The role of CRM within corporate strategy
A general analysis
©2004
Bachelorarbeit
80 Seiten
Zusammenfassung
Inhaltsangabe:Abstract:
Doing business is easy. Doing business successfully is difficult. Doing business successfully in the long run is a real challenge to management and employees.
Companies are driven by the pursuit for growth, and profitability. The increasing globalization process is creating fierce competition. The need for a clear strategy, a guideline is essential to succeed permanently. This means to shift the concentration from short term objectives to long term ones, based on the main determents of success the customer.
The purpose is to find out whether companies are putting strategic emphasis on Customer Relationship Management (CRM), that is, if companies perceive CRM as an important part of their strategy in general or if CRM is an unused tool and is given less intention.
Two parts a theoretical and an empirical one are the main components of this thesis. The theoretical part covers three important issues strategy, CRM and the combined view on both single parts. The empirical study is based on a quantitative method a questionnaire containing 10 general questions regarding CRM and strategy which includes the response of 106 companies mainly from Sweden and Germany.
Stating to be customer oriented is only one thing of the medal. To obtain and to maintain customer focus when doing business is far more difficult. It demands understanding of the complexity, commitment, expertise and time. Obstacles derive from a false interpretation of what customer-led means, from reluctance to change, a lack of communication, and eagerness. Without having a strategy it is nearly impossible to be accomplished. The successful alignment of CRM components and other strategic issues to one viable corporate strategy is essential for future success. This includes constant innovation, foresight, and freedom of mind and thoughts.
Inhaltsverzeichnis:Table of Contents:
Abstract2
Introduction2
Purpose2
Method2
Analysis and conclusions3
Table of Content4
Table of figures and tables6
1.Introduction7
1.1Background7
1.2Problem discussion8
1.3Purpose9
1.4Limitations9
1.5Disposition9
2.Methodology11
2.1Scientific approach11
2.1.1Induction11
2.1.2Deduction11
2.1.3Our approach11
2.2Research method11
2.2.1Qualitative12
2.2.2Quantitative12
2.2.3Our method12
2.3Method for collecting data13
2.3.1Secondary data13
2.3.2Primary data15
2.3.3Our data collection15
2.4The […]
Doing business is easy. Doing business successfully is difficult. Doing business successfully in the long run is a real challenge to management and employees.
Companies are driven by the pursuit for growth, and profitability. The increasing globalization process is creating fierce competition. The need for a clear strategy, a guideline is essential to succeed permanently. This means to shift the concentration from short term objectives to long term ones, based on the main determents of success the customer.
The purpose is to find out whether companies are putting strategic emphasis on Customer Relationship Management (CRM), that is, if companies perceive CRM as an important part of their strategy in general or if CRM is an unused tool and is given less intention.
Two parts a theoretical and an empirical one are the main components of this thesis. The theoretical part covers three important issues strategy, CRM and the combined view on both single parts. The empirical study is based on a quantitative method a questionnaire containing 10 general questions regarding CRM and strategy which includes the response of 106 companies mainly from Sweden and Germany.
Stating to be customer oriented is only one thing of the medal. To obtain and to maintain customer focus when doing business is far more difficult. It demands understanding of the complexity, commitment, expertise and time. Obstacles derive from a false interpretation of what customer-led means, from reluctance to change, a lack of communication, and eagerness. Without having a strategy it is nearly impossible to be accomplished. The successful alignment of CRM components and other strategic issues to one viable corporate strategy is essential for future success. This includes constant innovation, foresight, and freedom of mind and thoughts.
