In times of market turmoil and uncertainty, organizations take measures aimed at helping the company withstand the changes and stay competitive in the market. Some of these measures include reducing commodity price, outsourcing, and layoffs. However, in as much as these measures keep the company in business, some measures taken prove to be mistakes that would hurt the organization contrary to the motive behind their implementation.
For starters, layoffs may come in handy for an organization experiencing financial difficulties. However, laying off the lower level support staff is a miscalculation that does not help the company. Lower level staff are the driving power in an organization as they partake in-office duties while executives market the company to customers. Laying off these significant staff confines the executives to the office whereas they could be striking deals in the marketplace. Secondly, organizations use past successful strategies to tackle current problems. The strategies may not be effective since the market changes are new and need different strategies. Conversely, some organization despises past ideas that did not work but could work effectually if applied. Another mistake is reducing the price rather than adding value to a product.
Even though reducing prices increases sales, adding the value of a product gives a competitive advantage as opposed to increased sales as is what most company targets. Mistake five that businesses do is holding on to sources that do not yield for the notion that they give the company a higher status. These sacred cows increase the fixed cost obligation and force capital outlay leading to losses. Another mistake that businesses make is relying on a dominant customer. The bug customers may decide to opt out and would lead to serious losses. Moreover, the dominant customers may impose oppressive measures including low prices that work against the success of the company.
For a company to stay successful and ahead of the competition in the market, the management should avoid the mistakes discussed above at all costs. More so, there some recommendations on the measures that companies should take to increases tr market share in times of market turmoil. Companies should invest in a wide variety of customers as opposed to one customer representing a big percentage of their market share. In the extensive works of Hajmohammad & Vachon, adapting low perceived risk buyer as opposed to the dominant context buying aids in eliminating sustainability risk (2016). Companies should also invest in adding the value of a product through processes such as fast delivery, higher quality products, educating customers on how to use a product, improve the customer service, and product improvement through the use of focus groups.
(Chong, Ch'ng, Liu & Li, 2017) indicates that promotional marketing creates product differentiation and an increase in sales. However, Ascarza et al., argue that enhancing product value aids in customer retention and increases financial welfare and market share through satisfying high-value customers (2018). Assessing ideas to ascertain the ones that effectively work in different times and market segments. During personnel layoffs, maintaining the low-level staff is a critical consideration as it would allow executives more time to market the company's commodities to prospect customers. According to Lopez Bohle, Bal, Jansen, Leiva & Alonso (2017), during massive layoffs surviving employees may respond to excessive workload by putting fewer efforts in their duties.
Ascarza, E., Neslin, S. A., Netzer, O., Anderson, Z., Fader, P. S., Gupta, S., ... & Provost, F. (2018). In Pursuit of Enhanced Customer Retention Management: Review, Key Issues, and Future Directions. Customer Needs and Solutions, 5(1-2), 65-81.
Chong, A. Y. L., Ch'ng, E., Liu, M. J., & Li, B. (2017). Predicting consumer product demands via Big Data: the roles of online promotional marketing and online reviews. International Journal of Production Research, 55(17), 5142-5156.
Hajmohammad, S., & Vachon, S. (2016). Mitigation, avoidance, or acceptance? Managing supplier sustainability risk. Journal of Supply Chain Management, 52(2), 48-65.
Lopez Bohle, S., Bal, P. M., Jansen, P. G., Leiva, P. I., & Alonso, A. M. (2017). How mass layoffs are related to lower job performance and OCB among surviving employees in Chile: an investigation of the essential role of psychological contract. The International Journal of Human Resource Management, 28(20), 2837-2860.
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