BCO6604 Customer Relationship Management: Customer Business Strategy

This report provides a detailed analysis of customer business strategy within the context of Customer Relationship Management (CRM). It explores various business strategies such as price skimming, acquisition, product differentiation, and growth strategies, highlighting their benefits and risks. The report also discusses the importance of strategic planning in achieving business goals, providing clarity, direction, and focus. It further examines the role of CRM in managing marketing, sales, technical aspects, and service management to enhance business efficiency and reduce costs. The analysis includes a brief overview of Red Balloon, an Australian organization, as an example of implementing product differentiation strategy. The report concludes by emphasizing the need for careful monitoring and skillful planning when choosing and implementing a business strategy to avoid potential disadvantages and ensure successful execution.

Customer relationship management
September 27
2018
Customer business
strategy

Executive summary
In the globalising world organizations are adapting the customer relationship management to
make their business more sustainable. In this order companies are using different strategies
that can help them to do so. Customer business strategy is one among the CRM. This makes
businesses capable to achieve their business goal with the help of a strategic planning for
their business for a longer time period. Companies in the emerging business market are
seeking for such strategies. Although this is the best way to compete in the emerging world,
customer business strategy also has its pros and cons. Therefore, before implementing such a
business strategy companies have to analyse strategy as per their business circumstances in
order to avoid any complications of implementing the strategy in future.

Table of Contents
Introduction................................................................................................................................3
Literature review........................................................................................................................3
Customer relationship management...........................................................................................4
Business strategies.....................................................................................................................5
Price skimming strategy.........................................................................................................5
Acquisition strategy...............................................................................................................5
Product differentiation theory................................................................................................6
Growth strategy......................................................................................................................7
Benefits of a business strategy...................................................................................................7
Clarity, direction, and focus...................................................................................................8
Identification of key steps......................................................................................................8
New opportunities to the business..........................................................................................8
Better business results............................................................................................................8
Risks of business strategy..........................................................................................................9
Future uncertainty..................................................................................................................9
Impedes flexibility.................................................................................................................9
Technology...............................................................................................................................10
Conclusion................................................................................................................................10
References................................................................................................................................11

Introduction
Customer relationship management has been brought to the light in late 90s. At that time
period relationship marketing has appeared as most dynamic topic for academics as well as
practitioners. In the millennium also, relationship marketing has become the most dynamic
technology topic for practitioners. In 90s the term “customer relationship management” was
emerged only in the information technology vendor (Payne, and Frow, 2005). Both the terms
relationship marketing and customer relationship management are often interchangeable. As
per the definition of American Marketing Association (2013), marketing is a set of
institutions, activity and processes of creating, communicating, delivering, and exchanging
the services in the form of direct services or products which have a value for their customers,
partners, and society. This definition also point out the managing good relationships with the
customers or clients is an essential function of marketing managers to enhance their
company’s competitive advantage in the emerging market (Chakravorti, 2009).
In this report a complete analysis of customer business strategy or customer relationship
management has been done to understand the concept of relationship marketing. Also this
repost includes a brief analysis of this strategy’s implementation in Red Balloon organization
operating in Australia since 2001. This report will discuss different theories and strategies
given in the literature of customer relationship marketing.
Literature review
The underlying research of strategic business is that firms or organizations are capable to
achieve superior financial growth in the competition as well, when they are capable of
developing superior resources and skills to achieve an advantage in the competition (Van
Alstyne, Parker, and Choudary, 2016). According to the competency based view,
organization’s focus is to aim the only on creating value activities or value chain services. In

the context of competitive business strategy, only those activities are considers that are with a
great impact on the differentiation or those having a growing or large proportion to the costs.
Researches also state that institutional environmental forces are shaping the organizations and
this shape of an organization has important consequences on social environment.
Customer relationship management
Customer business strategy is composed of different parts, management of marketing, sales
management, and technical management, and service management of a business (Maté,
Trujillo, and Mylopoulos, 2017). Core content of the customer business strategy is to enhance
the degree of automation in the organization to enhance the productivity and efficiency of the
organization to make business. In this process organizations are looking for automation in all
the business aspects through a continuous process of improvement and management of sales,
customer services, and marketing of their services and business (Demuijnck, 2015). All these
efforts of an organization are made to improve their business efficiency, service, and reduce
the cost of their products or services, also to expand their sales to increase the total revenue
and profit of the business so that companies can improve their enterprise competitiveness
(Payne, and Frow, 2005). Also the business strategy is defined as the firm’s working plan to
achieve its vision, competing successfully, prioritizing objectives, and optimising the
financial growth with its new strategic business model (Chang, 2016). There are different
In terms of core definition, customer business strategy is an innovative approach of an
organization’s management to make an interaction with its present as well as future
customers to analyse the customer data to improve the business relations with them.

