The implementation of Communication Value Circle (CVC) for the corporate management strategy
- Charles&Co.
- Mar 14, 2023
- 7 min read
Topic: The implementation of Communication Value Circle (CVC) for the corporate management strategy (A Case Study).
Aim: Getting involved of communication value for developing a company to reach the goals in terms of sales and branding by using framework which is align with the corporate management strategy.
This is focus on the internal processing through the communication role which is by the action of the leadership on sending the information to the employees about the goals of the company, the top table can control the employees by make the bottom line understand about the goals to achieve the target.
Case example: In 2002, Wal-Mart Stores Inc. became the number one retailer in the U.S. and based on fortune.com, Wal-Mart is 500 listing the top business and it was recently ranked number one in sales in Fortune Magazine (Wal-Mart took in $220 Billion in revenue in 2001). The success of the Wal-Mart is because the company keep on track or consistent with the CEO’s core message of the company which is selling for less, respecting employees and communities and align with the corporate strategy as follows:
1. Dominance in the Retail Market 2. Expansion in the U.S. and International Markets 3. Creation of Positive Brand and Company Recognition 4. Branch Out into New Sectors of Retail
Based on the example, The Communication Value circle or CVC can be useful for the professional communication to gain the value of communication in corporate strategy. It means that the elements under the communication value circle can prove the alignment of communication goals and communication target or even the performance indicators in a company for instance; for building the intangible assets, the company should focus on the brands which is mirrored by customers satisfaction and recognition. The focus of this discussion is will looking out about measuring communication value by using communication to build intangible assets which are about reputation, brand, and corporate culture. This proposal will be narrower and focus on the 3rd of Wal-Mart corporate strategy which is creation of positive brand and company recognition. This means that the aims of the 3rd strategy is to create positive impression of customers satisfaction with the Wal-Mart Brand itself and how far the brand can survive on customers behaviour to be recognise.
Discussion:
The Implementation of Communication Value Circle (CVC)
Brands:
Volk, Berger, Zerfass, Bisswanger, Fetzer, Köhler, (2017, p.25) stated that, “Brands are valuable immaterial assets and help companies to distinguish themselves from their competitors”. Brand as a part of Communication value circle elements aiming the brand image as the key performance indicators and it align with Wal-Mart corporate strategy to create a positive brand in the market. According to Interbrand's "Best Retail Brands" report 2014, Wal-Mart is the most valuable brand in North America with estimated at $131.8 billion. It makes Wal-Mart stayed in the 1st top rank of U.S. retail brands and followed by others big brands which are as competitors such as Target ($27.123 billion), The Home Depot ($25.696 billion), Amazon ($23.620 billion), CVS/pharmacy ($17.779 billion), Walgreens ($15.519 billion), Sam’s Club ($13.543 billion), eBay ($13.162 billion), Coach ($11.588 billion), Publix ($10.157 billion). All the results released by using the Interbrand - brand valuation methodology which pointed out the elements of CVC and where focus on brands can results in brand loyalty (consumers behaviour) and boost sales (Volk et. al 2017).
Figure 1: Reasons for brand valuation
Zerfass & Viertmann (2016) stated that starting point of a company or organizational decisions should take is corporate strategy. It means that corporate strategy must be considering as first step to make it clear how to achieve the target in the future. The corporate strategy of Wal-Mart was clear explained by the founder and need strong commitment from internal sector to have same idea of what the success image that top table draw. As Wal-Mart applied in the corporate strategy including internal and external point of view as core of the framework (CVC) with the communication role, Wal-Mart trying to control their internal sector such as employees and the external sector such as stakeholders and investors to keep in straight line of corporation. Barret as cited in Husain (2013) argued that, “meaningful communication informs and educates employees at all levels and motivates them to support the strategy”. Leaders come through this process to get communication value and setting up an important role for the employee. However, to avoid the rumours and negatives aspect of the communication, the leader must be avoiding poor management of communication and have to create proper line of communication process (DiFonzo et al., 1994; Smelzer & Zener 1992 as cited in Huzain, 2013).
In terms of creation positive brand that Wal-Mart try to achieve, it clearly be seen that Zerfass & Viertmann (2016) statement that the successful of a corporate in not only from stakeholder but also from relationship of the brand with employees, politicians, regulators, customers, mass media, social media influencers, and many other stakeholders. Michael T. Duke (The President and Chief Executive Officer of Wal-Mart Stores, Inc. 2011) said that, “The retailer that respects individuals, puts customers first, strives for excellence, and is trusted, will win the future”. His statement proved that where top table core message is very important to overcome company goals in the short and long term.
