Turbulent External Environment and Marketing Strategy

As is known, the development of a marketing strategy is based on a number of analytical procedures.

Their main object is the external environment, and the larger and more geographically diversified the business, the more important it is to rely not so much on the immediate competitive environment as on research into trends and processes on a macro scale. If the external macroenvironment becomes too turbulent, company management often begins to express doubts about the advisability of work related to strategic planning for the company's development. Is such a point of view rational and justified?

Once Again on Strategic Planning and Strategic Marketing

To answer the question posed above, we need to define what we call business strategy in general and marketing strategy in particular. Very often, the main criterion for separating strategic planning and marketing from "non-strategic" ones is the timeframe for which the corresponding plans are drawn up. However, this approach is not entirely correct: if we classify marketing (and other) plans by time horizon, it is more appropriate to talk about long-term, medium-term, and short-term planning.

Not every long-term plan is a strategy. The fundamentally important point here will be the content, not the timeframe for the plan's implementation. The strategy must fulfill its basic purpose – to set the directions for business development. Of course, it must be adequate to both the company's internal environment and the state and prospects of the external environment.

It follows that high dynamism of the external environment does not at all hinder the development of strategic decisions; on the contrary, the more complex and risky the external situation, the greater the importance of a quick reaction to it.

This does not mean that such work is simple. It does become more complicated. But at the same time, the need for it grows. If a company ignores changes in the external environment, trying solely through operational activities to "cope" with the challenges that have arisen, the consequences of such a model can be very negative from the perspective of the business's prospects, up to its liquidation.

Thus, high turbulence of the external environment is not an obstacle to strategic planning, but rather a direct indication for it. However, a resource base and the will of management are required for this process to be effective in a complex situation. After all, a clear separation of the horizon and content of planning, where its "strategic nature" is determined by the latter, provides an understanding of another fundamental point: the cost of an error in strategic planning is much higher than in long-term planning. A poorly chosen path will only move one further away from the set goal. And in unstable and often threatening circumstances, it is much easier to make a mistake.

To justify the difference between developing a strategy and implementing it in real business under relatively stable conditions and highly turbulent ones, an analogy can be drawn with performing planned and emergency surgical operations. In each case, the team of doctors requires specific resources and competencies, however, the high risks of an emergency operation, as we know from life, do not negate its lack of alternative.

Marketing strategy, in turn, largely sets the direction for the business's movement. Marketing is that sphere of activity within the company that is primarily focused on the external environment. Thus, it is the marketing department and the commercial block of the company as a whole that bear the main burden of adapting to changing operating conditions. Therefore, when the external environment acquires so-called turbulent properties, it largely depends on the marketing and sales team how correct and timely the company's reaction to new circumstances will be.

It is also important to note that although usually the terms dynamic and turbulent are used as synonymous to emphasize the complication of macroenvironment parameters, this is still not entirely correct. The term "turbulent" is more suitable, as it is more focused on highlighting the unevenness, and often unpredictability, of the environment, i.e., its change not so much in speed of movement, but in character and direction. And for marketing, it is this aspect of the development of the external environment that is more important from the point of view of strategy adjustment.

Speaking in terms of physics laws, it is the unevenness of movement – accelerations or decelerations – that affects a system; they can cause destruction, while uniform movement at any speed is not felt inside the system. The analogies with a company and the macroenvironment are obvious here.

Features of Developing a Marketing Strategy in Conditions of a Turbulent External Environment

So, the company has entered a "turbulence zone," meaning it cannot move as before. At the same time, it's "shaking" so much that there's no time to think about the future – the "commander's hands" are constantly on the wheel. Should we forget about the marketing strategy? No, but it is important to approach its change correctly.

First, and most importantly, the mechanism for developing (or adjusting) a marketing strategy does not fundamentally change. The basis of the activity remains the analysis of those factors and reasons that formed the "turbulence zone" and are located in the external environment, typically the business macroenvironment. Competent analysis will allow forecasting changes, evaluating them, and adapting the business. There is absolutely no need to operate with large time horizons; perhaps now your strategy will be drawn up for a quarter, and the annual plan will lose its significance – that's not important. But what is extremely fundamental is the substantive changes that the new strategy brings.

Thus, the work in terms of the marketing research function is restructured – it becomes more important, while at the same time, the timeframes for data collection and processing are sharply reduced. This means that it is necessary to identify key areas for which information is collected, attract additional resources inside and outside the company to reduce pressure on the time resource, and implement more efficient and often ready-made technologies for data processing. Without a clear understanding of the external situation, which is formed through marketing research, everything will fall apart already at the goal-setting stage.

Another point is the shift in emphasis from field research to desk research. The main factor in favor of such a deformation is speed, which is a weak point of "field" work, but at the same time, one must be guided by the specifics of the market and the situation as a whole.