Business strategies
In the globalizing world new companies are often facing some unique challenges in the form
of their business hurdles. In the starting era of business, companies were using different
strategies like identifying their products, adjusting product prices and many more. In the
global world there are so many new challenges which organizations are facing. To overcome
these challenges companies are using some unique strategies. These marketing strategies to
grow business are also known as business strategies also. These business strategies are price
skimming strategy, acquisition strategy, product differentiation strategy, and growth strategy.
Price skimming strategy
This strategy evolves charging a high price for their products or services particularly during
their introductory phase. SMEs will use this strategy to recover their production and
advertising costs quickly. However to implement such strategy companies must have
something special about the product or service on which these high prices are charged. This
strategy is often used to introduce a new product in the market. Main motive of charging high
price in the starting time is to collect as much as revenue from the market using the advantage
of high demands. Also at this time competition is not there for the product in market to lower
the price. As the demand gets lower and completion enters into the market companies lower
their product or service price also.
Acquisition strategy
Acquisition is the process in which a larger company purchases almost shares on another
smaller or competitive company to take control over it. a successful acquisition occur when
buying company own more than 50% shares of the targeted company. In this process the
acquiring company purchases the assents and resources of the targeted or acquired company.
Company adopt this strategy for various reasons like, to achieve greater market share, cost

reduction or niche offering, increased synergy, and economies of scale. Sometime for SMEs,
to enter a new economy or county, buying an existing company is the only viable option or
easiest way to expand its business overseas. In this process the purchased business already
have its own resources and assets, a brand name value, and other intangible established in the
target country. Such facilities will help the acquiring the company to ensure its quick start off
with an existing solid customer base in the new target country (Williams, et al., 2016).
When acquiring is more beneficial than expanding company’s own business in the new target
country it is considered or become the part of its growth strategy. This is just because
sometime expanding the business causes efficiency losses to the parental company. Larger
organizations look for promising young companies to acquire, this strengthen the business
growth and high profits. In some cases when an organization attracts number of competitor
companies or the product supply ramps up from the existing company, they may look for the
acquisition strategy to balance their demand supply.
Product differentiation theory
This is a marketing process that showcases the advancement of differences between products
(Banker, Mashruwala, and Tripathy, 2014). The strategy of differentiation tries to develop the
product making it more attractive by enhancing and contrasting its unique qualities with the
competitive products in the same market. A successful product differentiation always gives a
competitive advantage to the company business (Barin Cruz, Boehe, and Ogasavara, 2015).
This strategy can be seen in the products of Red Balloon, a company started in 2001 to serve
not the products but an experience to its customers. This unique product of serving an
experience was completely new in the market at that time. This unique idea made the
company to sustain so long and continued. Company founder Naomi Simson, started this
company with the same motive to serve people an experience not a product. She started the

business as this was something unique that the corporate world and customers had not
experienced yet.
Apart from attracting consumer interest, product differentiating strategy can enhance the
brand loyalty and may allow the company to hike its product price. If company is claiming a
unique and better product even if the company is making this belief based on the facts or
some speculative means, company can attract customer for the same product.
Growth strategy
Sustainability of an organization broadens the scope for one or more businesses in terms of
their customer functions, customer groups and alternative technologies and this all is done to
enhance the organization’s overall growth or performance. This growth of an organization
can be seen in external assets as well as in external assets of the company. This growth
discussed in the growth strategy is both the quantitative as well as qualitative development of
business. However, the qualitative growth also reflects its impact in terms of quantitative
form therefore, it can be stated that quantitative growth is a result of qualitative growth of the
business. In business language growth is a way to showcase what the organization wants and
what are the objectives or goals of the company (Filatotchev, Su, and Bruton, 2017). For
example, Red Balloon has shown its growth in the form of creating a new parental company
called The Red Group in 2017. Although it was a joint venture with Dave Anderson, it shows
that the company is growing fast that makes a positive impact on its existing as well as future
customers.
Benefits of a business strategy
Strategic planning is all about setting longer goals for the company and it is a process of
development of a plan to achieve these goals. This decides that at which place leaders want to