By using the communication value circle (CVC) company can create a process for finding gap between corporate and communication goals to fix all missed understanding of core message from top table (Volk et. al 2017). Moreover, if the company experience misalignment in terms of achieving the target, communication value circle is the best way to detect and refocus by having the communication management to deliver the information. The core message from the top table must be perfectly understood by all bottom line or internal team in a company. Strahan (2015) believed that effective communication skills with each other is a requirement for all level of organization. Strahan statement clearly show that where top table can handle communication skills in an organization, it can affect employees to stand on the right path.
Vance as cited in Wal-Mart Annual Report (2011) described that Wal-Mart trying to deliver good understanding for all employees and bottom line by provide training for having same standard of service and information in every internal level. This is a real involve of communication role which is included in corporate strategy to have same perspective of company goals and also to avoid misalignment in the future. By having clear communication in top-down and bottom-up line, Wal-Mart want to achieve idea-sharing and cross information between employees and top table because Wal-Mart giving an image of their employees to be familiar known as “associates” so that bottom line can give their voice to the top table.
Communication value circle cover up Wal-Mart corporate strategy, looking more details on communication value that Wal-Mart apply to their corporate management is focus on how company build intangible assets. Based on Volk et. al (2017) statement, communication will help to create intangible assets such as reputation, brands or corporate culture. Those assets are important to support company create their internal value to be visible by stakeholder or customers, for instance, Wal-Mart create family oriented on internal company for all employees and respecting the communities by giving award for those who are dedicated their worktime with Wal-Mart. Employees commitment clearly as an intangible asset and here again, commitment of employees can boost company performance. Communication department in Wal-Mart should manage the reputation because to create a strong identity of a company, not only positive reputation but also strong brands are relevant to the company, Volk et. al (2017).
In Addition, Wal-Mart added company recognition together with creation positive brand as their corporate strategy is more or less means being recognise in the eye of customer or market. Doug McMillon (President and Chief Executives Officer, Wal-Mart Store, Inc. 2016) stated that, “Our plan to win is clear. It starts with unparalleled assets that only Walmart has – our 2.3 million people; more than 11,500 retail locations; e-commerce websites and apps; and a dynamic, optimized supply chain”. From the statement of total retail location around the world and roughly number of people, it clear that to get a company recognition is one step closer. Wal- Mart advert their brand by using key term of “low price everyday” to get more attention from customers and being recognise among target market. The strength of communication environment of Wal-Mart that the leader (top table) try to construct, can make the company be able to understand what their customers need and wants. The external factor which is customers have a big impact on Wal-Mart market growth, on this part give an idea that retail brand should have the ability to capture and get opportunities from customer’s point of view. To make the brand been recognize, Wal-Mart expand the marketing system and advertising with Hollywood movie and music company in terms of spread the reputation as well as the promotions (www.walmart.com, 2001 Annual Report, and Quinn 115).
To sum up, the internal communication team in a company will help increase the understanding of company goals which come from the top table and distribute by using communication system. The implementation of communication value circle in terms of building intangible assets that Wal-Mart applied is more about reputation, brand, and corporate culture which can be clear visible if top table can drive healthy communication environment to deliver core message and less gap between goals and corporate strategy.
-----------------------------------------------------------------------------------------------------------------------------
Reference:
Hayden, P., Lee, S., McMahon, K. and Pereira, M., 2002. Wal-Mart: Staying on top of the fortune 500: A case study on Wal-Mart stores Inc. The Graduate School of Political Management, George Washington University.
Husain, Z., 2013. Effective communication brings successful organizational change. The Business & Management Review, 3(2), p.43.
Strahan, S.M., 2015, July. Increase the value of an internal communication team by embedding communication planning into a business unit's strategic planning process. In Professional Communication Conference (IPCC), 2015 IEEE International (pp. 1-8). IEEE.
Viertmann, C., 2016. Communication Value Circle – Ein Modell für die Systematisierung von Unternehmens- und Kommunikationszielen. Schweizerische Fachtagung Communications Controlling. Leipzig University.
Volk, S. C., Berger, K., Zerfass, A., Bisswanger, L., Fetzer, M., Köhler, K., 2017. How to play the game. Strategic tools for managing corporate communications and creating value for your organization (Communication Insights, Issue 3). Leipzig, Germany: Academic Society for Corporate Management & Communication.
Wal-Mart Annual Reports, 2011.
Wal-Mart Annual Reports, 2016.
Wal-Mart Celebrates Associate Contributions with Bonuses and New Initiatives to Reward Performance and Service, 2007
Zerfass, A. and Viertmann, C., 2016, May. Creating Business Value through Corporate Communication. In CONFERENCE ON CORPORATE COMMUNICATION 2016.
Comentários