Paper Example on Risks and Benefits of Customer Orientation

The various risks associated with the company remaining a product driven company include:

Missing market opportunities. A product oriented approach results in the creation of superior products with the aim that customers will want what you have. However, the market does not always want what is the best for them but what is needed or beneficial to their needs. Product orientation, therefore, results in more focus being placed on product improvement rather than market analysis causing loss of opportunities to exploit the market requirements (Edmunds, 2018).

Obsolescence of market share control. Continual focus on product development results in less time used in image creation. This results in loss of consumer trust concerning market changes thereby resulting in loss of market share (Edmunds, 2018).

Benefits of customer orientation

Diversification

A business that is customer oriented can understand the specific market trends and requirements and therefore devise various products that meet the myriad of clients needs. By doing so, the company ends up diversifying its products.

Customer satisfaction

A customer will always be satisfied since the market oriented approach focuses on understanding the specific market requirements. This results in enhancement customer loyalty and increasing the companys market share (Polaczyk, 2017).

Risk mitigation

Market orientation is accompanied by various merits discussed such as product diversification and customer satisfaction all of which contribute towards mitigating the risk of competition with regards to companies that are product oriented (Polaczyk, 2017).

IBM was operating on a multinational level with branches in most countries. It had provisions in local operations such as manufacturing and delivery operations. The company was more focused on product creation through the establishment of advancements in technology to provide a global reach (Lohr, 2010). However, after intense competition, it changed into a market focused company to by adopting a model that lowered the cost of shared services while improving their delivery and support their products and services. It put client satisfaction among the tenet of their operations by ensuring that most of its employees focus in development, production and delivery of high quality solutions to their clients rather than internal working services (Forbes, 2010).

References

Edmunds, S. (2018). The Disadvantages of Product Orientation to a Business. Smallbusiness.chron.com. Retrieved 18 January 2018, from http://smallbusiness.chron.com/disadvantages-product-orientation-business-45985.html

Kralingen, B. (2018). Forbes Welcome. Forbes.com. Retrieved 18 January 2018, from https://www.forbes.com/2010/07/07/ibm-transformation-lessons-leadership-managing-change.html#10027ad43afb

Lohr, S. (2010). Huge Payoff for I.B.M. After a Shift. Nytimes.com. Retrieved 18 January 2018, from http://www.nytimes.com/2010/01/20/technology/companies/20blueweb.html

Polaczyk, J. (2017). Business 101: The Benefits of Customer Centricity. LiveChat. Retrieved 18 January 2018, from https://www.livechatinc.com/blog/the-benefits-customer-centricity/