Executive summary. Delivering Maximum Strategic Value with Market Monitoring, страница 3

In a nutshell, a Market Monitoring System is a process for scanning the competitive environment and for delivering insightful information to decision-makers who work in various positions and functions in the company. It is thus a tool that helps in implementing the current strategy of the company, because strategy defines the competitive environment that needs to be monitored. Furthermore, the relevance of the information that is delivered to decision-makers is determined based on themes and priorities that are dictated by the strategy. The expectation is that the process would identify threats and opportunities within the current strategic focus areas.

Strategy implementation manifests itself in the form of day-to-day operations across various functions. The sales function is trying to generate revenue, so the MAMOS can provide them with leads. The marketing function is trying to generate market share, so the MAMOS can inform them about competitor behavior. The procurement function is trying to secure resources at low costs, so the MAMOS can assist them by monitoring suppliers and market prices. All of these activities are parts of strategy implementation.

An Early Warning and Opportunity System, on the other hand, is a process for scanning an environment that is broader than what the current strategy dictates. It is desirable for the process to identify opportunities that lie outside the current strategic focus areas, and to react to weak signals that entail a high degree of uncertainty. In these respects the process is quite different from a MAMOS. The output of the EWOS is used to identify new strategic alternatives and it helps to eventually formulate new strategies. To achieve this goal, the EWOS is allowed to deliver also provocative or debatable signals that may challenge current preconceptions, which is something that might be considered confusing or wasteful coming from a regular MAMOS. The decision-makers who are receiving information from the EWOS are primarily working in the strategic planning function or the top management of the company.

It is important to emphasize that these two types of monitoring systems are for different purposes and therefore one is not better than the other. Ideally, any company would have both in place. For practical reasons, however, it is easier to set up a MAMOS first and only then to set up an EWOS as well.

4 FUTURE ORIENTATION AND THE TIMING OF

ACTIONS

It is often recognized that in order to provide valuable support for strategic planning and strategy formulation, any system monitoring the business environment should be able to foresee, at least to some degree of accuracy, future developments. But future orientation is not only desirable for strategy formulation. Strategy implementation benefits just as much from information that is prognostic.

Future orientation and timing is a critical feature of any type of market monitoring system. There is a difference, however, in the attitudes towards uncertainty, depending on whether the system is supporting strategy implementation or strategy formulation. A typical characteristic of market monitoring systems for strategy implementation is the desire to reduce uncertainty. In fact, often one of the key reasons the system is set up is to remove unknowns and to turn them into knowns. For the purposes of strategy formulation, however, this kind of attentiveness to certainty may lead to blind spots. Instead, it might actually be more desirable to explore unknowns instead of knowns and to allow for a high degree of uncertainty. While a MAMOS attempts to inform the decision-makers about what will happen and what it will mean, an EWOS is designed to tell the decision-maker what might happen and what it might mean.