Week 5 Spring 2014

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    Important Announcement & Lets

    Breathe !!!

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    Quiz 3 : Time (30 Minutes)Please

    mention your complete Name and

    Enrolment number.

    Of

    the

    three

    environments

    that

    we

    discussed

    last

    time

    ,

    Which

    one

    is

    the

    most

    important

    in

    a

    General

    Sense?

    Why?

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    X

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    Environment

    SWOTPESTLEX

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    Defining the SWOT?

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    SWOT analysis (alternately SWOT Matrix) is

    a strategic planning method used to evaluate

    the Strengths, Weaknesses/Limitations, Opportun

    ities, and Threats involved in a project or in

    a business venture.(Wikipedia,2012)

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    The SWOT !!! Developed in the 1960-70s

    Credited to Albert Humphrey

    From Stanford University

    He Used Data from Fortune 500 Companies

    Objectives are always set after conducting the

    SWOT

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    Strength Weaknesses

    Opportunities Threats

    Helpful Harmful

    Internal

    External

    Source:( Xhienee, 2012)

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    Strengths Brand Name

    Industry Ranking

    Patents and Processes

    Management

    Alliances

    Employee Commitment

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    Weaknesses Lack of Strategic Direction

    Limited Financial Resources

    Weak R & D Spending

    Narrow Product Line

    Limited Distribution Out of Date Product or Technology

    Poor Marketing

    Alliances with weak firms

    Under Trained Employees

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    Opportunities Market Growth

    Rival Firms collapse /Complacent

    Changing Customer Needs

    Opening of Foreign Markets

    New Segments

    Economic Boom

    New Technology

    Government Deregulation

    Demographic Shifts

    New Distribution Method

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    Threats Entry of Foreign Firms

    Substitute Products

    PLC Decline

    Changing Customer Needs

    Rival Firms adopt new Strategies

    Increased Government Regulation

    Economic Downturn

    Foreign Trade Barriers

    Poor Performance of Ally Firms

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    Benefits of SWOT !!! Simple process which lowers costs

    No extensive training required

    Flexible-enhances strategic planning Integration-synthesizes qualitative & quantitative

    information

    Collaboration-encourages interdepartmentalcoordination

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    Stay focused

    Search extensively for competitors

    Collaborate with other functional areas

    Examine issues from the customers

    perspectives

    Separate internal issues from external issues

    Directives for a Productive SWOT Analysis

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    Focus on specific products & markets.

    Adapt the marketing mix to address

    environmental issues.

    Examine overall strategic business units.

    Make certain you have 1 SWOT analysis for

    each product/market combination.

    Keys to Staying Focused

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    Search Extensively for Competitors

    Do not overlook any competitor (current or

    future)

    Consider: Product competitors

    Generic competitors

    Total budget competitors

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    Examine Issues from the Customers Perspectives

    in the SWOT

    What do our customers believe about us as a company?

    What are their perceptions of:

    Product quality

    Customer service

    Price/value

    Promotional

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    Customer Segment Evaluations Should beBenchmarked

    Consider internal customers (employees)

    Consider all relevant stakeholders:

    Investors & stockholders

    Suppliers

    Customers

    Governmental

    Societal

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    SWOT-Driven Strategic Planning

    Utilizing a SWOT for strategic planning requires:

    Looking beyond the firmscurrent products

    Matching strengths with opportunities

    (translate strengths into capabilities) Investing in key areas: customer support,

    R&D, promotion, employee training)

    Converting weaknesses into strengths

    Understanding that weaknesses that cannotbe converted into strengths becomelimitations

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    Developing Sustainable Competitive

    Advantages

    Capabilities allow the firm to better serve

    customer needs (competitive advantage)

    Sources of competitive advantage:

    customer loyalty -brand equity -distribution

    patents & trademarks -sales force -culture

    Capabilities that do not solve customer needs

    are of little value Must have a core competency

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    How to Achieve a Competitive Advantage

    Operational excellence-efficiency

    Product leadership-research & development,technology, products

    Customer intimacy-relationship marketing

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    Strategies Converting Strengths or Threats into

    Opportunities

    Find new markets for a firms products

    (conversion strategy)

    May require significant financial resources

    Must identify major liabilities that continue tooccur

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    Minimize or Avoid Weaknesses or ThreatsWhich Cannot Be Converted

    Become a niche marketer

    Reposition the product

    Realize your limitations

    Diversify to minimize risks of operating in a single

    market

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    How could each of the following be astrength or weakness?

    Highest quality product in the industry

    Significant excess production capacity

    Excellent relationship with a single supplier Sizable amount of cash on hand

    Offering a product that is designed to suit

    everyones needs

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    10 Mins Break

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    Classroom activity : Lets Develop a

    SWOT

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    See you next week!!!