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How to Profit with a Market-Focused Approach

The most profitable companies are the ones which fully understand their markets and their competitors. According to the CEO Refresher, there are six ways to deliver customer value by becoming more market-focused:
  1. Develop a sense of purpose around creating superior customer value and communicating this purpose to your entire organization. This approach also requires you to reward and encourage your employees to think in such ways.

  2. Understand your customers better than they even understand themselves. Do this by conducting market research on what these customers want and need, either expressed or unexpressed, and by distilling and disseminating this research throughout your organization.

  3. Understand the short- and long-term strengths, weaknesses and capabilities of your current and potential competitors. To do this, the authors state that you need to distill your competitors' strategies and tactics into meaningful evaluations.

    What this means is that you must assess their capabilities within the competitive environment, and then determine how this will impact the competitiveness of your own organization. As with the previous step, you again share your findings with your organization.

  4. Use a collaborative approach to develop and evaluate new products and services to meet the needs of your customers. Two recommended ways of doing this are by internal cross-functional training and by external "value-creation" partnerships with suppliers or channel partners. The goal here is to be profitable in creating customer value via collaborative methods such as these.

  5. Develop your decision-making to focus on the long-term relationships you will be building with your customers. To do this, you must establish clear criteria for emphasizing the long-term, profit-oriented decision making. The article gives a great example with Toyota's shift in the early-1980s in wanting to be number one in market share to number one in satisfaction. The results for the company - in both categories - have been tremendous.

  6. Finally, there must be strong leadership from the top. The CEO must develop a shared vision of strengthening the company's market culture that demonstrates commitment and involvement right from the top. This is demonstrated by the actions and behaviour of the CEO, and from how the organization rewards employees who share in the vision.
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