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The situation analysis. A University of Florida Presentation Abridged and Modified 2004/2005 by R. W. Bodo. The purpose of the situation analysis. Answers the why are we here? It provides a background on the factors that influence the company’s functions and performance.

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the situation analysis

The situation analysis

A University of Florida Presentation

Abridged and Modified 2004/2005 by

R. W. Bodo

the purpose of the situation analysis
The purpose of the situation analysis
  • Answers the why are we here?
    • It provides a background on the factors that influence the company’s functions and performance
elements of the situation analysis
Elements of the situation analysis
  • Problem identification
  • Situation analysis
    • Industry/Category
    • Company
    • Product
    • Competition
    • Market
    • Consumer
    • Other considerations: Legal, political...
problem identification
Problem identification
  • A brief statement that summarizes the core dilemma and/or challenge a company must overcome
industry category analysis
Industry/Category Analysis
  • What’s going on in the Industry?
  • What’s going on in the category?
  • Overall what does the situation portend for the clent?
macro environmental considerations
Macro-environmental considerations
  • Industry/category
    • Size of the market in general
    • Growth trends
  • Demographic trends
  • Economic trends
  • Technological issues
  • Political/legal issues
  • Socio/cultural trends
company analysis
Company analysis
  • What the company is concerned with
  • What it represents
    • Usually this information is found in mission and vision statements
company analysis cont
Company analysis (cont)
  • Company’s mission (Annual report)
  • History
  • Sales and profits
  • Market standing/category share
  • Product offerings
  • Key personnel
  • Capital resources
product analysis
Product analysis
  • Focuses on the abstract and concrete qualities of the company’s product
    • Product attributes/functions
    • Positioning/Brand personality
    • Cost/Margins
    • Price
    • Packaging
    • Distribution
    • Promotions used
    • Media spent
product life cycle new perspective golder and tellis msi report
Product Life Cycle New perspective - Golder and Tellis’ MSI Report
  • Informational cascades
    • Few buy a new product based on personal judgment but the majority base their decision on what they see others doing.
      • This leads to fast growth AND even faster declines of sales
        • Particularly true for leisure products (VCR) compared to time-saving products (Microwave).
  • Example: OnStar
competitive analysis
Competitive analysis
  • Considers all options consumers might think about in their purchasing decision
competition
Competition
  • Alternatives on a person’s mind when selecting a good to satisfy a need

Direct competitors

competitive analysis1
Competitive analysis
  • In what category does the product compete?
  • Who are the brand’s major direct competitors? Indirect competitors?
  • What is the competitor’s brand position?
  • What is the price of their product?
competitive analysis cont
Competitive analysis (cont)
  • What is the respective market share?
  • What is their communication strategy?
  • How much do they spend on media?
  • Where is competitive media spending concentrated?
market analysis
Market analysis
  • Helps planners identify which geographic areas are key
  • These areas are important due to:
    • The strong position the advertiser enjoys in the region
    • The problems associated with doing business in the region
market analysis development index
Market analysis: Development index
  • Brand development index (BDI)
  • Category development index (CDI)
  • If BDI>100
  • If CDI>100

% of a brand’s total US sales in a market x 100

% of total US population in a market

= BDI

% of a category’s total US sales in a market x 100

% of total US population in a market

= CDI

slide18
Brand development index (BDI)

% of a brand’s total US sales in a market x 100

% of total US population in a market

= BDI

Nestea Sweet Tea

% of sales % of pop

Florida 40% 10%

Texas 30% 30%

California 10% 20%

BDI(FL)= (40 x 100)/10 = 400

BDI (TX) = (30 x 100)/30 = 100

BDI (CA) = (10 x 100)/20 = 50

slide19

Category development index (CDI)

% of a category’s total US sales in a market x 100

% of total US population in a market

= CDI

Sweet Tea

% of sales % of pop

Florida 40% 10%

Texas 30% 30%

California 10% 20%

CDI(FL)= (40 x 100)/10 = 400

CDI (TX) = (30 x 100)/30 = 100

CDI (CA) = (10 x 100)/20 = 50

consumer analysis
Consumer analysis
  • Information that helps us gain a grasp on the (current/potential) consumer
  • Major questions to be answered
    • Who are they?
    • What motivates them to buy?
    • How do they use the product?
    • What is important to them in a product?
    • How do they look at life?
    • Where are they?
swot analysis

SWOT analysis

Advertising Strategy

what is a swot
What is a SWOT?
  • It is the organization and summary of the information obtained in the situation analysis:
    • The company’s
      • Strengths
      • Weaknesses
    • The environment’s
      • Opportunities
      • Threats
  • Answers the so what? Of the situation analysis
the purpose of a swot analysis
The purpose of a SWOT analysis
  • To define the main issues that must be addressed in the strategic plan
    • Clarifies opportunities
    • Identifies problems
  • Issues discovered in the SWOT will be used to define IMC objectives, strategies and tactics
a good swot
A good SWOT
  • Has a focus: Maybe more than one analysis
  • Searches extensively for competitors
  • Does not forget other areas of the company
  • Thinks as the consumer (internal/external)
  • Separates clearly internal from external sources
components of a swot
Components of a SWOT
  • A complete SWOT analysis consists of two components:
    • Strengths/Weaknesses analysis
    • Opportunities/Threats analysis
  • Study Exhibit 4.4 of SWOT chapter
strengths and weakness
Strengths and weakness
  • Internal factors reflect situation-based considerations within a company’s control
    • Key question:

What factors internal to the company influence the current situation?

strengths
Strengths
  • Strengths refer to what a company has done well or been successful at to date.
  • Examples
    • Dell’s ability to sell directly (Phone/Web)
    • Apple’s ability to come up with innovative designs
weaknesses
Weaknesses
  • Weaknesses refer to what a company needs to correct or that has worked to a company’s disadvantage to date.
  • Examples
    • Dell’s inability to create a mystique among users.
    • Apple’s relaxed culture made difficult to make the company work as a one unit.
opportunities and threats
Opportunities and threats
  • External factors reflect situation-based considerations beyond a company’s control
  • However, they have the potential to affect the future of the business
    • Key question

What variables in the external environment affect the company’s challenges?

opportunities
Opportunities
  • Opp. refer to external factors that may benefit the company if pursued.
  • Examples
    • Baby boomers’ waistlines are expanding, so demand for baggy pants is stronger.
    • A weak economy might make business people look for better airfares (Priceline.com)
threats
Threats
  • Threats refer to external variables that may negatively affect the company if ignored
  • Examples:
    • A negative legal environment for tobacco companies.
    • A weak economy might force business people to look for cheaper airfares (AA, Continental)
a short swot for kodak s disposable camera
A short SWOT for Kodak’s disposable camera

1

High priced

Lower priced brands are considered low quality

Photos are not a priority for this market

Brand is well known and trusted

2

3

4

a short swot for kodak
Bad image of DC - environmental issues

Market makes frequent spontaneous trips

Kodak’s DC offer the best film

Kodak doesn’t offer a panoramic camera

A short SWOT for Kodak

1

2

3

4