3i Group plc is a multinational investment company, dealing in private equity and infrastructure across Northern Europe and North America's investment markets. The history of 3i Investment Company dates back to 1945 when the Bank of England and other major British banks formed the Industrial and Commerce Finance Corporation (ICFC) to provide investment funding for small and medium-sized companies on a long-term basis (Hardymon & Leamon, 2006). The inaccessibility of long-term loans to small businesses by British banks in the 1930s was the major driving force in the establishment of ICFC. By the 1950s and 1960s, ICFC had expanded to become UK's largest financier for unquoted companies. The growth pattern for the company continued with the 1973 acquisition of Finance Corporation for Industry Company and its renaming of the resulting merger to Finance for Industry (FFI). In 1987, 3i became a public limited company and was renamed 3i Group Plc after banks sold off their stakes (Hardymon & Leamon, 2006). In 1994, the company was listed in the London Stock Exchange and has experienced significant growth in propriety capital value and asset value ever since. However, 3i has experienced notable highs and lows over the years and the paper sets to discuss how the company will maximize its effectiveness in the market by balancing sector, geography, business line, and function. Moreover, there will be a vivid discussion of the effectiveness of the balance to its future success.
3i Group plc will maximize its effectiveness in the market by evolving from a geographic organization to a market/customer based organization. Under the customer based organization model, business units with full profit and loss responsibility get organized around major customer groupings, accounts, or brands earmarked at a specific customer segment (Bucolo & Matthews, 2011). Since customer satisfaction is key to business success, the model ensures this eventuality by creating opportunities for the identification of customer needs and the development of required high-quality products. Moreover, the model ensures the development of distinctive expertise within the company in line with customer needs. This is appropriate for 3i since the company's previous strategic initiative along the geographic model has been successful and the benefits associated with the model have now been exploited. Thus, the company needs to move towards a market based organizational model to continue improving beyond their current level.
3i Company has been reviewing its strategic plans after every 2 years, a process then CEO, Mr. Philip Yea, believed worked for them (Hardymon & Leamon, 2006). After the two years, the company reviews the market to see whether it would need to tweak the strategic plans. Mr. Yea believed that the frequent strategic review would enable them to make numerous and appropriate minor changes rather than make occasional and traumatic changes. Other notable ways needed to maximize 3i's effectiveness include sharing best practices among the business divisions and developing information systems useful in gathering and analyzing market data. From the case study, 3i has already begun the process but more needs to be done to achieve maximum effectiveness. The realization of balance is critical for future business success since the stiff competition brought about by rival firms could affect its profits and share value significantly. From the case study, it emerges that 3i's returns were good but had not completely outperformed those of other quoted companies meaning that the company needs to do more to guarantee its future success.
Hardymon, G. F., & Leamon, A. (2006, September 19). 3i Group plc: May 2006. Retrieved from Harvard Business Review: https://hbr.org/product/3i-group-plc-may-2006/807006-PDF-ENG
Bucolo, S., & Matthews, J. H. (2011). A conceptual model to link deep customer insights to both growth opportunities and organisational strategy in SME's as part of a design led transformation journey. Design management toward a new Era of innovation.
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