M Pharm+MBA PEST,SWOT,Porter's5 Forces,October 17th

8/3/2019 M Pharm+MBA PEST,SWOT,Porter's5 Forces,October 17th

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Inaugural LectureOctober 17th, 2011

Ashutosh Ojha

PEST Analysis, SWOT Analysis, Porters 5 Forces

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Ashutosh Ojha - 20112

Official e-mail id : [email protected]

e-mail id for one on one communications:

[email protected]

e-mail id for submitting assignments:

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Office : 022-4233 2069

Official e-mail id : [email protected]

e-mail id for one on one communications:

[email protected]

e-mail id for submitting assignments:

[email protected]

Mobile : 99677-18256
mailto:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]


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Marketing Environment and Marketing PlanningPEST Analysis, SWOT Analysis & Michael Porters Five Forces Model

ProductUnderstanding of Product Mix and Profit Mix. Product Life Cycle Concept,Implications of PLC on Marketing Mix Variables

PricingPricing Objectives, Pricing Strategies, Pricing Models, Pricing Methods

PromotionPromotion Decisions, Promotion and Pricing, Different types of Promotion

Market Segmentation / Target marketingMarket Segmentation, Criteria of Segmentation, Concept of Target Market

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PositioningDefinition of Positioning, Different types of Positioning, Positioning errors, Repositioning

Integrated Marketing CommunicationCommunication, Advertising Promotion, Media Planning

Consumer BehaviourDifferent Models of Consumer Behaviour, Buying Decisions, Buying Situations

Sales & DistributionSales Management General Concept, Selling Skills, Distribution Concept, ChannelManagement

Market Evaluation & Control,Marketing Audit,Marketing Evaluation, Marketing Control 4


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Planning is important forcorporates so that they have anoverall goal to a im for.What factors companies take into account forbuilding goals?

What are some of the tools that help informulating strategy: Environmental factors Competition Internal Strengths


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PEST analysis stands for Political Economic Social Technological analysis

A framework of macro-environmental factors used in the environmentalscanning component of Strategic Management Some analysts added

Legal Environmental factors Ethics Demographic factorsThe 21st century has given rise to widespread use of an updated version of the PEST framework

STEER analysis which considers Socio-cultural Technological Economic Ecological and Regulatory factors



STEER analysis systematically considers

Socio-cultural Technological

Economic Ecological and Regulatory factors.

Benefits It gives an overview of the different macro-environmental factors It is a useful strategic tool for understanding market growth or

decline, business position, potential and direction for operations.



Political factors :Tax policyLabour lawEnvironmental lawTrade restrictionsTariffs andPolitical stability.

Governments has great influence on the health, education and infrastructure of a nation.

Economic factorsEconomic growthInterest rates

Exchange rates andthe inflation rate eg.

Interest rates affect a firm's cost of capital and therefore to what extent a businessgrows and expands.

Exchange rates affect the costs of exporting goods and the supply and price ofimported goods in an economy
http://www.google.co.in/imgres?imgurl=http://jstidham.mediawest.com/tec105/TECfacetoface2/econlogo.jpg&imgrefurl=http://jstidham.mediawest.com/tec105/TECfacetoface2/TECfacetoface215.html&usg=__yr8cg0ezjaSEF7474qpX7Edbb4g=&h=204&w=413&sz=25&hl=en&start=1&zoom=1&itbs=1&tbnid=UljSqRFUXi_OiM:&tbnh=62&tbnw=125&prev=/search%3Fq%3Dthe%2Beconomist%2Blogo%26hl%3Den%26sa%3DG%26biw%3D1024%26bih%3D388%26gbv%3D2%26tbm%3Disch&ei=9hUaTvqCL5D5mAWTrf2BBg



Social factorsHealth consciousnessPopulation growth rateAge distributionCareer attitudes andEmphasis on safety

Age of the population (Shenzhen, Japan etc. example)

Technological factorsR&D activity

Automation technology incentives andThe rate of technological change

They can determine barriers to entryMinimum efficient production level andInfluence outsourcing decisions.

Furthermore, technological shifts can affect costs, quality, and lead to innovation.



Environmental factors

Include ecological and environmental aspects such as weather, climate, and climate change,which may especially affect industries such as tourism, farming etc.

Growing awareness of the potential impacts of climate change is affecting how companiesoperate and the products they offer.

Must watch :An Inconvenient Truththe Oscar-winning documentary on global warmingstarring former US vice-president Al Gore.

