Millenium Business Solution

Posts Tagged ‘organizational structure’

CRM The term comes from the acronym Customer Relationship Management, Customer Relationship Management-Service. According to Lucio Tere (2005) CRM is an approach that allows the organization to focus on the client to interact more effectively with it, identify its importance in the organization and keep him from going to competitors. On the other hand as Ariel CRM Valero (2006) is a business philosophy that arises in understanding and anticipating the requirements of consumers, both existing and potential, so it can be understood as a business strategy focused on the client and their needs.

Having the knowledge of the needs and desires of clients represents a competitive advantage in the market, so companies can maintain a high level in customer loyalty and retention as well as easy to attract new consumers. This can be easily translated into sales. According to studies Kankanhalli, Tan, Kwok-Kee (2005), strategic management of organizational knowledge is a key factor to help the organization maintain a competitive advantage in volatile environments. Technology, specifically Information Technology (IT) can improve CRM processes. As mentioned by Boyle (2004), properly administered, the raw data of customers, may be driven by CRM software and become a cohesive intelligence that can be analyzed to predict trends and returns, find growth opportunities, make key decisions for administration, justify expenditures and other marketing resources.

Implementation of CRM

Lopez and Shaw (2002) suggest that effective implementation of CRM can improve customer relationships, to know them better and reduce the costs and increase the loyalty of existing ones, which in both cases, meaning more sales and more profitability for business. Bradshaw and Brash (2001) argue that CRM applications should not only be functionally integrated in the customer service but also in the functions of the organization such as manufacturing and advertising.

Brown (2001) proposes five elements required for successful implementation of CRM:
a) Strategy. There are 6 types of strategies that affect CRM program: the channel of segmentation, pricing, marketing, the branding and advertising. The first three are the most impact. The strategy of channel determines the medium used to convey the offer to the customer. The segmentation strategy will determine the structure of clients and, consequently, the marketing organization. The pricing strategy is the most important differentiation in a market of generic products and determine more than half the value of the offer.

b) Segmentation. Refers to the classification of customers according to their needs for the determination of marketing activities to ensure the efficient use of segmentation companies must develop the right set of formulas for modeling customer behavior.

c) Technology. CRM functionality depends on the data and information sharing. That’s why creating a single integrated database-oriented logic operations is the key technical considerations.

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Criteria for the identification and definition of business units do not have to match those on the approach to strategy formulation. Being able to stand out as most important the following factors:

• The strategies formulated at the business level, so that the organizational structure, try to adapt to the needs and criteria for strategic planning.
• The existing structure within the company, may be the biggest constraint to define strategic business units. In diversified firms, the traditional divisional structure may be the main point of reference to the point that in many cases identifies the business unit concept of the division or with a group of them.
• The size of the company is another limiting factor so it makes no sense to define strategic business units too small, even with its own strategic sense, as they could not accumulate the resources and functions needed to justify their independent existence. Similarly no sense homogeneous strategic business units but that would be too large and unmanageable from an organizational standpoint.
• The material and human resources shared by different businesses, also affect the construction of business units, as the duplication of those can be extremely costly to the company, so it is necessary to group the shares on the same unit Strategic Business.

As can be seen in this approach to strategy implementation predominate practical criteria linked to the feasibility of implementing a competitive strategy, which is related not only to their form, but with the current organizational structure and with the usual design criteria.

In summary, agrees Ministry of Transport, (2000) that: “The Strategic Business Unit, is a basic tool of strategic management process, with multiple activities. It is a concept that arises as the unit of analysis intermediate between the global and functional level strategy to facilitate the strategic planning of the various activities of a company’s business. “

Strategic Business Units are the main ingredient of the well-known portfolio matrices were so successful in the seventies for strategic planning in diversified companies.

The portfolio, business portfolio folder or a company, usually includes a set of offerings spread over several Strategic Business Units: they are the center of planning for assist in fulfilling the mission of the organization to focus its efforts towards the main strategies.