Inhaltsverzeichnis:Table of Contents:
Abstract2
Introduction2
Purpose2
Method2
Analysis and conclusions3
Table of Content4
Table of figures and tables6
1.Introduction7
1.1Background7
1.2Problem discussion8
1.3Purpose9
1.4Limitations9
1.5Disposition9
2.Methodology11
2.1Scientific approach11
2.1.1Induction11
2.1.2Deduction11
2.1.3Our approach11
2.2Research method11
2.2.1Qualitative12
2.2.2Quantitative12
2.2.3Our method12
2.3Method for collecting data13
2.3.1Secondary data13
2.3.2Primary data15
2.3.3Our data collection15
2.4The […]
Leseprobe
Inhaltsverzeichnis
ID 4066
Pfeiffenbrück, Jörg: The role of CRM within corporate Strategy - a general analysis
Hamburg: Diplomica GmbH, 2005
Zugl.: Högskolan i Halmstad (Halmstad University), Bachelorarbeit, 2004
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2
Bachelor's Thesis in Business Administration
Title:
"The role of CRM within corporate strategy " A general analysis
Author: Jens
Neuschl
Jörg
Pfeiffenbrück
Tutor:
Karl-Gustav
Svanström
Date
2004-05-27
Subject terms:
CRM, customer orientation, relationship, strategy
Abstract
Introduction
Doing business is easy. Doing business successfully is difficult. Doing business successfully
in the long run is a real challenge to management and employees.
Companies are driven by the pursuit for growth, and profitability. The increasing
globalization process is creating fierce competition. The need for a clear strategy, a guideline
is essential to succeed permanently. This means to shift the concentration from short term
objectives to long term ones, based on the main determents of success the customer.
Purpose
The purpose is to find out whether companies are putting strategic emphasis on Customer
Relationship Management (CRM), that is, if companies perceive CRM as an important part of
their strategy in general or if CRM is an unused tool and is given less intention.
Method
Two parts a theoretical and an empirical one are the main components of this thesis. The
theoretical part covers three important issues strategy, CRM and the combined view on both
single parts. The empirical study is based on a quantitative method a questionnaire
containing 10 general questions regarding CRM and strategy which includes the response of
106 companies mainly from Sweden and Germany.
Analysis and conclusions
Stating to be customer oriented is only one thing of the medal. To obtain and to maintain
customer focus when doing business is far more difficult. It demands understanding of the
complexity, commitment, expertise and time. Obstacles derive from a false interpretation of
what customer-led means, from reluctance to change, a lack of communication, and
3
eagerness. Without having a strategy it is nearly impossible to be accomplished. The
successful alignment of CRM components and other strategic issues to one viable corporate
strategy is essential for future success. This includes constant innovation, foresight, and
freedom of mind and thoughts.
4
Table of Content
Abstract ... 2
Introduction ... 2
Purpose ... 2
Method... 2
Analysis and conclusions... 2
Table of Content ... 4
Table of figures and tables... 6
1 Introduction ... 7
1.1 Background ... 7
1.2 Problem discussion... 8
1.3 Purpose... 9
1.4 Limitations... 9
1.5 Disposition ... 9
2 Methodology ... 11
2.1 Scientific approach... 11
2.1.1 Induction... 11
2.1.2. Deduction ... 11
2.1.3. Our approach ... 11
2.2 Research method... 11
2.2.1 Qualitative ... 12
2.2.2 Quantitative ... 12
2.2.3 Our method... 12
2.3 Method for collecting data ... 13
2.3.1 Secondary data... 13
2.3.2 Primary data... 15
2.3.3 Our data collection... 15
2.4 The questionnaire... 15
2.4.1 Requirements... 15
2.4.2 Structure ... 16
2.5 Measurement ... 17
2.5.1 Validity... 17
2.5.1.1 Internal validity
... 17
2.5.1.2 External validity
... 18
2.5.2 Reliability ... 18
2.5.3 Practicality... 18
2.5.4 Validity, reliability, and practicality of our research paper ... 18
2.6 Limitations, obstacles, and constraints ... 20
3 Theoretical Framework... 24
3.1 Definitions... 25
3.1.1 What is a strategy? What is the use of it? ... 26
3.1.2 Types of strategies... 28
3.1.3 Goals as basic function ... 29
3.1.4 Analysis models... 31
3.2 Factors of influence during the strategy development... 34
3.2.1 Information basis - determinants and interdependences ... 34
5
3.2.2 Dangers and their meeting mechanisms ... 36
3.3 CRM ... 39
