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Things to Know . . . Chapter 2 : Environment Analysis

Things to Know . . . Chapter 2 : Environment Analysis. Goals and limitations External environment - Competitor environment - Customer environment Internal environment. Need for Environmental Analysis. Eliminate surprises Position the organization in the environment

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Things to Know . . . Chapter 2 : Environment Analysis

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  1. Things to Know . . . Chapter 2 : Environment Analysis • Goals and limitations • External environment - Competitor environment - Customer environment • Internal environment

  2. Need for Environmental Analysis • Eliminate surprises • Position the organization in the environment • Identify current strategic issues • Detect signals for change

  3. Goals of Environmental Analysis • Classify information • Identify and analyze current issues • Detect weak signals of emerging issues • Speculate on likely future issues • Provide organized information • Foster strategic thinking

  4. Limitations of Environmental Analysis • No one can foretell the future • Can’t envision everything • Pertinent and timely information is difficult and sometimes impossible to obtain

  5. Limitations of Environmental Analysis (con’t) • Delays between events and management’s ability to interpret • Inability of the organization to respond quickly enough • Managers’ strongly held beliefs inhibit them from detecting issues or interpreting them rationally

  6. Environmental Analysis Process • Scanning to identify signals for change • Monitoring identified issues • Forecasting future direction of issues • Assessing organizational implications of issues

  7. General Environment • Business organization • Educational institutions • Government institutions • Health care organizations • Religious institutions • Research organizations and foundations • Individuals / Consumers

  8. Information in the Environment • Technological • Social / Cultural / Ethical • Regulatory • Political • Economic • Competitive

  9. Marketing intermediaries Marketing planning system Marketing information system Product Place Price Suppliers Publics Marketing organization and implementation Promotion Marketing organization system Competitors Marketing Environment Demographic environment Physical environment Target customers Economy Technology Political/ legal environment Social/ cultural environment

  10. Secondary-Data Sources • Internal Sources • Government Publications • Periodicals and Books • Commercial Data • On-Line • Associations • Business Information

  11. Observational Focus-group Survey Behavioral Experimental Research ApproachesPrimary Data Collection

  12. Research Instruments • Questionnaires • Mail • Telephone • Personal Interviews • Psychological Tools • Physiological Tools • Qualitative Tools

  13. Importance of Industry Analysis • Development of competitive advantage • External analysis is often too broad • Changes in the environment • Strategic Group

  14. Purpose of Industry Analysis • Understanding of competitors • Identify vulnerabilities of competitors • Assess impact of own actions • Identify moves of competitors • Develop competitive advantage

  15. Impediments to Industry Analysis • Misjudging industry definition • Poor identification of competitors • Faulty assumptions about competitors • Paralysis by analysis

  16. Industry Analysis Process • Define the industry categories • Industry structure analysis (Porter) • Threat of new entrants • Bargaining power of buyers • Bargaining power of suppliers • Threat of substitutes • Rivalry among firms

  17. Industry Analysis Process (cont’d) • Competitor analysis • Strengths, weaknesses, strategies • Critical success factors • Strategic groups • Map competitors • Determine competitor actions or responses • Synthesize the analysis

  18. Potential Entrants (Threat of Mobility) Suppliers (Supplier power) Industry Competitors (Segment rivalry) Buyers (Buyer power) Substitutes (Threats of substitutes) Porter’s Five Forces

  19. Intensity of Competition • Number of sellers - degree of differentiation • Entry, mobility, exit barriers • Cost structure • Degree of vertical integration • Degree of globalization

  20. Objectives Competitor Actions Strategies Reaction Patterns Strengths & Weaknesses Analyzing Competitors

  21. Customers • Segmentation process • Target market(s) • Market mix to satisfy customers • CRM

  22. Internal Analysis • Internal environmental analysis • Strengths • Weaknesses • Mission, vision, values and strategic goals

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