182 CHAPTER 3: Corporate Appraisal Chapter Corprate Appraisal A Intoduction Meaning of Corporate Appraisal (TM 3-1) Scope of Corporate Appraisal (TM 3-2) B Corporate Publics Corporate Publics and Their Concerns (TM 3-3) Coors’ Commitment to Its Stakeholders (TM 3-4) C Value System of Top Management Corporate Culture of Select Companies (TM 3-5) Four Catagories of Corporate Culture (TM 3-6) Measuring Value Orientation (TM 3-7) D Corporate Resources Meaning of Corporate Resources (TM 3-8) Resources and Marketing Strategy (TM 3-9) E Key Success Factors in Difference Industries (TM 3-10) F Business Unit Performance (TM 3-11) 183 CHAPTER 3: Corporate Appraisal 3-1 MEANING OF CORPORATE APPRAISAL Corporate appraisal is a measurement of the readiness of the internal culture of the corporation to interact with the external environment Marketing strategists are concerned with those aspects of the corporation that have a direct bearing on corporate-wide strategy, which is referred to in defining business unit mission CHAPTER 3: Corporate Appraisal 184 3-2 SCOPE OF CORPORATE APPRAISAL 185 CHAPTER 3: Corporate Appraisal 3-3 CORPORATE PUBLICS AND THEIR CONCERNS PUBLICS Owners AREA OF CONCERN Payout Equity Stock prices Nonmonetary desires Customers Business reliability Product reliability Product improvement Product price Product service Continuity Marketing efficiency Employees of all ranks Monetary reward Reward of recognition Reward of pride Environment Challenge Continuity Advancement Suppliers Banking community and other lenders Government (federal, state, and local) Immediate community Society at large Price Stability Continuity Growth Sound risk Interest payment Repayment of principal Taxes Security and law enforcement Management expertise Democratic government Capitalistic system Implementation of programs Economic growth and efficiency Education Employment and training Civil rights and equal opportunities Urban renewal and development Pollution abatement Conservation and recreation Culture and arts Medical care CHAPTER 3: Corporate Appraisal 186 3-4 Coors’ Commitment to its Stakeholders Corporate Philosophy: “Quality in all we are and all we do” Customers: Provide them products and services of recognizably superior quality Suppliers: Build quality relationships Contracts and prices should be mutually beneficial Community: Improve quality of life by complying with all the laws and the corporate code of conduct Stockholders: Consistently pay dividends and seek appreciation in the value of capital 187 CHAPTER 3: Corporate Appraisal 3-5 CORPORATE CULTURE OF SELECT COMPANIES • International Business Machines Corporation: Marketing drives a service philosophy that is almost unparalleled • International Telephone and Telegraph Corporation: Financial discipline demands total dedication • Delta Air Lines Inc.: Focus on customer service produces a high degree of teamwork • Microsoft: Emphasis on innovation creates freedom with responsibility • Toyota: Standards in efficiency, productivity, and quality are the most important pursuits • GE: Conduct continuous campaigns to become the lowest-cost producer in its area CHAPTER 3: Corporate Appraisal 188 3-6 FOUR CATEGORIES OF CORPORATE CULTURE Academies (example: IBM) • Have parents who value self-reliance but put less emphasis on honesty and consideration • Tend to be less religious • Graduated business school with high grades • Have more problems with subordinates in their first ten years of work Clubs (example: United Parcel Service) • Have parents who emphasize honesty and consideration • Have a lower regard for hard work and self-reliance • Tend to be more religious • Care more about health, family, and security and less about future income and autonomy • Are less likely to have substantial equity in their companies Baseball Teams (example: accounting firms) • Describe their fathers as unpredictable • Generally have more problems planning their careers in the first ten years after business school and work for more companies during that