3.3.1 What is Customer Relationship Management (CRM) all about Definition of CRM... 39
3.3.2 What is the goal of CRM? ... 40
3.3.3 The classic market relationship ... 45
3.3.4 Customer loyalty ... 47
3.4 Strategy and CRM ... 49
3.4.1 CRM as a strategic competitive advantage... 49
3.4.2 The customer ... 50
4 Empirical Studies ... 52
4.1 Question 1 ... 52
4.2 Question 2 ... 52
4.3 Question 3 ... 53
4.4 Question 4 ... 53
4.5 Question 5 ... 54
4.6 Question 6 ... 54
4.7 Question 7 ... 55
4.8 Question 8 ... 56
4.9 Question 9 ... 56
4.10 Question 10 ... 57
4.11 Supplement ... 57
5 Analysis... 59
5.1 Customer orientation and customer satisfaction/loyalty... 59
5.2 Responsibility within the organization... 60
5.3 Strategic element and corporate communication... 60
5.4 Relationship approach... 61
6 Conclusion and Reflections ... 62
6.1 Conclusion ... 62
6.2 Reflections... 63
7 List of References ... 64
7.1 Books, Magazines, Articles... 64
7.2 Internet Pages... 66
Appendix 1 Secondary Data Search ... 68
Appendix 2 Examples of a customer experiences with customer services ... 69
Appendix 3 Introduction Letter (English)... 71
Appendix 4 Introduction Letter (German) ... 72
Appendix 5 Questionnaire (English) ... 73
Appendix 6 Questionnaire (German) ... 76
6
Table of figures and tables
Figure 1-1: Disposition... 10
Figure 2-1: Quantitative vs. Qualitative ... 12
Table 2-1: The two roads...12
Figure 2-2: Data Search ... 14
Table 2-2: Determinants of Questionnaires...17
Figure 2-3: Assessment V-R-P (own illustration) ... 20
Figure 2-4: Research Stages ... 21
Figure 2-5: Research Guide... 21
Figure 2-6: Research Method ... 22
Figure 2-7: Types of Errors ... 23
Figure 3-1: Strategic management elements ... 27
Figure 3-2: SWOT-Matrix... 31
Figure 3-3: BCG-Matrix ... 32
Figure 3-4: Role of External Analysis... 32
Figure 3-5: Five Forces ... 33
Table: 3-1: Strategic Questions...34
Figure 3-6: Triple-pendulum ... 35
Figure 3-7: Information content ... 36
Table 3-2: Aspects of resource leverage...37
Figure 3-8: Categories of resource leverage... 37
Figure 3-9: The right way ... 39
Figure 3-10: The relationship circle... 42
Figure 3-11: Mutual beneficial exchanges ... 47
Figure 3-12: Upside-down pyramid... 50
Figure 3-13: Customer Motivation Analysis... 51
Figure 4-1: Q1 ... 52
Figure 4-2: Q2 ... 53
Figure 4-3: Q3 ... 53
Figure 4-4: Q4 ... 54
Figure 4-5: Q5 ... 54
Figure 4-6: Q6 ... 55
Figure 4-7: Q7 ... 55
Figure 4-8: Q8 ... 56
Figure 4-9: Q9 ... 56
Figure 4-10: Q10 ... 57
7
1 Introduction
This chapter presents the background and the problem of the chosen topic, which results in
the formulation of the purpose of the thesis. Finally, an illustration of the disposition of the
thesis is presented.
1.1 Background
Once Max Grundig, a famous German entrepreneur was asked, how he makes decisions. He
answered:
`I think of the problem and my stomach decides'
Due to the complexity of today's business, this seems to be not a good advice for
current managers. Furthermore to have a clear strategy, a guideline to accomplish all the tasks
is more than only advisable, yet it is essential. Growth has become an essential part of
business and company life in these times driven by shareholder value, stock exchange indexes
and `globalisation'.
In today's highly competitive economy companies must respond quickly and
efficiently to changing business requirements, especially in times when it comes along with a
generally declining economic development, which makes it more difficult for the companies
to survive. This increasing stress of competition forces companies more and more to become
acting and active.
`The biggest risk is to do nothing when the world is changing rapidly.'
1
According to Doyle (2002) management nowadays tries to react on difficult situations
by cutting costs, enhancing profitability and reducing the workforce. This short-term focus
does merely concentrate on growth and profits. Managers see themselves ranked in
comparison to their competitors and therefore strive to be on the top of the list. Shareholder
value, RoI
2
, earnings per share, or RoCE
3
track the most attention. Also business analyst's
1
W. B. Wriston, Retired Chairman, Citicorp
2
Return on Investment
3
Return on Capital Employed
8
commentators and journalists playing this song. This short-term orientation has to be replaced
by a more long-term view. This demands a clear strategy to cope with.
