marketing strategy mkt 460
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Marketing Strategy MKT 460. Chapter 3 Environmental Analysis Taufique Hossain. Learning Objectives. To define the marketing environment and discuss the relevant types of market information that are required for market scanning and analysis. - PowerPoint PPT PresentationTRANSCRIPT
Marketing strategy
Chapter 3
Environmental Analysis
Taufique HossainMarketing StrategyMKT 460Learning ObjectivesTo define the marketing environment and discuss the relevant types of market information that are required for market scanning and analysis.
To review the analytical models and frameworks that can be used in the analysis stage.EnvironmentMacro-environmentSocial, political, economic, technological contexts
Competitive environmentCompany, immediate competitors, customers
Internal environmentResources, capabilities
3PEST Analysis of the Macro-EnvironmentPoliticalEconomicSocialLegalTechnologicalThe Economic and Political EnvironmentEconomic growth rates and the business cycleInterest rates, consumer and business confidenceEmployment and unemploymentTaxation and fiscal policyNational and supra-national governmentsRegional trade and trading areasInternationalisation and globalisation5The Social and Cultural EnvironmentDemographic ChangeThe Grey MarketThe Youth MarketMulti-ethnic societiesChanging life-styles and living patterns6Technological EnvironmentTechnological changes impact every industry
Shortening of commercialization times
Short product life cycles
Impact of internet7Legal EnvironmentLaws, regulations and codes of practice emanating from national governments, EU, local governments, statutory bodies, trade associations etc.8New Strategies for Changing EnvironmentsGlobal positioning
The master brand
The integrated enterprise and end user focus
Best in class processes
Mass customization
Breakthrough technology9The Shift in Strategy for Delivering Shareholder ValueFocus on core competenciesPortfolio approachesDomestic focusGlobal focusThe new strategic imperativeAnalysis of the Competitive EnvironmentPorters five forces model
Strategic groups
Industry evolution and forecasting
Environmental stability11Five Forces Driving CompetitionRivalry among existing firms in the industryThreat of new entrantsThreat of substitutesBargaining power of buyersBargaining power of suppliersSource: Adapted from Porter (1986, 1988)Rivalry Among Existing FirmsCompetitors are roughly evenly balanced
Low market growth
Exit barriers are high
Product differentiation is low
Fixed costs are relatively high13Threat of Market EntryCosts of entry are low
Existing or new distribution channels are open to use
Little competitive retaliation is anticipated
Differentiation is low
There are gaps in the market
14Threat of SubstitutesMaking existing technologies redundant
Incremental product improvement15Bargaining Power of SuppliersSuppliers are more concentrated than buyers
Costs of switching suppliers are high
Suppliers offerings are highly differentiatedBargaining Power of BuyersMore concentrated than sellers
Alternative supply sources are readily available
Buyer switching costs are lowStrategic GroupsFirms within an industry following similar strategies aimed at similar customers or customer groups
E.g. Coca cola and Pepsi18 Map of Strategic Groups in the US Automobile MarketDegree of SpecialisationBroad lineNarrow lineLocal ContentHighLowThe Big ThreeGM, Ford, ChryslerThe SamuraiToyota, Nissan, Honda, Mazda The Faded ChampionsVW Audi, Rover GroupLuxury carsMercedes, BMW,Volvo*, Saab*Jaguar*SpecialistsRolls-Royce*, Ferrari*, Aston Martin*, Lamborghini*, Lotus*,Morgan, McLaren(*brands now owned by large-scale American or European manufacturers)19Industry Evolution
ReadingHooley et al. Chapters 3 and 6.
Day and Schoemaker (2005), Scanning the Periphery, Harvard Business Review, 83, 11, pp. 135-148. Kangis and OReilly (2003), Strategies in a Dynamic Marketplace: A Case Study in the Airline Industry, Journal of Business Research, 56, pp. 105-111.