A separate issue is attracting outsourcing – both at the stage of conducting market research and subsequently performing the set strategic tasks. Of course, if possible, it is better to rely on your own resources. This works well in conditions of company team mobilization. However, with a clear understanding of the missing competencies and the impossibility of their rapid buildup, it is important to quickly attract verified and proven partners in the market (which applies not only to the field of marketing but also logistics, finance, etc.).

Next, it is important to identify key problematic areas of activity and growth points under new conditions. For this, the good old SWOT is perfect. Information about the internal environment has not fundamentally changed yet, and you have collected information about the external one – it is important to summarize it and prepare it for goal setting.

Actually, the setting of goals and the tasks arising from them under turbulence also does not fundamentally transform as a procedure, but has a number of differences. Goals and tasks should be set for the minimum possible and specific timeframes, be limited in number, and assume minimal alternativeness. At the same time, it is extremely important not to substantively lose "strategic nature" and not to completely go into tactics. That is, they should not be aimed only at "squeezing" the maximum out of the accumulated potential. Development goals are also needed – creating profit potential for tomorrow, and possibly the day after tomorrow, which will come anyway. Otherwise, you will end up with a business liquidation strategy, which is not always justified.

However, important but more general categories of goal setting, for example, mission, can be neglected. Although, if it is quickly found under new conditions, that is a good sign for the company's future.

The system of goals and tasks transforms into a marketing plan. If possible, it should not lose complexity in terms of all main aspects of marketing activity. That is, in simple terms, do not forget about the 4Ps or the advanced substitutes you use in practice. For example, it is worth starting with the product itself, as well as carefully working out issues of assortment policy.

Specificity and detail as characteristics of a marketing plan in turbulence acquire special significance and stem from the new approach to goal setting. The timeframes for monitoring the plan's execution and its adjustments should also be reduced, but it is fundamentally important to maintain a reasonable balance and not break down into "manual control" while the autopilot is still generally functioning. This will, at a minimum, preserve strength for the final push if the situation worsens further, and at a maximum, will allow increasing work efficiency by ensuring its uniformity and predictability, which is especially important for the team in conditions of general uncertainty.

We certainly do not forget about motivation as a management function. Starting from the correct presentation of information about the external environment, which usually falls within the professional area of the marketer, and continuing with the correct construction of business processes from the point of view of supporting the personnel embedded in them.

Finally, it is very important to maintain the continuity of marketing plans and prevent the emergence of chaos, especially with activities involving expenses. The optimal solution is not to create new strategies and plans on top of old ones, but to change the existing ones in such a way as to avoid the risks of loss of control and irrational expenditure of resources. We must remember that in unfavorable conditions, the temptations of managers and owners to sharply reduce costs grow hyperbolically, and therefore they should not be additionally provoked into this through unjustified expenses that have lost their relevance in the changed external situation.

The Importance of Export and Import Activities during Economic Turbulence

As a rule, the turbulence of the macroenvironment is uneven. And its unevenness is very strongly differentiated geographically. Even if global economic disruptions occur, strong socio-political crises happen, they affect different countries and macro-regions differently.

If a company faces turbulence that primarily affects its home market of presence, where the main profit is generated, then the main marketing strategy in such a situation is geographical or country diversification.

It's good if the company has done the necessary work in advance and "hasn't put all its eggs in one basket." But even if negative dynamics have begun to increase, there is usually some time to try to enter new markets that become more attractive under the new conditions.

Hence, stability in conditions of turbulence is easier to achieve by those companies that have a diversified export portfolio. Moreover, it is desirable not within one macro-region, but across several – Europe, Central Asia, Japan, etc. Of course, if the specifics of the market and the competencies of the enterprise's team allow it.

Like any portfolio, a country export portfolio needs to be managed, reducing its risks and increasing profitability as much as possible. To achieve the right balance, systematic work on analyzing the global market and the markets of individual countries and macro-regions is important. Timely caught "weak signals" will allow time to make the necessary strategic decisions and, if not increase profit, then at least reduce losses, maintaining the business's viability in the long term.

Similarly, it is important to work with import supplies, which is especially important for trading companies, as well as productions using imported raw materials and components. If, for certain reasons, imports from a number of countries become economically unprofitable or impossible within political restrictions as a result of administrative barriers, then timely diversification of suppliers will resolve many issues and allow maintaining competitiveness in a turbulent external environment.

A separate issue here can be designated as the import substitution strategy, which for many years has provided good opportunities for domestic enterprises to develop in the Russian market. With high turbulence in the short and medium term, the transition to import substitution and a focus on the domestic market often become an important factor in preserving the business. Therefore, these options should always be worked out, especially for companies from regions and countries characterized by unstable and turbulent socio-political systems.