The Marketing Environment and Competitor Analysis

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The Marketing Environment and Competitor Analysis. SWOT analysis PEST analysis Five forces analysis. SWOT analysis. Strengths (internal) Weaknesses (internal) Opportunities (external) Threats (external). SWOT ANALYSIS. - PowerPoint PPT Presentation

Transcript of The Marketing Environment and Competitor Analysis

  • The Marketing Environment and Competitor AnalysisSWOT analysisPEST analysisFive forces analysis

  • SWOT analysisStrengths (internal)Weaknesses (internal)Opportunities (external)Threats (external)

  • SWOT ANALYSISA SWOT analysis is an excellent tool to use if the organization wants to take a step back and assess the situation they are in. Issues raised from the analysis are then used to assist the organization in developing their marketing mix strategy. A SWOT analysis must form the part of any prudent marketing strategy.

  • SWOT AnalysisBased on assumption an effective strategy derives from a sound fit between a firms internal resources and its external situationOpportunitiesA major favorable situation in a firms environmentThreatsA major unfavorable situation in a firms environmentStrengthsA resource advantage relative to competitors and the needs of markets firm servesWeaknessesA limitation or deficiency in one or more resources or competencies relative to competitors

  • Strength examples could include:A strong brand name. Market share. Good reputation. Expertise and skill. Weaknesses could include:Low or no market share. No brand loyalty. Lack of experience.

  • Opportunities could include:A growing market. Increased consumer spending. Selling internationally. Changes in society beneficial to your company. Threats could include:Competitors Government policy eg taxation, laws. Changes in society not beneficial to your company.

  • PEST analysisPolitical factorsEconomic factorsSocio-cultural factorsTechnological factors

  • Political/legalMonopolies legislationEnvironmental protection lawsTaxation policyEmployment lawsGovernment policyLegislationOthers?

  • Economic FactorsInflationEmploymentDisposable incomeBusiness cyclesEnergy availability and costOthers?

  • Socio-cultural factorsDemographicsDistribution of incomeSocial mobilityLifestyle changesConsumerismLevels of educationOthers?

  • TechnologicalNew discoveries and innovationsSpeed of technology transferRates of obsolescenceInternetInformation technologyOthers?

  • *Porters Five Forces ModelIndustryCompetitorsRivalry AmongExisting FirmsSuppliersBargainingPowerof SuppliersPotential EntrantsThreat of New EntrantsBuyersBargainingPowerof BuyersSubstitutesThreat of Substitute Products or Services These five forces determine the profit potential of a particular industry

  • Five forces analysis

    One assumption of Porters five forces model is that some industries are inherently more attractive than others; that is, the profit potential for companies in that industry is higher. As this figure indicates, the interaction and strength of five forces influences profit potential.

  • The purpose of Five-Forces AnalysisThe five forces are environmental forces that impact on a companys ability to compete in a given market.The purpose of five-forces analysis is to diagnose the principal competitive pressures in a market and assess how strong and important each one is.

  • Threat of New Entrants

  • Bargaining Power of SuppliersSuppliers are likely to be powerful if:

  • Bargaining Power of BuyersBuyer groups are likely to be powerful if:

  • Threat of Substitute ProductsKeys to evaluate substitute products:

  • Rivalry Among Existing Competitors

  • Cut-throat competition is more likely to occur when:Rivalry Among Existing Competitors

  • Strategic Management in Action AnalyzingCurrentSituationDecidingon StrategiesPuttingStrategiesin ActionEvaluating andChanging StrategiesSituationAnalysisStrategyFormulationStrategyImplementationStrategyEvaluationExternalAnalysisInternalAnalysisOrganizational ContextFunctionalCompetitiveCorporate

  • The directional policy matrix (GE matrix)Investment and GrowthSelective GrowthSelectivitySelective GrowthSelectivitySelectivityHarvest Or DivestHarvest Or DivestHarvest Or DivestHigh Medium LowHigh

    Medium

    LowINDUSTRY ATTRACTIVENESSBUSINESS STRENGTH

  • Porter - the value chainPRIMARY ACTIVITIESSUPPORT ACTIVITIESFIRM INFRASTRUCTUREHUMAN RESOURCE MANAGEMENTTECHNOLOGY DEVELOPMENTPROCUREMENTINBOUNDOPERATIONSOUTBOUNDMARKETINGSERVICE LOGISTICSLOGISTICS& SALESM A R G I NM A R G I N(Source: M Porter)

  • Gap analysis - and what to do about it Sales/Profits (Rs.)TimeObjective

    Forecast

  • Strategic Alternatives1.Improve productivityReduce costsImprove the sales mixIncrease pricesReduce discountsIncrease productivity2.Market penetrationIncrease market shareIncrease usage frequencyIncrease purchase values3.Market developmentGeographical expansionFind new customer segments4.Product developmentDevelop new productsReconfigure existing products5.DiversificationNew products to new markets

    *One assumption of Porters five forces model is that some industries are inherently more attractive than others; that is, the profit potential for companies in that industry is higher. As this figure indicates, the interaction and strength of five forces influences profit potential.121518212526This slide illustrates the strategic management process and indicates how each chapter fits into the process. This slide provides an overview of the textbooks organization.