Learning Objectives

At the conclusion of this report, students will be able to:

 Recall what is environmental scanning.

 Determine and interpret the other environmental scanning tools.

 Interpolate a SWOT Analysis.

 Learn how to use Quadrants for Strategic Decisions.

Recap
Every organization has an internal and external environement. In order for the
organization to be successful, it is important that it scans it environment regularly to
assess its developments and understand factors that can contribute to its success.

ppt. ENVIRONMENTAL SCANNING is a process used by organizations to monitor

their external and internal environments and help the manager to decide the future path
of the organization.

Environmental Scanning

______________________________________

Internal External

(Task Environment) SWOT Analysis (Macro Environment)

QuEST

Quick Environmental Scanning Technique)

Micro Macro

PORTER PESTLE
1. Threats of new entrance Political
2. Threats of substitute Economic
3. Bargaining power of suppliers Social
4. Bargaining power of buyers Technological
5. Competitive rivalries Legal
Environment
BRAND POSITIONING

Way back in 1969, a very perceptive marketer named Jack Trout introduced the
concept of brand positioning to the world.

Ppt. What’s a firm to do? How do you compete when there’s barely room to breathe?

That’s where brand positioning comes in. It refers to the process of establishing the
image or identity of a brand or product so that consumers perceive it in a certain way.

Ppt. Definition: Brand positioning is the process of setting your business apart from
your competitors in a way that builds preference for you among your target audience. Its
goal is to associate your firm with an idea or category in the minds of people who might
buy your services.

Example: “Soft drink” “pop”

Discussion: Did Coke or Pepsi come to your mind? These two products are positioned
to dominate the soft drink category.

Another example: “Online Shopping”

Discussion: What online shopping business does make you think of? Shoppee or

Lazazada.

In theory, any professional services firm can build a strong association between their
brand and an idea. But to be successful, your positioning must be:

Ppt.

1. Different
Discussion: It’s tough to take over a leadership position already held by another
business.
2. Visible
Discussion: If nobody has heard of your firm, your positioning can’t take you.

Ppt. Why Brand Positioning Is Important?

 When you have a well-defined brand position, your firm has many advantages.
ppt Positioning can provide a conceptual template for your brand, your marketing
messages, the services you offer and even the way you structure your pricing.

Ppt. Types of Brand Positioning

1. Cost-driven positioning. “We offer everything those other firm do, but we cost
less.”
Discussion: This is a very challenging strategy unless you have an inherent cost
advantage. Technology can be your best friend if you are using it more effectively
than your competitors or worst enemy if you are behind others in a cost-driven
strategy.
2. Niche service specialization. In this strategy, you focus on offering a service
that is not widely available through competitors. You offer specialized expertise
that, presumably, a generalist would not have. This approach can work well
unless the service begins to generate strong demand and new competitors
emerge to dilute your “specialness.”

Example: Lefty’s: The Left Hand Store

Identifying an underserved community in a large market is a smart way to approach
niche marketing. Like Divvies, Lefty’s: The Left Hand Store found a widely underserved
community of people – those who favor their left hand instead of their right hand.

Because 90% of the population uses its right hand, left-handers have widely had to
adjust to using products designed for “righties.” Lefty’s saw this as an opportunity. They
created a store that sells products designed exclusively for the other 10% and found
success reaching this smaller, often ignored audience.

3. Industry specialization. This is a popular and often effective way to position a

professional services firm. It is another form of specialized expertise, and it
allows you to tightly focus your marketing and evolve your services as your
market changes. The implication of industry specialization is that your firm has
deep experience working with similar businesses. This approach comes with
risks, however. If your industry experiences economic decline, your fortunes may
 follow. It is also easy for new competitors to enter the fray and disrupt your
positioning.
4. Role-focused specialization. “We help CEOs succeed” is an example of role-
focused positioning — targeting a particular function in the organization. Instead
of specializing in a particular industry or service, you target a cohort of people.
These buyers will perceive you as more tuned in to their needs and expect that
you offer specific knowledge or expertise that will make their job easier.
5. Quality of service positioning. This is one of the most common strategies used
by professional services firms, and (with rare exceptions) it is one of the least
effective. “Nobody’s more committed to quality,” “we deliver the best service” and
similar messages are so ubiquitous in the marketplace that they utterly fail to
impress buyers. Of course, buyers do want quality and customer service — but
these traits are table stakes and they are rarely criteria used to select a firm.

Ppt. The Brand Positioning Process

Step 1. Start with your overall business imperatives. What are you trying to
accomplish as a firm? Your positioning is a fundamental pillar of business strategy, and
it affects how you drive growth and attract the talent you need to sustain your
expansion. If you don’t have your business goals written down already, sit down with
your management team and make sure everyone has a clear set of priorities. That way,
when you begin formulating your positioning statement you will a clear destination in
mind.

