marketing management (part 2: marketing environment analysis)
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Marketing Environment Analysis
Nguyen Hai Ninh. Dr.
Hanoi Foreign Trade University – International Business Department
Cell: (+84) 0915139839
Email: nguyen.haininh@hotmail.com
Corporate’s Internal environment
Economic Environment
Political Environment
Socio – Cultural Environment
Technological Environment
Competition Environment
Marketing Environments
Corporate’s internal SWOT Analysis • Acronym of Strengths, Weaknesses,
Threats and Opportunities
• Created by Albert Humphrey – leader of Stanford Uni’s project research in the decade of 1970s
• Popular used in strategic business and project planning.
• Analyze corporate's internal and external environment and resources.
Internal v/s External • Strengths and Weaknesses
o Are the corporate’s internal factors (HR, Capital, fixed assets, technologies..)
o Mostly related to current situation
• Opportunities and threats
o Are the corporate’s external factors
o Related to the impacts from the external environments (competitors, government policies, consumers’ behaviors, partners and market)
Strengths • Things you/your business is good at
• Provide a clear competitive advantage over rivals (competitors)
• Distinctive/core competencies and resources
• Should be protected and built upon.
• Some possible strengths: Market share, Technology, Economies of scale, Leadership, Brand reputation and loyalty, High quality, Financial resources, R&D..
To identify the strengths, ask…
• What advantages does your company have?
• What do you do better than anyone else?
• What unique or lowest-cost resources do you have access to?
• What do people in your market see as your strengths?
• What factors mean that you "get the sale"?
Weaknesses • Things you/your business lacks or does poorly
• A source of competitive disadvantage à Places the business at a disadvantage
• May hinder or constrain the business in achieving proposed objectives
• Should seek ways to reduce or eliminate weaknesses before exploiting further competition
• Some possible weaknesses: Low market share, undifferentiated, outdated technology, poor quality, lack of innovation, a weak brand name, High costs…
To identify the weaknesess, ask…
• What could you improve?
• What should you avoid?
• What are people in your market likely to see as weaknesses?
• What factors lose you sales?
Opportunities • Things that create the chance to make greater profits or get better
business results.
• Arises when an organization may take benefits from the external environment.
• Should be recognize the opportunities to improve the business situation.
• Opportunities always coming along with the risks
• Possible opportunities: Technology, higher economic innovation growth, new demand, new market, trade liberalization, market growth/diversification, social or lifestyle change, government spending programs.
To identify the opportunities, ask…
• Where are the good opportunities facing you?
• What are the interesting trends you are aware of?
Threats • Things may harms or trouble you/your business
• Any external factors that may hinder or prevent you/ your business from achieving proposed objectives or place the business at risks.
• Threats are not controllable
• Some possible threats: New market entrants , economic downturn, change in consuming behaviors, the rise of low cost tastes or needs production abroad, higher or unstable input sources/prices, new regulations, competitive pressure
To identify the threats, ask…
• What obstacles do you face?
• What are your competitors doing?
• Are quality standards or specifications for your job, products or services changing?
• Is changing technology threatening your position?
• Do you have bad debt or cash-flow problems?
• Could any of your weaknesses seriously threaten your business?
Why you need SWOT analysis?
• Help decision maker and strategic planner understand clearly about corporate’s internal/external situation
• Analyze the issues/problems which may lead to success/failure.
• Prevent costly mistakes
When you need SWOT analysis
• Changing business direction/perspective
• New product launching/new market entering
• Decision making
• Competition evaluation
• New business strategic planning
Carry your findings forward - Make sure that the SWOT analysis is used in subsequent planning. Revisit your findings at suitable time intervals.
Create a workshop environment - Encourage an atmosphere conducive to the free flow of information.
Allocate research & information gathering tasks - Background preparation can be carried out in two stages – Exploratory and Detailed. Information on Strengths & Weaknesses should focus on the internal factors & information on Opportunities & Threats should focus on the external factors.
Select contributors - Expert opinion may be required for SWOT
Establish the objectives - Purpose of conducting a SWOT may be wide / narrow, general / specific.
Evaluate listed ideas against Objectives - With the lists compiled, sort and group facts and ideas in relation to the objectives.
List Strengths, Weaknesses, Opportunities, & threats
How to conduct the SWOT Analysis?
Strengths • … • …
Weaknesses • … • …
Opportuni*es • … • …
Threats • … • …
SWOT Analysis layouts
Mistakes of SWOT
• An unclear goal
• Developing long lists.
• Labeling items "strengths” even if you aren’t any better than the competition.
• Conducting biased assessments.
• Confusing strategies and opportunities. A strategy is an action. An opportunity is an event or condition that exists independent of your actions.
