Marketing Strategy MKT 460 - PowerPoint PPT Presentation

Marketing StrategyMKT 460

Chapter 3

Environmental Analysis

Taufique Hossain

• To 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.

• Macro-environment
• Social, political, economic, technological contexts
• Competitive environment
• Company, immediate competitors, customers
• Internal environment
• Resources, capabilities

Economic

Social

Political

Technological

Legal

Economic growth rates and the business cycle

Interest rates, consumer and business confidence

Employment and unemployment

National and supra-national governments

Taxation and fiscal policy

Internationalisation and globalisation

Regional trade and trading areas

The Youth Market

The Grey Market

Demographic Change

Changing life-styles and living patterns

Multi-ethnic societies

• Technological changes impact every industry
• Shortening of commercialization times
• Short product life cycles
• Impact of internet

• Laws, regulations and codes of practice emanating from national governments, EU, local governments, statutory bodies, trade associations etc.

• Global positioning
• The master brand
• The integrated enterprise and end user focus
• Best in class processes
• Mass customization
• Breakthrough technology

Focus on core competencies

The new strategic imperative

Domestic focus

Global focus

Portfolio approaches

• Porter’s five forces model
• Strategic groups
• Industry evolution and forecasting
• Environmental stability

Threat of new entrants

Bargaining power of suppliers

Rivalry among existing firms in the industry

Bargaining power of buyers

Threat of substitutes

Source: Adapted from Porter (1986, 1988)

• Competitors are roughly evenly balanced
• Low market growth
• Exit barriers are high
• Product differentiation is low
• Fixed costs are relatively high

• Costs 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

• Making existing technologies redundant
• Incremental product improvement

• Suppliers are more concentrated than buyers
• Costs of switching suppliers are high
• Suppliers’ offerings are highly differentiated

• More concentrated than sellers
• Alternative supply sources are readily available
• Buyer switching costs are low

• Firms within an industry following similar strategies aimed at similar customers or customer groups
• E.g. Coca cola and Pepsi

The Faded Champions

VW Audi, Rover Group

The Big Three

GM, Ford, Chrysler

Broad line

The Samurai

Toyota, Nissan,

Honda, Mazda

Degree of Specialisation

Luxury cars

Mercedes, BMW,

Volvo*, Saab*

Jaguar*

Specialists

Rolls-Royce*, Ferrari*,

Aston Martin*,

Lamborghini*, Lotus*,

Morgan, McLaren

Narrow line

High

Low

Local Content

(*brands now owned by large-scale American or European manufacturers)

• Hooley et al. Chapters 3 and 6.
• Day and Schoemaker (2005), ‘Scanning the Periphery’, Harvard Business Review, 83, 11, pp. 135-148.
• Kangis and O’Reilly (2003), ‘Strategies in a Dynamic Marketplace: A Case Study in the Airline Industry’, Journal of Business Research, 56, pp. 105-111.