Step 2. Research your target clients and competitors. Brand research can also
identify strengths and weaknesses you weren’t able to see before. In addition, you’ll
learn what factors potential clients value most during the selection process.

And brand research is critical to the success of the next step.

Step 3. Identify your differentiators. This is where your business goals and brand
research turn into marketing gold. Drawing on the insights of your team, external
perceptions of your firm and a new understanding of your competitors’ positioning, you
will pick out characteristics that both set you apart from your competition and are
valuable to prospective clients at the time they select a firm.

Often you will uncover proof in your brand research (for example, a finding that “9 out
10 clients refer us to others” is a nice statistic to reinforce a variety of differentiators).

Step 4. Craft your brand positioning statement. Now it’s time to translate your
differentiators into a story that clearly communicates your competitive advantage. A
positioning statement distills your key buying propositions into a short paragraph. It’s an
internal document — because it is compact it’s not intended to be used verbatim on
your website or in your marketing materials. Instead, think of it as a source you can
return to again and again when you need inspiration to describe your firm or persuade
people to buy from you.

A brand positioning statement can take two different forms: a crafted paragraph or a
prompted statement. Developing a crafted paragraph takes more skill and time, but
some firms find that it translates more easily into marketing messages. A prompted
statement is quicker and simpler to assemble — your team fills in the blanks with the
appropriate information.

Here’s an example of a positioning statement in paragraph form:

Newco is the nation’s leading IT consultancy that specializes in law firms and legal
departments. Our team of attorneys, engineers, CIOs, executive directors and project
managers is uniquely positioned to make your practice more productive and profitable.
We’re familiar with the hundreds of software applications used by the legal community,
and we’ve developed a suite of tools that makes migrating and configuring systems
faster and more efficient. We also have a reputation for doing a job once and doing it
right — that’s why 4 out of 5 clients put us on long-term contract. When you need the
best legal IT advice and support, Newco is the easy choice.

And here’s what a prompted statement template, ready to be filled out, looks like:

SUMMARY:

A positioning strategy is when a company chooses one or two important key

areas to concentrate on and excels in those areas. A firm's positioning strategy focuses
on how it will compete in the market. An effective positioning strategy considers the
strengths and weaknesses of the organization, the needs of the customers and market
and the position of competitors. The purpose of a positioning strategy is that it allows a
company to spotlight specific areas where they can outshine and beat their competition.

Ppt. BOSTON CONSULTING GROUP (BCG) MATRIX

is developed by Bruce Henderson of the Boston Consulting Group in the early

1970’s  According to this technique, business or products are classified as low or high
performance depending upon their market growth rate & relative market share.

Discussion: To understand the Boston Matrix you need to understand how market share
& market growth interrelated.

Market share is the percentage of the total market that is being serviced by your
company measured either in the revenue terms or unit volume terms.
RMS = Business Unit Sales this year / Leading Rival Sales this year

The higher your market share, the higher proportion of the market you control.

MARKET GROWTH RATE is used as a measure of a market’s attractiveness.

Individual Sales this year – Individual sales last year MGR = Individual Sales last year

Markets experiencing high growth are ones where the total market share available is
expanding & there is plenty of opportunity for everyone to make money

It is portfolio planning model which is based on the observation that company’s

business unit can be classified in to four categories .  Question Marks  Stars  Cash
cows  Dogs It is based on the combination of market growth & market share relative to
the next based competitor.

1. QUESTION MARKS/PROBLEM CHILDREN ( HIGH GROWTH, LOW MARKET

SHARE)  Most business start of as question marks  They will absorb great
amount of cash if the market share remains unchanged (low)  Question marks
have potential to become star & evenly cash cow but can also become dog. 
Investment should be high for question marks.
2. STARS (HIGH GROWTH, HIGH MARKET SHARE)  Stars are leader in
business  They also require heavy investment to maintain its large market share.
 It leads to large amount of cash consumption & cash generation.  Attempts
should be made to hold the market share otherwise the star will become a cash
cow.
3. CASH COWS ( LOW GROWTH, HIGH MARKET SHARE)  They are foundation
of the company & often the stars of yesterday.  They generate more cash than
required  They generate more cash than required.  They extract the profits by
investing as little cash as possible  They are located in an industry that is mature
not growing or declining
 4. DOGS (LOW GROWTH, LOW MARKET SHARE)  Dogs are the cash traps 
Dogs do not have potential to bring  High cost – Low quality  Business is
situated at a declining stage.

