WHY STRATEGIC MARKET MANAGEMENT?

Strategic market management is often frustrating because the environment is so difficult to understand and predict. The communication and choices required within the organization can create strain and internal resistance. The most valuable organizational resource, management time, is absorbed. The alternative of simply waiting for and reacting to exceptional opportunities often seems efficient and adequate.

Despite these costs and problems, however, strategic market management has the potential to

* Precipitate the consideration of strategic choices. What is happening externally that is creating opportunities and threats to which a timely and appropriate reaction should be generated? What strategic issues face the firm?

What strategic options should be considered? The alternative to strategic market management is usually to drift strategically, becoming absorbed in day-to-day problems. Nothing is more tragic than an organization that fails because a strategic decision was not addressed until it was too late.

* Force a long-range view. The pressures to manage with a short-term focus are strong and frequently lead to strategic errors.

* Make visible the resource allocation decision. Allowing allocation of resources to be dictated by the accounting system, political strengths, or inertia (the same as last year) is too easy. One result of this approach is that the small but promising business with "no problems" or the unborn business may suffer from a lack of resources, whereas the larger business areas with "problems" may absorb an excessive amount.

* Aid strategic analysis and decision making. Concepts, models, and methodologies are available to help a business collect and analyze information and address difficult strategic decisions.

* Provide a strategic management and control system. The focus on assets and competencies and the development of objectives and programs associated with strategic thrusts provide the basis for managing a business strategically.

* Provide both horizontal and vertical communication and coordination systems. Strategic market management provides a way to communicate problems and proposed strategies within an organization; in particular, its vocabulary adds precision.

* Help a business cope with change. If a particular environment is extremely stable and the sales patterns are satisfactory, there may be little need for meaningful strategic change—either in direction or intensity. In that case, strategic market management is much less crucial. However, most organizations now exist in rapidly changing and increasingly unpredictable environments and therefore need approaches for coping strategically.
    George Yip studied strategy development in 13 firms and concluded that strategic market management approaches have particular value for businesses that:

* Need multinational strategies; one marketing-oriented firm used them to provide a strategic role for functions other than marketing.

* Need to achieve synergy among multiple markets.

* Need to coordinate the strategies of multiple brands.
* Are involved in complex markets where multiple or layered channels, regional variations, or multiple elements of the marketing mix are involved.