What is Strategic Drift
Strategic drift can be defined as any situation in which organizations fail to achieve their expected or planned strategic outcome. Sometimes, different situations including a changing business environment can result in challenges that altogether influence an organization’s strategy. Strategic drift occurs when a business fails to adapt to a changing external environment, and assumes that old marketing or customer service tactics will continually work in changing environments etc. Most times, a series of small, incremental changes to strategy enable the business keep in touch with the external environment.
In the past we have witnessed various companies suffer from strategic drift such as Kodak, as it failed to respond to rapid development and advancement in digital photography, despite having created such technology themselves.
Scholes et al (2008: 3) defines strategy as the direction and scope of an organization over the long-term, which achieves advantage for the organization in a changing environment through its configuration of resources and competences with the aim of fulfilling stakeholder expectations. All organizations tend to lay out strategic decisions which may include long-term objectives, scope of an organization’s activities, gaining competitive advantage over competitors, addressing changes in the business environment, building on resources and competences and stakeholders’ values and expectations.
Over time, social media has driven and changed the way businesses and customers interact. We have noticed that customers now demand increased speed in service delivery, excellent service and also react to poor customer service through social media channels. We have continued to see various organizations have huge social media crowd force apologies due to racism complaints, poor service delivery and products, misperceived promotions, poor customer care from their employees etc.
For example, we saw Unilever take down a Dove advert (“ad”), following social media complaints by customers, in October 2017. Dove was under fire over what customers perceived as a “racist” body wash ad. The ad in question showed a black woman in a dark shirt transforming into a white woman in a “clean” white shirt. The complaints made by individuals about the ad, forced the company to withdraw their ad and issue a public apology regarding same. So, clearly Dove did not envisage the reaction of its customers to the ad and as a result, they had to issue a public apology and probably lost some customer loyalty and goodwill.
Comments made by most people were towards the disappointment of Dove’s racist ad. If complaints by customers were handled negatively and there was no immediate remedial PR, then Dove’s sales would have inevitably declined by a larger margin. Analyzing their sales trends with such an unexpected negative response from customers, was definitely something that the organization overlooked.
Assumptions for analysis:
Reviewing Unilever’s annual reports, we noticed that Dove which is categorized as one of their “Personal care” product, made about 38% of their turnover amounting to £20bn in 2016 of which “Personal care” products made 48% of their operating profits. Unilever is believed to have 13 brands with sales of £1 billion or above each, and Dove was listed as one of the top best known brands.
For emphasis sake, Unilever indicated that “The Dove Self-Esteem Project has reached more than 19 million young people in 115 countries, encouraging women to develop a positive relationship with the way they look, and to make beauty a source of confidence rather than anxiety” in the 2015 annual report.
From this, I will assume Dove launched the ad to increase their sales for the quarter, because they were about £100k behind in terms of their yearly sales revenue target/budget and they hoped the ad would hype their customers’ attitude and undoubtedly increase sales, and of course reach out to the “19 million young people in the 115 countries” which existed as their customer base in 2015. Analyzing this, already shows that the negative ad released in October definitely reached their customer base, impacted the brand reputation in a negative way due to the criticism and I believe this impacted their sales trends as well. So, we know Unilever did incur the cost for the ad, whilst there was no incremental revenue to make up for it. Instead, the cost rather turned into a sunk cost as the company had to take down the ad with already- existing revenue impacted negatively.
We will affirm that yes, Unilever was impacted by this and it drew their objectives backwards as it was received with negative criticism by customers.
So what can other businesses learn from this? We have seen so many organizations create their own social media accounts through Twitter, Facebook, Instagram etc. and we have also seen top leadership in most organizations create social media accounts to represent the organization and reach out to customers as well. One thing I like about MTN Zambia, is the fact that their Managing Director, Charles Molapisi has taken up the initiative of being on social media and every now and then, he has live video sessions on Facebook where he interacts with customers and answers all their questions regarding products, job opportunities, service delivery complaints etc.
In the years to come, organizations should change from focusing on only Call Centre customer service to focusing holistically on other factors which may affect their brand, such as their social media reputation. This is because, it is one of the major platforms customers have been using in recent times to reach out to companies, either to appreciate the product, recommend the service or give negative feedback.
And it only takes one post to have a huge impact on your company’s sales, either in a positive or negative way.