces That Stimulate Change Are: • Globalisation and the global economy • Advances in technology • Radical transformation of the world of work • Increased power and demands of the customer • Growing importance of intellectual capital and learning • The learning organization • New roles and expectations of workers WEBER’S MODEL PROVIDED A BLUEPR