When company suffers from strategic problems you will most likely be able to see the "lesions" showing up here and there. Poor customer service, inefficiency of operations, legal or employee problems are great examples of the outcome of poor managerial team and lack of strategical planning. I'd like to discuss too poor service/product quality and low R&D investment as indicators of strategic problems.
When company has too many customer complaints that is a direct indicator of either or both of the two: company disregarding customer feedback and poor level of quality and service. Either of these damages the image of the company and creates negative publicity and brand deterioration. No matter how much money you will spend on marketing the public will eventually catch up with realistic view of the company and will not use the product or switch to a competitor.
Low R&D investment compared to other companies is also a big problem. In order to be competitive and stay at the top companies have to maintain their edge. Therefore, they have to invest money into developing the product/services and better ways to produce them. Lower R&D investments would mean that a company becomes a laggard and will leap behind and it is only the matter of time that it will go into crisis or go out of business.
The company with a lot of customer complaints that serves a good example of poor strategic vision is infamous PayPal - an ebay payment processing company. Within the past 5 years the company has not been doing well in terms of customer service: dealing with technical issues and customer service inquiries. I personally know people whose funds have been frozen for over 2 years as a result of a technical mistake on PayPal's part and they have never refunded the money. You can find muliple complaints from general public on www.paypalsucks.com. As a result of this poor strategic practices there is lack of trust towards Paypal brand both from merchants and customers alike. Even though Paypal is trying to solve the problem by improving their system and customer service the stigma of distrust and low quality will stick with the company for years to come.
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4 comments:
Bravo! It just struck me, but I have not failed this time, I remembered! I have successfully read your post!
I totally agree with you, first off, with customer complaints affecting image and brand power. Who wants to keep using a product or service that sucks? Who would still consider such a company to make anything else good, ever? If I lose faith in a company, it would take a lot to bring me back to even considering a purchase with them.
Low R&D investment can also be a big no-no in terms of strategic wellness. Less productive development of goods and services means your products will be lacking a lot of new possible features that other companies have probably already implemented due to advanced research and development. This would mean more people look at your product and see less value in it, so it definitely makes sense how it could lead a business into crisis or no business at all.
It's interesting that paypal is so low in terms of customer service with so many complaints. I always thought that people considered Paypal to be some hit service that everyone used. But boy am I glad it's not, since I was always against it since I first heard of it. It's bad enough that we have problems with bouncing checks, overdrawn debit cards and overdue credit card bills, why should we use a third party to manage our money a 4th way? Too much headache =\.
Distrust 1, Paypal 0.
--- Karup
Thank you thank you and I appreciate your lonely but much valued comment :)
Even though Paypal does kinda suck in terms of customer service they have been improving it and how do I know? - I am partly using them for my online business needs. There are a couple of reasons it makes sense to use them
1. Their flexibility and convenience compared to other payment processing services (for example, Paypal integrated USPS postage into their system and shipping through them is easier than ever)
2. A lot of people use paypal because of eBay. Therefore, it is just another way of accepting payments and about 10-15% of people pay through Paypal.
The only thing is - I am very careful with them and never keep more than $500 on account. If the alternative arises - I'll jump right on it. I know u might think - Google Checkout - ehh not the same yet. Paypal is much more prominent and many more people use it.
Disrust 1, Convenience 1.1
ehh what the heck they did much improve over the years so I'm going to stick with them for now.
This is something interesting. I've been using Paypal with eBay and didn't have any problems. But the account being frozen for 2 years and not refunded...now that is a bit scary.
Alexander,
I agree Pay pal has dug a whole for its self but then again if you ever have problem and just freeze someone’s account for x amount of time, is never good news. The problem pay pal has is, they don't want to deal with problems the just want money and that will carry you for some time but once everyone has enough of it, like Jennifer says "you will drop like its hot" pay pal.
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