Legal factors

Discrimination law, consumer law, antitrust law, employment law, and health and safety law.These factors can affect how a company operates, its costs, and the demand for its products.

(Foxconn the Taiwanese Company that has a major base in Shenzhen making iPhones, iPadsetc)
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Strengths can be benchmarked using SWOT as an analysis

- Which can help in scenario planning- By seeing how internal (Strength and Weakness)

characteristics

- Interact with external (Opportunity and Threat)characteristics:

Strengt

h

Weakne

ss

Opportunity S x O W x O

Threat S x T W x T



S/W

Strat

Formu

Prog

Formu

ImplemFeedback

& ControlBusiness

Mission

Ext Env

Int Env

O/T

Goal

Formu

The Business Unit Strategy Formulation Process

A business unit must monitor key macroenvironmentforces and significant

microenvironmentfactors that effect its ability to earn profits.

SWOT analysis



Checkl ist for performing Strengths/Weaknesses Analysis

Finance

ManufacturingOrganization

Area

Performance Importance

Major Minor Neutral Major Minor

Strength Str Weak. Weak.

High Med Low

Marketing



The Indian Aviation Industry over thelast 3 decades

The Indian Pharma Industry vis--vistheir International practices andmodified Indian strategies



The Indian Aviation Industry



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The Indian Pharmaceuticals Formulations

IndustryThe Indian Pharmaceutical

Formulations Industry



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Competition and Environment cometogether with the companys strengths inPorters 5 forces.

This is an empirical framework developed by MichaelPorter who also developed generic strategies to playagainst each of the forces. This is what is the gatewaytowards more marketing oriented discussions.

Cost Leadership Strategy Differentiation Strategy Market Segmentation Strategy



Porters five forces model helps in accessing where thepower lies in a business situation.

Porters Model is actually a business strategy tool thathelps in analyzing the attractiveness in an industry

structure. It lets you access current strength of yourcompetitive position and the strength of the position thatyou are planning to attain.

Porters Model is considered an important part ofplanning tool set. When youre clear about where thepower lies, you can take advantage of your strengths and

can improve the weaknesses and can compete efficientlyand effectively.

Porters model of competitive forces assumes thatthere are five competitive forces that identifies thecompetitive power in a business situation. These five

competitive forces identified by the Michael Porterare:



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Threat of substituteproductsThreat of new entrantsIntense rivalry among

existing playersBargaining power of

suppliers


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1. Threat of substitute productsProfitable markets that yield high returns wil l attract newfirms.Many new entrants will decrease profitability for all firms in the industry

Most attractive segment : High barriers to entry and low exit barriers

Unless the entry of new firms can be blocked by incumbents,

the abnormal profit rate will tend towards zero (perfect

competition)

Profitable markets that yield high returns will attract new firms/entrants

Which eventually will decrease profitability for all firms in the industry

Unless the entry of new firms can be blocked by incumbents,


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2. Threat of new entrantsCustomers may consider switching to alternatives:

Buyer propensity to substitute

Relative price performance of substitute

Buyer switching costs

Perceived level of product differentiation

Number of substitute products available in the market

Ease of substitution


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3. Intense rivalry among existing playersFor most industries, the intensity of competitive rivalry is themajor determinant of the competitiveness of the industry.

Powerful competitive strategy

Sustainable competitive advantage through innovation

Competition between online and offline companies

Level of advertising expenses

Competitive rivalry is likely to be based on dimensions such asprice, quality, and innovation

Companies that are successful with introducing new technology,are able to charge higher prices and achieve higher profits,

until competitors imitate them.


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4. Bargaining Power of Suppliers

Suppliers of raw materials, components, labor, and services (such asexpertise to the firm can be a source of power over the firm,

when there are few substitutesSuppliers may refuse to work with the firm, or, e.g.,charge excessively high prices for unique resources

Degree of differentiation of inputs

Presence of substitute inputs

Supplier concentration to firm concentration ratio

Impact of inputs on cost or differentiation


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5. The bargaining power of customers (buyers)The bargaining power of customers is also described asthe market of outputs: the abi l i ty of customers to putthe firm under pressure, which also affects thecustomer's sensitivity to price changes.

Buyer concentration to firm concentration ratio

Buyer volume

Buyer information availability

Ability to backward integrate

Availability of existing substitute products

M k t E i t &


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Market Environment &

Marketing Planning

PESTAnalysisSWOTAnalysis

FiveForcesModel

Michael Porters

M Pharm+MBA PEST,SWOT,Porter's5 Forces,October 17th

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