Step 2. Analyze Internal Environment Tool To Identify Ability to Compete in Market
Steps in Analyzing Environment • Identify Competitor (s). • Identify internal factor (s). / Focus on relevant skills, resources, and assets in the industry. • Classify as strength or weakness & estimate magnitude of strength/weakness. • Evaluate importance of factor and its impact on ability to compete.
2. Identify Internal Factor(s): Skills, Resources, and Assets • Market • Market Share • Sales or Share Growth Rate • Competition • Product, promotion, price, distribution factors relative to competition • Financial & Economic • Margins • Profits • Economies of scale
2. Identify Internal Factor(s): Skills, Resources, and Assets • Technological • Ability to cope with change • Technological skills • Patent Protection • Sociopolitical • Responsiveness & flexibility to environmental change
2. Identify Internal factor(s): Sample Skills & Assets & Resources • To develop innovative new products • To assure quality via precision manufacturing • To manage large advertising budgets • To obtain dealer cooperation in display & retail promotion • Long term contractual arrangements • Complementary products that enhance value of main product • Customized product specifications or ordering systems that simplify reordering • Intellectual property rights • Brand equity • Sales force • Access to raw materials • Distribution
Determine Whether You have Strength (Competitive Advantage) to Go Against the Competition David vs. Goliath or TenderCare vs. P&G, Kimberly Clark?
Competitive Advantage • Determines success • Supported by assets & skills • Valued by customers • “Competition-proof” • Substantial Adjusts to environmental changes • Promotable to customers
Types of Competitive Advanage • Lowest Delivered price • Superior product benefits • Superior customer service • Established brand name or company reputation for quality • Innovative features or options • Better spatial availability to the buyer (due to delivery policies or distribution locations)
Competitive Advantage in Diaper Industry • What are key competitive advantage(s) in the diaper industry? • Will Tender Care have any competitive advantage? If so, what?