• Ignoring the internal and external environment factors identified when evaluating strategies
Tips
• Be realistic
• Be specific and fair in evaluation.
• Keep your SWOT analysis short and simple. Avoid the complexity
• Distinguish between where your organization is today and where it could be in the future
SWOT à TWOS
• By analyzing the external environment (threats and opportunities), and your internal environment (weaknesses and strengths), you can use these techniques to think about the strategy of your whole organization
• Think about a process, a marketing campaign, or even your own skills and experience • Use TWOS analysis to answer these following questions:
• Make the most of your strengths? • Circumvent your weaknesses • Capitalize on your opportunities? • Manage your threats?
Formulate strategies from SWOT
• SO strategy: Strengths and Opportunities – Use Strengths to take advantages of opportunities
• WO strategy: Weaknesses and opportunities – Over come weaknesses by taking advantages of opportunities
• WT strategy: Weaknesses and Threats: Minimize the Weaknesses and avoid Threats
• ST strategy : Strengths and Threats – Use strengths to avoid
External Opportunities (O) 1. 2. 3.
External Threats (T) 1. 2. 3.
Internal Strengths (S) 1. 2. 3.
SO "Maxi-Maxi" Strategy
Strategies that use strengths to maximize opportunities.
ST "Maxi-Mini" Strategy
Strategies that use strengths to minimize threats.
Internal Weaknesses (W) 1. 2. 3.
WO "Mini-Maxi" Strategy
Strategies that minimize weaknesses by taking advantage
of opportunities
WT "Mini-Mini" Strategy
Strategies that minimize weaknesses and avoid threats.
Self - Awareness Activity • Work in group (at home)
• Do the SWOT, TWOS analysis for your product/service and your proposed business.
• Present your analysis on class (10 min/each)
Pest Analysis Harvard professor Francis Aguilar is the creator of PEST Analysis. He included a scanning tool called ETPS
This helps you understand the "big picture" forces of change that you're exposed to, and, from this, take advantage of the opportunities that they
• Helps you to spot business or personal opportunities • Gives you advanced warning of significant threats. • Helps you to shape what you're doing, so that you work with
change, rather than against it. • Helps you to avoid starting projects that are likely to fail • It can help you break free of unconscious assumptions when
you enter a new country, region, or market; because it helps you develop an objective view of this new environment.
PEST Analysis is useful because….
There are variations of PEST Analysis that bring other factors into consideration: • PESTLE/PESTEL: Political, Economic, Socio-Cultural, Technological, Legal,
Environmental. • PESTLIED: Political, Economic, Socio-Cultural, Technological, Legal, International,
Environmental, Demographic. • STEEPLE: Social/Demographic, Technological, Economic, Environmental, Political,
Legal, Ethical. • SLEPT: Socio-Cultural, Legal, Economic, Political, Technological. • LONGPESTLE: Local, National, and Global versions of PESTLE. (These are best used
for understanding change in multinational organizations.)
Other versions of PEST
Country analysis • Work in group (at home)
• Make the report about your selected country’s pestle analysis
• Submit next week
Competitor analysis
Always competitors! Purpose:
• Identify top competitors à Knowing the rules of game • Obtain information about important competitors à Determine strengths/weaknesses of each
competition • Using that information to predict competitor behavior à Develop strategies based on analysis to
increase success
• Companies with a product/service addressing similar needs • Products/services considered to be close substitutes • Don’t define too narrowly • Analyzing broader competitors allows for innovation maximization
Who are competitors?
Substitute Products
Apple - Ipad Mini Samsung - Galaxy Note 2 Microsoft - Surface
Profile of Competitors’: Background, Finances, Products..
Competitive Analysis Framework Michael Porter’s 4 components competitive matrix
• Competitors’ Objectives • Competitors’ Assumptions • Competitors’ Strategies • Competitors’ Capabilities
Purposes of the matrix: • What drives the competitors? • What is the competitor capable of doing?
Competitor’s Objectives • Growth rate • Market share/position • Technology • Finance • Organizational Structure • Social role
Competitor’s Assumptions • Past experience with a product • Industry Trends • Future beliefs about a competitor • Regional Factors
Competitor’s Strategies • Number of workers • Current products and services • Physical changes in a company’s office • Location of company • Type of customers • Target market and target customer • Type and name of suppliers • New construction or remodeling • Advertising or marketing campaigns
What is the competitor currently doing?
• What is the competitor capable of? • What is it not capable of? • Refer to SWOT analysis
• Reveals how companies CAN act
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Competitor’s Capabilities & Resources
Boxing Activity • Work in group (On class)
• Doing the competitor analysis for your group’s product/service
• 30 minutes allowed/ Present on class
All the effort of your corporation should amplify your marketing message
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