see their business in the future. Having a customer business strategy benefits the company or
organization in different forms (Massa, Tucci, and Afuah, 2017). Some of the key benefits of
having a business strategy are discussed below:
Clarity, direction, and focus
Having a proper business strategy always makes it clear to the people working in an
organization that what is their goal. This makes employees understand that at which place is
their current business is and at which place they are taking their business. This gives a clarity
to leaders also as they can understand that in which direction they have to align their business
and on which part their organization need to focus more (Kernbach, Eppler, and Bresciani,
2015).
Identification of key steps
Having a business strategy enables the leaders of the company to identify that what are the
key essential moves they have to make to sustain their business goals and achieve them
successfully.
New opportunities to the business
Working on a business strategy evolves new innovative or creative idea that can enhance the
new business opportunities to get success in more efficient way (Akter, et al., 2016).
Better business results
Developing a proper customer business strategy is likely to give better business results as it is
very clear to leader that where they are taking their business and what they have to do (Wirtz,
et al., 2016).

Risks of business strategy
Long with so many benefits, customer business strategy or business strategy have some
disadvantages also. While choosing a business strategy organization must monitor the
business carefully and avoid all the complacency. Also, it requires a skilful planning and
difficult to implement as well. The implementation process requires a proper communicated
plan, and implemented in such a way that requires a lot of supervision and active
participation in the execution. Along with all these disadvantages there are other
disadvantages of having a long terms business strategy (Holmes, et al., 2018). Some of them
are as following:
Future uncertainty
Among ll other criticism of having a business strategy this one is the biggest. In every
criticism this point of having a unpredictable future is common. While preparing a business
strategy management has to predict some future conditions to make it reliable, but it is fact
the future cannot be predicted so having a long time business strategy is very uncertain and
risky as well.
Impedes flexibility
Another criticism on having a business strategy is impeding company’s flexibility in the
future. Many times, implementing a business strategy, results into saying no to some of the
opportunities that the organization get while working on its business strategy. This inability
of an organization to choose all of the opportunities presented to the organization is
frustrating and results in negative impact on business. Another way that flexibility impeded is
through integration and a well-structured alignment of the strategy. This integration and the
alignments ensure that the company is working in the right direction but doing this can inhibit
the adaptability of the organization (Morris, et al., 2006).

Technology
In order to implement a business strategy, technology strategy is harmonised with the
organization’s business strategy. Business strategy integrated it a business strategy defines
the continuous process of generating, evaluating, assessing and selecting the technical options
required for the strategy. In this process company has to make right choice for the technology
selection to be used in its business strategy (Wagner, Beimborn, and Weitzel, 2014).
Conclusion
The above report concludes that the organizations operating in this globalising world are
seeking for business strategies to make their business more sustainable and successful as
well. Making a business more sustainable is the process of continuing the business for a
longer time period. In this order organizations prepare business strategies which require a lot
of efforts form the management and its employees as well. In this order organizations have to
face the associated advantages as well as disadvantages of having a business strategy for the
future sustainability of their business. From the above discussed advantages and
disadvantages of having a business strategy it is concluded that having a business strategy is
goof up-to some extent. The only significant disadvantage of having a business strategy is the
inability of companies to grab the opportunities which they are presented with during the
strategic implementation period. This is the only area on which organizations need to work to
make their business strategy more successful and efficient. For this organization need to
design their business strategy in such a way that there is a scope to adapt or grab the future
opportunities presented in the coming future. This will make the strategy more successful and
can help in the process of implementation as well.

References
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firm performance using big data analytics capability and business strategy
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Banker, D., Mashruwala, R. R., and Tripathy, A., (2014) Does a differentiation strategy lead
to more sustainable financial performance than a cost leadership strategy?. Management
Decision, 52(5), pp.872-896.
Barin Cruz, L., Boehe, D.M. and Ogasavara, M.H., (2015) CSR-based differentiation strategy
of export firms from developing countries: An exploratory study of the strategy
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Chakravorti, S. (2009). Extending customer relationship management to value chain partners
for competitive advantage. Journal of Relationship Marketing, 8, pp. 299–312
Chang, J.F., (2016) Business process management systems: strategy and implementation.
Austria: Auerbach Publications.
Demuijnck, G., (2015) Universal values and virtues in management versus cross-cultural
moral relativism: An educational strategy to clear the ground for business ethics. Journal of
Business Ethics, 128(4), pp.817-835.
Filatotchev, I., Su, Z. and Bruton, G.D., (2017) Market Orientation, Growth Strategy, and
Firm Performance: The Moderating Effects of External Connections. Management and
Organization Review, 13(3), pp.575-601.