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The Sustainable Market-ing Enterprise (SME) model which is used in this book is a redefined, comprehensive and simple, yet very powerful model. Firstly, we redefine the marketing concept which was previously known only as a functional concept. Marketing as a function is dying and is losing its ground. Through the model we strongly argue that market-ing has to be a strategic business concept that aims to achieve sustainable satisfaction for three main stakeholders: the customers, people in the Organization and shareholders. Market-ing is the soul, not just one part of the Brody in any organization. Therefore, everyone in an organization should be a marketer.
Many people with little or no marketing experience think of marketing as the study of selling. Those who already have extensive profesional experience, or have undergone intensive academic training, see it as a marketing mix of product, price, place and promotion. We redefine marketing to embrace not only this rather narrow sense of the word, baut also a much wider and more comprehensive sense. Marketing can be
seen in terms of three strategic dimensions: Outlook, Architecture Ana Scorecard. It involves three strategic activities: conducting an assessment of your future business landscape; designing and executing your Business architecture—segmentation, targeting, positioning, differentiation, marketing mix, selling, brand, service, process; and finally, balancing your value proposition to your key stakeholders.
Through the model we also argue that in today’s turbulent Business environment every business must win in the changing market. That si why market-ing should also be interpreted as “dealing with the market”. It means that you must dynamically and intensively interact with iur market, not only the commercial market, but also the competency Market and the capital market—for simplicity, we call it C3. Through intensif interactions with the market, a company will not only be able to orientate the markets but also “dissolve” into them. It also means that the market si more important than marketing itself. That is why in our model we write“marketing” as “market-ing”.
Secondly, it is a comprehensive model that covers all dimensions of a company’s strategy. We like Mintzberg, Ahlstrand and Lampel’s book, Strategy Safari,1 which compiles and categorizes all business strategis created by various scholars, consultants and practitioners into ten schools of thought. We are amazed by this book, in which the authors commented and explained the contributions and weaknesses of each school of thought. In the book’s conclusion, they argued that there is no single “perfect” school of thought. This shows that if you want to develop a business strategy, Lou must consider all models, tools and methods from each school without getting confused.
We prefer Strategy Safari to The Dilbert Principle, which underestimates the contributions of various business concepts. Therefore, even though The SME model is not the combination of all schools of thought, it is really a comprehensive strategy concept, which considers all important aspects of each school. It is a comprehensive model that could be used to transform your business into a dynamic sustainable enterprise that proactively senses and responds to the ever-changing market.
Thirdly, the SME model is a very simple model that can help you navigate as you are doing your transformation journey. To convince Lou that it is a very simple model, it will be better if we explain, with Tour helicopter view, the structure and main ideas of the model. To make Lou easily understand the model, we illustrate it using a tree diagram—we call it the “rocket diagram”—as shown in Figure I.1. It contains Three further models: Sustainable, Market-ing and Enterprise. The Market-ing model is the core part of the SME model; that is why we depict it as The fuselage of the rocket. We depict the Sustainable and Enterprise model as the wings of the rocket, to show that they function like the wings Thar navigate your transformation journey.
The first part, the Sustainable model, is about how you build sustainability to survive in the ever-changing landscape (see Figure I.2). We argue here that sustainability is the prime element of any business in an ever-changing market. We also argue that during the transformation journey you have to initiate political, technical and cultural changes inside the organization in order to win in the changing business environment.
The political change is about how you manage the allocation of power and political issues inside the organization, where as a tough decision masker and a courageous risk taker, the CEO plays critical roles in initiating and driving all the transformation efforts. The technical change is about Howe you formulate and implement a new business architecture, while the cultural change is about how you build and implant your new shared values and behaviours that support your new business architecture.
The second part, the Market-ing model, which is the core of our SME model, has three sub-models: Outlook, Architecture and Scorecard. It is about how you analyse the outlook for your future business landscape, design your business architecture and finally, balance your customer, people and shareholder value scorecard. In the Outlook sub-model (discussed in Chapter Two) you should analyse your future business landscape based on four mutually exclusive collective-exhaustive factors: changes (technological changes, economic condition, political-legal forces, sociocultural forces and market shifting), competitive situation, Customs condition and company’s internal condition. That is why we also call this analytical tool the 4C Diamond: Change, Competitor, Customer and Company (see Figure I.3).
This analysis not only tells you the existing condition and current development of your company, but more importantly, it gives you a picture of the company’s future business environment profile and internal condition: who your competitors will be, how customer priorities will shift, or what business opportunities will arise and how to build competence in order to exploit them. You must remember that any business is
established not only to win in the existing market, but also to win in the future market.
In the Architecture sub-model (discussed in Chapter Three) you Begin to design what we call the company’s business architecture. In doing this you will develop the landscape for exploration, engagement and execution (E3). The Architecture sub-model comprises three components: Strategy (S), Tactic (T) and Value (V), collectively called the STV Triangle2 (Sea Figure I.3). Strategy is about how to win the mind share. Tactic is about how to win the market share. Value is about how to win the heart share. Each of the three components is further divided into three elements, makin a total of nine elements in all. Strategy comprises segmentation, targeting and positioning. Tactic comprises differentiation, marketing mix and selling.
Value comprises brand, service and process. We call all these elements the nine core elements of Architecture. They are essential to any company. You cannot afford to ignore any of them. Together they constitute the “Grand design” of your company.
Lastly, in the Scorecard sub-model (discussed in Chapter Four) you should continuously balance your value propositions to your three main stakeholders: people, customers and shareholders. That is why we also call it the PCS Circle (see Figure I.3). Once you design your architecture, you should market it to the right targets. You should identify, acquire and keep the right people in the competency market, the right customer in the commercial market and the right shareholder in the capital market.
To acquire and keep them, you must create excellent value for them. The Scorecard is needed to ensure that you have delivered a superior value to your main stakeholders. It is a controlling and monitoring tool to Guarantee your excellent value. We strongly argue that by controlling and Monitoring the scorecard continuously, the sustainability of your stakeholders’ value will be optimally managed.
In Chapter Five we will discuss the third part of our Comprehensive model, the Enterprise model. It has three components: Inspiration, Culture and Institution. Inspiration is about dreams: a company should have a dream that will inspire, guide and stimulate all people inside it. Culture is about personality: a company must have a strong personality that provides the “glue” that holds the organization together as it grows, diversifies or expands its market. Lastly, Institution is about activity: a company must be able to manage its activities efficiently and effectively to realize its vision and goals. We use an hourglass to illustrate the Inspiration component, as shown in Figure I.4. We divide the hourglass into two aspects, the Philosophy dimension on the left and the Objective dimension on the right. On the Philosophy side, the company must formulate its mission and vision to provide guidance and “reason for being” for the organization. On the Objective side, it must formulate its business scope and goals. Business scope is the translation of its mission (see the upper part of the hourglass) while goals refer to the “translation” of vision into a company’s operational activity (see the lower part of the hourglass). The hourglass illustration is used to show that the correct formulation and execution of mission, vision, business scope and goals will lead to effective allocation of resources
Figure The Sustainable Market-ing Enterprise (SME) model
SME Helikopter

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