Market Penetration and Management Function

Functional areas that must be discussed in the implementation and control sections of your cases and the duties of each department.

This information was taken from Chapter 4 of the David textbook posted online, except the last two sections which are referenced from their source in each section.

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Do NOT copy and paste these in your case!! They are your guide to what each functional areas’s duties are, your job is to tell how these duties are used to implement the strategy using each functional area.. i.e.: Market Penetration

Management is always used first in your implementation section because that is where you lay out the plan of action for the entire strategy and give brief directions to the other functional areas so you will follow through with it in the other functional areas.

Management Function


Planning consists of all those managerial activities related to preparing for the future. Specific tasks include forecasting, establishing objectives, devising strategies, developing policies, and setting goals. Strategy Formulation


Organizing includes all those managerial activities that result in a structure of task and authority relationships. Specific areas include organizational design, job specialization, job descriptions, job specifications, span of control, unity of command, coordination, job design, and job analysis. Strategy Implementation


Motivating involves efforts directed toward shaping human behavior. Specific topics include leadership, communication, work groups, behavior modification, delegation of authority, job enrichment, job satisfaction, needs fulfillment, organizational change, employee morale, and managerial morale. Strategy Implementation

Staffing (mention that it is discussed in a separate HRM section)

Staffing activities are centered on personnel or human resource management. Included are wage and salary administration, employee benefits, interviewing, hiring, firing, training, management development, employee safety, affirmative action, equal employment opportunity, union relations, career development, personnel research, discipline policies, grievance procedures, and public relations. Strategy Implementation


Controlling refers to all those managerial activities directed toward ensuring that actual results are consistent with planned results. Key areas of concern include quality control, financial control, sales control, inventory control, expense control, analysis of variances, rewards, and sanctions. Strategy Evaluation

Marketing Duties

Customer Analysis Customer analysis—the examination and evaluation of consumer needs, desires, and wants—involves administering customer surveys, analyzing consumer information, evaluating market positioning strategies, developing customer profiles, and determining optimal market segmentation strategies. The information generated by customer analysis can be essential in developing an effective mission statement. Customer profiles can reveal the demographic characteristics of an organization’s customers. Buyers, sellers, distributors, salespeople, managers, wholesalers, retailers, suppliers, and creditors can all participate in gathering information to successfully identify customers’ needs and wants. Successful organizations continually monitor present and potential customers’ buying patterns.

Selling Products/Services Successful strategy implementation generally rests upon the ability of an organization to sell some product or service. Selling includes many marketing activities, such as advertising, sales promotion, publicity, personal selling, sales force management, customer relations, and dealer relations. These activities are especially critical when a firm pursues a market penetration strategy. The effectiveness of various selling tools for consumer and industrial products varies. Personal selling is most important for industrial goods companies, and advertising is most important for consumer goods companies. Determining organizational strengths and weaknesses in the selling function of marketing is an important part of performing an internal strategic-management audit.

Product and Service Planning Product and service planning includes activities such as test marketing; product and brand positioning; devising warranties; packaging; determining product options, features, style, and quality; deleting old products; and providing for customer service. Product and service planning is particularly important when a company is pursuing product development or diversification. One of the most effective product and service planning techniques is test marketing. Test markets allow an organization to test alternative marketing plans and to forecast future sales of new products. In conducting a test market project, an organization must decide how many cities to include, which cities to include, how long to run the test, what information to collect during the test, and what action to take after the test has been completed.

Pricing Five major stakeholders affect pricing decisions: consumers, governments, suppliers, distributors, and competitors. Governments can impose constraints on price fixing, price discrimination, minimum prices, unit pricing, price advertising, and price controls. Strategists should view price from both a short-run and a long-run perspective, because competitors can copy price changes with relative ease. Often a dominant firm will aggressively match all price cuts by competitors.

Distribution Distribution includes warehousing, distribution channels, distribution coverage, retail site locations, sales territories, inventory levels and location, transportation carriers, wholesaling, and retailing. Most producers today do not sell their goods directly to consumers. Various marketing entities act as intermediaries; they bear a variety of names such as wholesalers, retailers, brokers, facilitators, agents, vendors—or simply distributors. Some of the most complex and challenging decisions facing a firm concern product distribution. Intermediaries flourish in our economy because many producers lack the financial resources and expertise to carry out direct marketing. Strengths and weaknesses of each channel alternative should be determined according to economic, control, and adaptive criteria.

