Xi CHEN 13033277

The Important Factors of Strategy

152200 Contemporary Management
Question 2

Name: Xi Chen
Student ID: 13033277
Email: westchenxi@gmail.com
Tutor: Dr. Andrew Cardow
1767 Words

Xi CHEN 13033277

In these days, business practitioners may think that capturing market is the
core developing direction which guiding an organisation to making business
strategy; setting the goals to achieve success. However, nothing in the world
is absolutely. Theoretically speaking, a company with a successful strategy
driven its market share increasing; from a realistic point of view, just
depending on market capture is not a standard to measure a business
strategy succeed or not. Owing to its particularity, Strategy has no accurate
definition, so strategy has various ways to apply in business activities, people
lives and militarily field. Market capture is only a part of the marketing
strategy that it is aimed to achieved. The purpose of marketing is analysing
consumers behaviour. This essay through analysed the branding strategy,
the marketing strategy and the corporate strategy to oppose the original
argument. Obviously capturing market is only a part of strategies which
marketing pay attention to.

The relationship between strategy and market capture

Before discussing this statement, it is necessary to find out: the definition of
strategy and market capture. The concept of strategy first appeared in
military term. In the West, strategy comes from the Greek strategos, means
military leaders. After a long period of change, contemporary enterprises
blended it into operating a business. Yet, strategy is still a vague subject that
2

Xi CHEN 13033277

can be used in a variety of different fields in business environment, such as

marketing strategy, communication strategy, sales strategy, growth strategy,
management strategy. Whenever an enterprise facing difficult that the core
strategy will give assistance. Furthermore, each work team within a
department should have their own team-level strategy that ensures to
complete daily achievement. At a department-level strategy within an
organization should consider about competing with other departments and
achieving success in individual markets.
Market share is a numerical form of market capture. It refers to a total
percentage of a companys sales in a similar product in the company's
market share. A new technology can reduce costs for production and
increasing the competitiveness of the market, thereby raising the percentage
of market share. By analysing market share, strategy makers are able to
planning; by analysing market factors to find the specific reasons of market
share rising or falling and for enterprises to improve their marketing systems
provide clear goals. The strategy made by analysing market share, it is aimed
to capturing customers in the market.

Branding strategy
There are different strategies for different purposes, some will help increase
market share, but some strategies are used to control the future development
of the entire company. For instance, Spark was called Telecom and had
3

Xi CHEN 13033277

changed the name on 31 December 2013. Meanwhile, Telecom spent $20

million for changing signage into new brand --Spark. Even more someone on
the Twitter pointed out: this move is very foolish. However, there was
another voice claimed, Company chief executive Simon Moutter said 'Spark
better reflects the company's new direction and the aspirations it has for its
place in the life of New Zealanders'.(Fletche, 2016).
Under the traditional idea, people generally thought that Telecom will certainly
lose some frequent customers in the event of changing the name. The
expense of $20 million is such a waste for replacing all sign included all
brochures, shop signs, all advertising, and Telecoms logos. Nevertheless,
has anyone ever considering why a big company carried this new strategy
out? In my opinion, this strategy may be a loss in current state, but it is only
going for a short period. A strategy should be focused on overall situation; a
business strategy should be a long-term strategic planning. To achieve a
strategic victory, sometimes an organisation tends to sacrifice part of the
benefit.
The big advantage of developing a brand strategy is based on creating a
golden brand that every customer was attracted by the company's brand,
instead of chasing people and begging people to buy what you sell. The
outcome of the branding strategy is to build a powerful brand that customers
would like to spend money because the reputation of the company. Also, the
company will gain a reputation, a long- term running steadily. As we know,

Xi CHEN 13033277

Spark had changed its former name. A bit of history is helpful for
understanding this evolution. In 1987, Telecom (now called Spark) launched
the first New Zealand's mobile phone; in 1989, the first connected internet in
New Zealand. After brand changed, Spark now moved to a new field called
internet TV market in 2014. Over 20 years, internet technology has grown
extremely fast, it has changed normal social lifestyle, and simple telecom
service cannot meet modern people's lifestyle and working model. Spark by
changing its name to show people what their value and their attitude are
taking clients to go into a new high technology are.

Marketing strategy
Marketing strategy is through analysing consumer behaviour to establish. As
Mike Grigsby (2015) mentioned, Marketing drives financial result and in
order to be marketing-oriented there must be a consumer- centric focus (p.
21). A companys marketing strategy by understanding consumer behaviour
is the main purpose of increasing market share.
Economists have studied and confirmed by increasing its market share, can
be getting a big return. The Paul Bloom & Philip Kotler (n. d) disagreed with
this speech and response that, a large market share does not meant this is a
good market share. Although some people think profiting from the market,

Xi CHEN 13033277

oppositely some people think that it expected the risks outweigh the benefits
themselves.

