Page 132 - MYM 2016

Measuring and Managing Market Alignment Risk
fig. 2: Market alignment risk Pro le of the low Performer business
Low Performer - High Risk Pro le
By subtracting the numbers in the chart above from 100% we arrive at a Market Alignment Risk Pro le.
Figure 2 shows the risk pro le of the low per- former business shown in Figure 1. Five of the seven cultural traits are in the highest risk band (over 90%): competitor foresight (98%), peripheral vision (98%), competitor insight (97%), customer foresight (96%) and strategic alignment (93%). is business is exposed to very high market align- ment risks and would be wise to adopt immediate customer focus initiatives to reduce exposure.
In practice this would require initiatives within
the business to embed cultural behaviors that create customer-centric activities and embed
a broad-based understanding and actions that factor in current competitors’ strategies into deci- sion-making and everyday behaviors. Low strategic alignment means that lack of understanding of vision and strategy is diluting the e ectiveness of activities of various functions in the business. Low customer foresight indicates either a complete lack of focus on acquiring new customers or ine ective activities in attempting to attract them. By taking these actions to drive cultural change this business would reduce its risks and increase its pro tability.
is same analysis can be done for di erent sub-groups within the business so that risks and opportunities are identi ed and measured deep
Low Performer Risk Pro le
132 | MINd YOUr MarkETING OCTOBEr 2016
into the business, and so that marketing leaders and their sta can act on those risks appropriately.
ese are examples of reports that senior marketing leaders and their colleagues should see to understand the risks faced by the business in achieving the strategic market objectives.
Step 3: risk Prioritization: assess the risks in relation to objectives and Market Strategies
Risks are prioritized by assessing them in rela- tion to the objectives and strategy of the business. is is a task that can be led by marketers and reported to the leadership team. As an example, the low performing business with risks depicted in Figure 2 has two main business objectives and strategies:
1. Achieve sales growth by equal focus on current and new customers
2. Increase market share by taking customers from existing competitors through delivery of an enhanced product and service
e risk pro le of this business in relation to its objectives suggests that the most important risk is that of losing its current customers (risk pro le of 66%). is risk has an impact on the risks associated with gaining new customers (risk pro le of 96%).