Marketing Research Marketing research is the systematic gathering, recording, and analyzing of data about problems relating to the marketing of goods and services. Marketing research can uncover critical strengths and weaknesses, and marketing researchers employ numerous scales, instruments, procedures, concepts, and techniques to gather information. Marketing research activities support all of the major business functions of an organization.

Cost/Benefit Analysis The seventh function of marketing is cost/benefit analysis, which involves assessing the costs, benefits, and risks associated with marketing decisions. Three steps are required to perform a cost/benefit analysis: (1) compute the total costs associated with a decision, (2) estimate the total benefits from the decision, and (3) compare the total costs with the total benefits. When expected benefits exceed total costs, an opportunity becomes more attractive. Sometimes the variables included in a cost/benefit analysis cannot be quantified or even measured, but usually reasonable estimates can be made to allow the analysis to be performed. One key factor to be considered is risk. Cost/benefit analysis should also be performed when a company is evaluating alternative ways to be socially responsible.

Finance/Accounting duties

finance/accounting comprise three decisions: the investment decision, the financing decision, and the dividend decision.20 Financial ratio analysis is the most widely used method for determining an organization’s strengths and weaknesses in the investment, financing, and dividend areas.

Because the functional areas of business are so closely related, financial ratios can signal strengths or weaknesses in management, marketing, production, research and development, and management information systems activities.

The investment decision, also called capital budgeting, is the allocation and reallocation of capital and resources to projects, products, assets, and divisions of an organization. Once strategies are formulated, capital budgeting decisions are required to successfully implement strategies.

The financing decision determines the best capital structure for the firm and includes examining various methods by which the firm can raise capital (for example, by issuing stock, increasing debt, selling assets, or using a combination of these approaches). The financing decision must consider both short-term and long-term needs for working capital. Two key financial ratios that indicate whether a firm’s financing decisions have been effective are the debt-to-equity ratio and the debt-to-total-assets ratio.

Dividend decisions concern issues such as the percentage of earnings paid to stockholders, the stability of dividends paid over time, and the repurchase or issuance of stock. Dividend decisions determine the amount of funds that are retained in a firm compared to the amount paid out to stockholders. Three financial ratios that are helpful in evaluating a firm’s dividend decisions are the earnings-per-share ratio, the dividends-per-share ratio, and the price-earnings ratio. The benefits of paying dividends to investors must be balanced against the benefits of internally retaining funds, and there is no set formula on how to balance this trade-off.

Production/Operations duties

TABLE 4-7 The Basic Functions (Decisions) Within Production/Operations Decision Areas Example Decisions

1. Process These decisions include choice of technology, facility layout, process flow analysis, facility location, line balancing, process control, and transportation analysis. Distances from raw materials to production sites to customers are a major consideration.

2. Capacity These decisions include forecasting, facilities planning, aggregate planning, scheduling, capacity planning, and queuing analysis. Capacity utilization is a major consideration.

3. Inventory These decisions involve managing the level of raw materials, work-in-process, and finished goods, especially considering what to order, when to order, how much to order, and materials handling.

4. Workforce These decisions involve managing the skilled, unskilled, clerical, and managerial employees by caring for job design, work measurement, job enrichment, work standards, and motivation techniques.

5. Quality These decisions are aimed at ensuring that high-quality goods and services are produced by caring for quality control, sampling, testing, quality assurance, and cost control.

Research and Development duties

(For manufacturing companies, not service companies. Major restaurants may have a test kitchen as a form of R&D.)

R&D in organizations can take two basic forms: (1) internal R&D, in which an organization operates its own R&D department, and/or (2) contract R&D, in which a firm hires independent researchers or independent agencies to develop specific products. Many companies use both approaches to develop new products. A widely used approach for obtaining outside R&D assistance is to pursue a joint venture with another firm. R&D strengths (capabilities) and weaknesses (limitations) play a major role in strategy formulation and strategy implementation.

Firms pursuing a product development strategy especially need to have a strong R&D orientation. Organizations invest in R&D because they believe that such an investment will lead to a superior product or service and will give them competitive advantages. Research and development expenditures are directed at developing new products before competitors do, at improving product quality, or at improving manufacturing processes to reduce costs. Effective management of the R&D function requires a strategic and operational partnership between R&D and the other vital business functions. The overall mission of R&D thus has become broad-based, including supporting existing businesses, helping launch new businesses, developing new products, improving product quality, improving manufacturing efficiency, and deepening or broadening the company’s technological capabilities.

Management Information Systems

read the information in the control chapter posted on line.. the last two pages have a lot of information on MIS problems faced today with hackers and such. Also read the pages in the David book posted online about this functional area pages 117-119.