1.2 Problem discussion
Johnson and Scholes (1997) stress that all companies have to challenge the need of managing
strategies to run the business adequately. Prahalad and Ramaswamy (2000) point out that
companies have to bear in mind that the market changes are driven by customers. Customers
playing an `active role in creating and competing for value' and are to be seen as a `source of
competition'.
Doyle (2002) puts it more clearly and places the customer and its needs and wants in
the centre of any business activity. Only if a company can successfully meet these needs the
customer is likely to purchase.
One important fact is that companies have to be aware that a customer is not looking for a
special product or service, far from it. The customer does not need a drill rather he needs a
whole in the wall. Doyle refers to this as `customer-led business' and suggests to set up a
`right-side-up organization' in the company, which means that every activity undertaken has
to put the satisfied customer on top. Gummesson (2002) introduces the terms of `full-time-
marketers' and `part-time-marketers' to make clear that serving the customer is not only the
task of the marketing department, also every other employee contributes to this objective.
Kotler et al. (2002) emphasize, as they call it `marketing concept', the importance to
satisfy the customer and also make clear that it requires a long period of time to overcome old
traditions and habits in a company. They provide a strategic plan to help companies to
become more customer oriented.
Hamel and Prahalad (1990) contribute to this topic by introducing the metaphor of a
company as a tree. The goal is to identify the core competences and in result the core products
that enable the company to offer superior products to their customers.
In addition, Doyle (2002) describes the impact of satisfied customers in more detail.
He points out that one has to distinguish between satisfied and highly satisfied customers.
Furthermore he claims that the contribution to profitability and growth as a result will
increase dramatically if the company can retain the customers and build a long-term
relationship. Bergeron (2002) claims that the chances and opportunities for the company are
higher when they can offer products and services that are perceived superior to those of
competitors. Stahl et al. (2003) discuss this in more detail and present a concept of customer
lifetime value and connect this with the shareholder value concept.
9
1.3 Purpose
The purpose of this thesis is to find out whether companies are putting strategic emphasise on
CRM, that is, if companies perceive CRM as an important part of their strategy in general or
if CRM is an unused tool and is given less intention.
1.4 Limitations
Due to the complexity of CRM as such we are only looking at the relationships with private
customers. In addition we are neither looking deeply on relationship-based networks nor we
will take an in depth view on special implementations of CRM to business strategies.
Furthermore we will not concentrate on the technological approach to accomplish
CRM in any company. Because of the wide discussion about strategy and its components it is
impossible to taken every aspect into account for this thesis. Therefore we had to limit and
narrow the scope to general models and perceptions. Any industry- or company size specific
alignment will not be our concern. There are also limitations of the chosen research method
which will be mentioned in more detail when we describe our research method.
1.5 Disposition
Figure 1-1 below illustrates the different sections of the thesis, and their relative positions to
each other.
10
Figure 1-1: Disposition
11
2 Methodology
`...and of course the clear and certain truth no man has seen nor will there be anyone who
knows about the gods and what I say about all things. For even if, in the best case, one
happened to speak just of what has been brought to pass, still he himself would not know. But
opinion is allotted to all.'
4
(Xenophanes, 500 B.C.)
2.1 Scientific approach
There are two different ways of approaching the way a theory is created and linked to the
reality the inductive and deductive way.
2.1.1 Induction
When using the inductive approach the researcher's starting point is not a theory. He or she is
aware of the problem which helps to design appropriate problems. A further understanding of
the studied problem will derive from the empirical study. The conclusion drawn will explain
facts that have been observed. Emory and Cooper (1991, pg. 44) say that `the facts support
the conclusion'.
2.1.2. Deduction
Characteristic for a deductive approach is that a researcher starts from an existing model or a
theory the hypothesis. As a result, logical conclusions have to appear. Emory and Cooper
(1991, pg. 42) point out that `the conclusion must necessarily follow from the reasons given'
and therefore there is a strong relationship between reasons and inference.
