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Marketing Strategy MKT 460 - PowerPoint PPT Presentation
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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.
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Learning Objectives
- 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.
Environment
- Macro-environment
- Social, political, economic, technological contexts
- Competitive environment
- Company, immediate competitors, customers
- Internal environment
- Resources, capabilities
The Economic and Political Environment
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 Grey Market
The Social and Cultural EnvironmentDemographic Change
Changing life-styles and living patterns
Multi-ethnic societies
Technological Environment
- Technological changes impact every industry
- Shortening of commercialization times
- Short product life cycles
- Impact of internet
Legal Environment
- Laws, regulations and codes of practice emanating from national governments, EU, local governments, statutory bodies, trade associations etc.
New Strategies for Changing Environments
- Global positioning
- The master brand
- The integrated enterprise and end user focus
- Best in class processes
- Mass customization
- Breakthrough technology
The Shift in Strategy for Delivering Shareholder Value
Focus on core competencies
The new strategic imperative
Domestic focus
Global focus
Portfolio approaches
Analysis of the Competitive Environment
- Porter’s five forces model
- Strategic groups
- Industry evolution and forecasting
- Environmental stability
Five Forces Driving Competition
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)
Rivalry Among Existing Firms
- Competitors are roughly evenly balanced
- Low market growth
- Exit barriers are high
- Product differentiation is low
- Fixed costs are relatively high
Threat of Market Entry
- 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
Threat of Substitutes
- Making existing technologies redundant
- Incremental product improvement
Bargaining Power of Suppliers
- Suppliers are more concentrated than buyers
- Costs of switching suppliers are high
- Suppliers’ offerings are highly differentiated
Bargaining Power of Buyers
- More concentrated than sellers
- Alternative supply sources are readily available
- Buyer switching costs are low
Strategic Groups
- Firms within an industry following similar strategies aimed at similar customers or customer groups
- E.g. Coca cola and Pepsi
Map of Strategic Groups in the US Automobile Market
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)
Reading
- 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.