Audit Questions such as the following should be asked when conducting this audit:

1. Do all managers in the firm use the information system to make decisions?

2. Is there a chief information officer or director of information systems position in the firm?

3. Are data in the information system updated regularly?

4. Do managers from all functional areas of the firm contribute input to the information system?

5. Are there effective passwords for entry into the firm’s information system?

6. Are strategists of the firm familiar with the information systems of rival firms?

7. Is the information system user-friendly?

8. Do all users of the information system understand the competitive advantages that information can provide firms?

9. Are computer training workshops provided for users of the information system?

10. Is the firm’s information system continually being improved in content and user-friendliness?

11. Does the MIS department have 24/7 protection against hackers, viruses, malware, etc???

Legal (

Law department is responsible for providing legal services and advice to the company, its divisions and employees. The department office faces a great number of different legal matters. These matters include: business development, contract management, real estate transactions, customer claims against the company for product damages and defects, litigation, employment law, sales and leases matters, debt collection, bankruptcy, case prosecution, and much more. All these activities create the workflow of Legal department. If to look at the workflow in whole, the following main functions of the legal department can seen:

  • Providing legal advice and guidance
  • Prosecution of cases in courts and litigation management
  • Documentation preparation and drafting

Let’s briefly consider each of these functions.

1. Providing legal advice and guidance

This is a core function of Legal department. During the company’s everyday life, there are a lot of legal issues which require qualified advice from Lawyers and Legal Advisors. This is about giving advice for resolving such issues as sales, purchasing, customer support, partnership, licensing, and other. The implementation of the function is based on the following activities the department concerns:

  • Giving advice to the company, its divisions and employees on matters of law and legal protection
  • Keeping company activities in strict compliance with new legislation
  • Representing company in all meetings, conferences and public events

2. Prosecution of cases in courts and litigation management

Legal department represents and defends the company interests and its employees in courts and government bodies. The department initiates litigation in case of court examinations, and the legal staff members are responsible for creating and enforcing ordinances and gathering existing claims in favor of the company. This function is fulfilled by the following activities:

  • Preparation of protocols, claims and counter-claims to courts
  • Representation of company in courts
  • Protection of company’s rights and interests in judicial sittings

3. Documentation preparation and drafting

This function concerns legal part of document management. Law department is responsible for drafting documents in forms which do not contradict or infringe existing legislation, both local and international (if company conducts oversees activities). The fulfillment of this function is based upon the following activities:

  • Creation of legal documentation requirements
  • Drafting and approving document layouts
  • Complying documentation with existing local/international agreements and legislation

Human Resources Management


The human resources department handles a range of different functions within an organization. The department is responsible for hiring and firing employees, training workers, maintaining interoffice relationships and interpreting employment laws. The department works diligently behind the scenes to ensure an organization runs efficiently. The HR department’s duties will vary between companies, but can generally be summed up in six main functions.

Hiring and Recruiting

One of the primary functions of the human resources department is to oversee hiring and recruiting within an organization. The department actively recruits, screens, interviews and hires qualified candidates for open positions. The department administers skills assessment and personality tests to match candidates with the right job within the company. The human resources department also develops employee handbooks that explain company policies and procedures to new hires.

Training and Development

The human resources department handles the training and development of staff within an organization. It creates training programs and conducts training for new hires and existing employees. The human resources department also works in conjunction with department managers and supervisors to determine the training needs of employees. They are also responsible for contracts with training providers and monitoring training budgets.

Handling Compensation

The human resources department is responsible for various aspects of employee compensation. The department typically handles employee payroll and ensures employees are paid accurately and on time, with the correct deductions made. Human resources departments also manage compensation programs that include pensions and other fringe benefits offered by the employer.

Employee Benefits

The human resources department manages all aspects of employee benefits, including health and dental insurance, long-term care or disability programs as well as employee assistance and wellness programs. The department keeps track of employee absences and job-protected leave, such as family medical leave. Human resources department representatives ensure employees receive the proper disclosures regarding benefit eligibility or if benefits are no longer available because of a layoff or termination.

Employee Relations

The human resources department handles employee relations matters within an organization. Employee relations involves employee participation in different aspects of organizational activities. The department maintains the relationship between employees and management by promoting communication and fairness within the company. The department also handles disputes between employees and management, as well as disputes between the company and labor unions or employee rights organizations.

Legal Responsibilities

The human resources department is responsible for interpreting and enforcing employment and labor laws such as equal employment opportunity, fair labor standards, benefits and wages, and work hour requirements. The department also investigates harassment and discrimination complaints and ensures company officials remain compliant with United States Department of Labor regulations.

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