2.1.3. Our approach
We have chosen a deductive approach, that is, based on general theory we are looking at the
described problem and will draw conclusions to get an answer to our research question.
2.2 Research method
You can find qualitative and quantitative research methods. Both are tools that have their
advantages and disadvantages. Bagozzi (1996) presents a quick overview which is shown in
figure 2-1. Holbert and Speece (1993) use the metaphor of `The two roads' to distinguish
4
cited from: http://www.seop.leeds.ac.uk/archives/win2002/entries/xenophanes/
12
between qualitative and quantitative. Table 2-1 is enhancing figure 2-1 by explaining more
detailed the differences.
5
Table
2-1:
`The
two
roads'
Figure 2-1: Quantitative vs. Qualitative
2.2.1 Qualitative
One is doing a qualitative research when data is collected, analysed, and interpreted which
cannot be quantified or put into numbers. It is often based on a case-study or a survey-
research with very small sections. According to Bagozzi (1996, pg. 68) qualitative research
uses small, not significant samples. `Questions are not standardized for comparison across
respondents and respondents may contaminate each other'.
2.2.2 Quantitative
The quantitative approach is rather the opposite of the quality one and typified by the sample
survey. Holbert and Speece (1993) also refer to it as hard research. They also emphasise that
both concepts are mutually exclusive and complementary at the same time. Malhotra (1999,
pg. 148) defines quantitative research as a methodology that `seeks to quantify the data, and
typically, applies some form of statistical analysis.'
2.2.3 Our method
In our investigation we have chosen to use a quantitative method when collecting information.
To accomplish the research we are going to use a questionnaire. The purpose is to give an
indication of the attitudes and behaviour of a large group of companies rather than the in-
depth views of a small number of enterprises.
5
Malhotra (1999) makes a distinction based on 5 criterions: objective, sample, data collection, data analysis, and
outcome
13
2.3 Method for collecting data
There are two different types of data that can be used for an empirical study secondary and
primary data.
2.3.1 Secondary data
If data has already been collected and is existing it is called secondary data. Paramasuran
(1991) mentions that one has to distinguish between internal and external secondary data.
One can find internal data within a companies archive.
External data is information that derives from outside a firm. A flow diagram for
conducting a data search is illustrated in figure 2-2. One can find secondary data mainly in
books, on the internet and in magazines and articles the so-called desk research. Emory and
Cooper (1991) provide a structured overview of the so-called `secondary data search flow'
which is illustrated as appendix 1
6
. Holbert and Speece (1993) add that secondary research
comes before the primary research. They also mention that the researcher has to be aware of
the fact that the secondary data does not directly respond to the research problem, since the
data was gathered for other purposes before. But to secondary data is useful and necessary to
improve the quality of the entire research.
6
Malhotra (1999) describes various sources for secondary data in more detail, e.g. governmental agencies,
statistic bureaus, etc.
14
Figure 2-2: Data Search
15
2.3.2 Primary data
Primary data is completely new collected material from a research. The gathered information
was not available before. It can be done by various ways interviews, observation, etc...
Chisnall (1997) is going more into detail and discussed the different types and ways of
obtaining primary data. On the on hand he distinguishes between non-reactive techniques
(observations, audits) and reactive ones (experimentation). Another way is the use of
questionnaires, which are widely used in marketing investigations. The questionnaire
approach as such can again be divided in different categories, that is, personal interviewing,
postal or mail-surveys, telephone enquiries, panel research, and group questioning.
Primary data is used to enhance and augment the assumptions and insights drawn from
the secondary data. Without primary data it is unlikely to achieve the research goal. It is
essential to pay high attention to accuracy when collecting primary data, no matter if it is
obtained by interviews, questionnaires or other means.
2.3.3 Our data collection
We have used both types of data throughout our investigation. The secondary data is
especially important for the theoretical framework we are going to present in the next chapter
and functions as the basis of the subsequent analysis and conclusion of the primary data. We
have primarily used the libraries of Halmstad University, Sweden and Anhalt University of
Applied Sciences, Germany as well as the Internet and different magazines to get access to
secondary data. Our primary data derives from a questionnaire-based research (mail survey)
we have conducted for statistical analysis.