Branding Versus Marketing

Some people put efforts on marketing that do not thinking of branding, it is
too in a hurry to be succeeded. As John Morgan (2010) wrote, "The only
difference between you and your competition is your brand"(P.70). By the
Coca-Cola company data, every day 1.9 billion bottles of Coke are drunk. In
China, even elder people who do not drink Coke will also prepare a bottle
before their grandchildren visited. Because they know their grandchildren like
it. Coca Company focused on packaging design, advertising. Its sign is never
out of date, Red fonts like convey a positive attitude. Coca-Cola's brand has
brought market-profit growth. Customers will choose its brand products from
among similar products because they trust. In the beverage industry, we
have seen the emergence of numerous brands, but Coca-cola is still
outstanding in the non-alcoholic beverage domain. The strategic direction to
extend the company's age, increase the level of a similar industry.

Xi CHEN 13033277

Above figure 1:

(Roy Morgan Research, 2015)

Coca-Cola retained the Number 3 position on esteemed annual ranking of
most valuable global brands for the second consecutive year. The brand
value of Coca Cola is estimated at $81.6 billion in 2014, it is up 3 percent
from 2013. It compares with New Zealand soft drink brands, Lemon &
Paeroa. The market share of Coca Cola is almost 80% and Lemon & Paeroa
only has 10% (Roy Morgan Research, 2015). As a whole, this figure
reflected the information of market share in each county; even though, each
county cannot compare with others because of local policy, economic level,
consumption ability.

Xi CHEN 13033277

In New Zealand, there are several supermarket brands people known. If you
have a big family, you would like to go PAK'nSAVE; if you prefer lovely
shopping environment, you would go New World. They are all supermarket
selling similar products but each brand has transferred the feeling totally
contrary.

Porters Five Forces Model

Michael Porter in the early 80 proposed Porters Five Forces Model, have
lasting global impact for corporate strategy. Usually used in the competitive
strategy, effective analysis of competition environment. Five different aspects
together affect the business environment both inside and outside of the
enterprise, and easily change business's advantage into disadvantage. It is a
simple method to understand the situation of your business and an effective
tool for making corporate strategy.
Bargaining power of customers: Consumers directly affects the market as
a whole. With global economic integration, many foreign products have
turned up in front of customers that customers have the chance to pick the
product with the best value.
Bargaining power of suppliers: Supplier has the power if what they offer is
unique. Primarily through its creasing prices to influence existing enterprises.
High input but low quality of unit values. Such as drug dealer raised the price
from $13.5 a tablet to $750.
8

Xi CHEN 13033277

Competitive Rivalry: Competitors in the industry, as part of the overall

strategy of the enterprise, also interests are closely linked with others. Nike
and Adidas, use their resources to supporting concert, sports competitions,
and provide clothes for pop-singer and great soccer team, to gain attention
and market share
Threat of Substitution: Two enterprises in the same industry or in industries,
possibly because the products are alternatives to each other, resulting in
mutual competition between them, which originates from the alternative
sectors in various forms of competition existing in enterprise's competitive
strategy.
Threat of New Entry: A high-return business will attract new entrants into the
industry, potential entrants to join will lead to more intense competition in the
market, and this may affect pricing structure.
According to five factors, strategy pivot is not in the market capture. A
company should consider supplier strategy to dealing with suppliers; pricing
strategy to reducing costs; competition strategy to enhance itself advantages.
There are always present potential problems because the new entry and
competitors share the same market. Some companies decided to open
another industry, usually large companies can carry new project out. For
example, The Company P&G, business include in shampoo, hair care, skin
care, baby care products, food. The pursuit of P&G is sustainable

Xi CHEN 13033277

development by technological innovation, energy saving and environmental

protection.

In conclusion, because everyone has their own way of thinking, people are
able to develop different strategic directions. Thus some people believe that
data proves everything and the high market share rate of a company meets
stakeholders needs. At the same time, some people prefer their own
strategies for sustainable development. Market is changing every passing
day, whereas a company cannot set new strategy every day. As many
successful organizations have a strategy to control the overall situation.
Strategy have multiple purposes, core strategy leads the whole company go
to the right direction, many different level and aspect strategies support every
unit team within a company to capture each market in their own field.
Through analyzing branding strategy with the case of Spark, we understood
that capturing market is one of those purposesa company's strategy keen
to reach. For the best to make strategy, deciders should be considering all of
the situations, trying to understand your customers but not chasing them.

10

Xi CHEN 13033277

Reference:
Fletche, H. (2014). Telecom changing name to Spark. Retrieved from
http://www.nzherald.co.nz/business/news/article.cfm?
c_id=3&objectid=11207031
Grigsby, M. (2015). Marketing analytics. Great Britain and the United States:
Kogan Page Limited.
Bloom, P. & Kotler, P. Strategies for High Market-Share Companies.
Retrieved from https://hbr.org/1975/11/strategies-for-high-market-sharecompanies
Morgan, J. (2012). Brand against The machine. Canada: John Wiley &
Sons, Inc., Hoboken, New Jersey.
Roy Morgan Research. (2015). Retrieved from
http://www.roymorgan.com/findings/6169-cola-king-aust-nz-indo201504130100
Cola is king in Australia, New Zealand and Indonesia. (2015). Retrieved
from

http://www.roymorgan.com/findings/6169-cola-king-aust-nz-indo-

201504130100

11

Xi CHEN 13033277

Heaton, J. (n. d). What is marketing strategy? Retrieved from

http://www.tronviggroup.com/marketing-strategy/

12