period than classmates • Include personal growth and future income among their priorities • Value security less than others Fortresses (example: retailers) • Have parents who value curiosity • Were helped strongly by mentors in the first year out of school • Are less concerned than others with feelings of belonging, professional growth, and future income • Experience problems in career planning, on-the-job decisions, and job implementation 189 CHAPTER 3: Corporate Appraisal 3-7 MEASURING VALUE ORIENTATION CHAPTER 3: Corporate Appraisal 190 3-8 MEANING OF CORPORATE RESOURCES Resources are distinctive capabilities and strengths Resources may be categorized as: • Financial strength • Human resources • Raw material reserve • Engineering • Production • Management • Marketing 191 CHAPTER 3: Corporate Appraisal 3-9 RESOURCES AND MARKETING STRATEGY Has ample cash on hand (financial strength) Average age of key management personnel is 42 years (human resources) Has a superior raw material ingredient in reserve (raw material reserve) Manufactures parts and components that go into the final product (plant and equipment) Products, if properly installed and serviced regularly, never stop while being used (technical competence) Has a knowledge of, close relationship with, and expertise in doing business with the grocery chains (marketing strength) CHAPTER 3: Corporate Appraisal 192 3-10 KEY SUCCESS FACTORS IN DIFFERENT INDUSTRIES SPECIMEN INDUSTRIES KEY FACTOR OR FUNCTION TO INCREASE PROFIT TO GAIN SHARE Raw materials sourcing Uranium Petroleum Production facilities (economies of scale) Shipbuilding, steelmaking Shipbuilding, steelmaking Design Aircrafts Aircrafts, hi-fis Production technology Soda, semiconductors Semiconductors Product range/variety Department stores Components Application engineering/engineers Minicomputers Large scale integration (LSI), microprocessors Sales force (quality x quantity) Electronic code recorders (ECR) Automobiles Distribution network Beer Films, home appliances Servicing Elevators Commercial vehicles—e.g., taxis 193 CHAPTER 3: Corporate Appraisal 3-11 BUSINESS UNIT PERFORMANCE A Financial Sales—dollar and/or volume Operating profit before taxes Cash flow Depreciation Sales per employee Profits per employee Investment per employee Return on investment/ sales/assets Assets turnover B Human Resources Use of employee skills Productivity Turnover Ethnic and racial composition C Facilities Rated capacity Capacity utilization Modernization D Inventories Raw materials Finished products Obsolete inventory E Marketing Research and Development expenditures New products Number of salespersons Sales per salesperson Promotion expenditures F International Business Growth rate Geographic coverage G Managerial Performance Leadership capabilities Planning Development of personnel Delegation [...]... microprocessors Sales force (quality x quantity) Electronic code recorders (ECR) Automobiles Distribution network Beer Films, home appliances Servicing Elevators Commercial vehicles—e.g., taxis 1 93 CHAPTER 3: Corporate Appraisal 3- 11 BUSINESS UNIT PERFORMANCE A Financial Sales—dollar and/or volume Operating profit before taxes Cash flow Depreciation Sales per employee Profits per employee Investment per employee...CHAPTER 3: Corporate Appraisal 192 3- 10 KEY SUCCESS FACTORS IN DIFFERENT INDUSTRIES SPECIMEN INDUSTRIES KEY FACTOR OR FUNCTION TO INCREASE PROFIT TO GAIN SHARE Raw materials sourcing Uranium Petroleum Production facilities ... referred to in defining business unit mission CHAPTER 3: Corporate Appraisal 184 3- 2 SCOPE OF CORPORATE APPRAISAL 185 CHAPTER 3: Corporate Appraisal 3- 3 CORPORATE PUBLICS AND THEIR CONCERNS PUBLICS... on-the-job decisions, and job implementation 189 CHAPTER 3: Corporate Appraisal 3- 7 MEASURING VALUE ORIENTATION CHAPTER 3: Corporate Appraisal 190 3- 8 MEANING OF CORPORATE RESOURCES Resources are...1 83 CHAPTER 3: Corporate Appraisal 3- 1 MEANING OF CORPORATE APPRAISAL Corporate appraisal is a measurement of the readiness of the internal