2.4 The questionnaire
Chisnall (1997) describes a questionnaire as a tool to obtain certain information about a
problem that has been defined in advance. In the end, after analysis and interpretation of the
collected data the use of the questionnaire will result in a better understanding and
appreciation of the described problem.
2.4.1 Requirements
Chisnall (1997) continues by describing the creation and design of a questionnaire more as a
matter of art than science. He emphasizes that regardless the problem a questionnaire has to
follow three basic principles:
16
First, the responder must be able to understand the question, second, he or she must be
able to provide the information asked for and third, there must be a will of the respondents to
provide the information. This leads to more specific requirements. It is essential that we use
words that cannot be misunderstood or where is no doubt about the meaning/definition.
Furthermore the questions have to be asked in simple language, that is, one has to avoid
uncommon words or foreign words that complicate the understanding. Scharmbacher (2002)
warns that the questionnaire should not be perceived as annoying.
In addition, the questions have to be related clearly to the problem. This implies that
the question should be as short as possible and not very complex otherwise it would be
better to make 3 simple and clear questions out of one complex one. Paramasuran (1991) calls
those differences disguised and non-disguised.
7
Chisnall (1997) also mentions to avoid biases
in questions, that is, they should be free of any suggestion which answer will be more suitable
than others. This also includes taking care that no social pressure is put on the respondents.
Scharmbacher (2002) emphasizes that the questionnaire should contain only as much
questions as needed. This also refers to his warning that a to extended questionnaire might be
seen as troublesome and therefore the outcome will be of less quality. Before conducting the
research and sending out the questionnaires it is necessary to run a pilot test, that is, to ensure
that the questionnaire is checked in advance.
2.4.2 Structure
He continues in mentioning that some problems may arise when the questionnaire is
structured in the wrong way, that is, when the question order has an effect on the outcome.
There are two general ways of structuring a questionnaire.
First one can start with general or unrestricted questions and then continue with more
specific and detailed ones. The other possibility is fairly the opposite way starting with
specific questions and then widen the horizon of aspects.
So-called filter questions are a helpful tool to avoid a waste of time on questions that
are more specific and related to a general question which has been answered negative
before.(e.g.: do you smoke? NO there is no further need to ask about the kind of tobacco
products). Classification questions should be established at the end of the questionnaire
except one is looking only for a special target group.
7
The latter one is a direct question where the intention is obvious, disguised questions are indirect where the
purpose is not noticeable for the respondent
17
The researcher has also to choose between open-ended questions and closed questions.
Paramasuran (1991) contributes to this topic by allocating different determinants of the
questionnaire as it is shown in table 2-2.
Table 2-2: Determinants of Questionnaires
2.5 Measurement
Emory and Cooper (1991) list three different ways of evaluating a measurement tool
validity, reliability, and practicality.
2.5.1 Validity
When it comes to validity the researcher has to make sure that the intention of his study was
measured. Is the research free of coincidence and systematic errors? The problem is that there
is no 100% security about the outcome. Therefore the researcher strives for as much as
possible validity. One can distinguish between internal and external validity.
8
2.5.1.1 Internal validity
Internal validity refers to the question whether the results correspond to the reality. Emory
and Cooper (1991) describe the internal validity in more detail and distinguish between
content, criterion-related, and construct.
Content validity addresses the adequate coverage of the chosen topic. Criterion-related
validity deals with the problem of measuring the empirical problem, that is, if it is possible to
obtain a clear result or outcome. Therefore one has to find relevant criterions to make sure
that the research can deliver useful data.
Construct validity refers to a combination of theory, on which the construct is based on, and
the instruments, which are used to measure the characteristics of interest.
8
Bagozzi (1996) provides another point of view concerning validity he stresses the importance of achieving
theoretical and empirical meaning and explains 6 criterions in more detail
Details
- Seiten
- Erscheinungsform
- Originalausgabe
- Jahr
- 2004
- ISBN (eBook)
- 9783832440664
- ISBN (Paperback)
- 9783838640662
- DOI
- 10.3239/9783832440664
- Dateigröße
- 1.4 MB
- Sprache
- Englisch
- Institution / Hochschule
- Högskolan i Halmstad – Sektionen för Ekonomi och Teknik
- Erscheinungsdatum
- 2005 (Januar)
- Note
- 1,0