WHY BCG MATRIX?

To asses:

1. Profile of product /business

2. Cash demands of products
3. The development cycle of product
4. Resource allocation & divestment decisions

BENEFITS BCG matrix is simple & easy to understand .

1. It helps to quickly & simply screen the opportunity open to you, & help you think
about how you can make the most of them.
2. It is used to identify how corporate cash resources can best be used to
maximize company’s future growth & profitability.

LIMITATION BCG matrix uses only two dimensions relative market share & market
growth rate. Problem of getting data on market share & market growth .
CONCLUSION

Though BCG matrix has its limitation it is one of the most famous & simple
portfolio planning matrix, used by large companies having multi-products.
CORE COMPETENCIES MODEL

The Core Competencies Model was introduced by two business management

theorists called Hamel and Prahalad. They introduced the model in a 1990 paper called,
The Core Competence of the Corporation.

Discussion: Many people believe that strategy is about competing to be the best. But it
isn’t. It’s about competing to be unique.

Ppt. It is in shaping your uniqueness where the core competencies model can be
of service.

1. UNIQUE means that competitors aren’t doing it.

2. IMPORTANT means that it is fundamental to helping the company generate
sales.
3. STRATEGICALLY WELL means that it’s difficult for competitors to copy.

Examples of Core Competencies

To bring the theory to life let’s look at some examples of real companies and their core
competencies.

Apple’s core competencies are its user-centered design along with its integrated
software and hardware ecosystem. The design is so strong that it is practically
impossible for competitors to create laptops that can sell for a similarly high price.

BMW’s core competency is that everything it does is underpinned by its active driving
design philosophy. This has resulted in a long history of unique, high-performance cars.
Even if a competitor can match speed performance, speed alone does not create the
“ultimate driving experience”. This makes it extremely hard for competitors to compete.

Ppt. VALUE CHAIN ANALYSIS

The idea of a value chain was first suggested by Michael Porter (1985) to depict
how customer value accumulates along a chain of activities that lead to an end product
or service. Porter describes the value chain as the internal processes or an activity a
company performs to design, produce, market, deliver and support its product.

Discussion: It represents the internal activities a firm engages in when transforming

inputs into outputs.

Ppt. Value chain analysis (VCA) is a process where a firm identifies its primary and
support activities that add value to its final product and then analyse these activities to
reduce costs or increase differentiation

The value chain contains two types of activities:

Primary activities : Where most of the value for customers is created.

Support activities: That facilitate performance of the primary activities.

Primary Activities:

• Inbound logistics: Material handling and warehousing.

• Operations: Transforming inputs into the final product.

• Outbound logistics: Order processing and distribution.

• Marketing and sales: Communication, pricing and channel management

• Service: Installation, repair and parts.

Support activities:

● Procurement: Purchasing of raw materials, supplies and other consumable items as

well as assets.

● Technology development: Know-how, procedures and technological inputs needed in

every value chain activity.

● Human resource management: Selection, promotion and placement, appraisal,

rewards management development and labour or employee relations.

● Firm infrastructure: General management, planning, finance, accounting, legal,

government affairs and quality management.

How VCA is Used

 Activity Analysis: First, you identify the activities you undertake to deliver your
product or service;

 Value Analysis: Second, for each activity, you think through what you would do to
add the greatest value for your customer; and

 Evaluation and Planning: Thirdly, you evaluate whether it is worth making changes,
and then plan for action.

Limitations of Value Chain Analysis:

Difficulty in implementation and interpretation

Problem of Traditional Accounting system

Difficulty in decision making

QUADRANTS FOR STRATEGIC DECISIONS

Quadrants are very versatile as they can be designed with different goals and situations
in mind. They consist of two axis, representing a set of conflicting interests or aspects,
forming a table with four cells. The labels of the axis and the cells depends on the
purpose of the quadrant analysis.

Urgent vs. Important Quadrant

Discussion: Former US President Eisenhower is known to have said: “What is important

is seldom urgent and what is urgent is seldom important.” This is reflected in a popular
quadrant design, often referred to as “The Eisenhower Matrix”, used to effectively
prioritize tasks according to their urgency and importance.

This is one of the most elegant tools to help a group collectively define their priorities. It
clearly sorts items into four lists with different recommended actions.

The Urgent vs Important Quadrant will let your group take a list of tasks and
quickly identify which ones they collectively deem as both urgent and important. These
are the tasks that should be prioritized the highest, and get done right away.

Tasks that are deemed to be important, but not urgent, are strategic tasks you should
schedule enough time to plan for and execute later.

Tasks that are urgent, but not important should be re-assessed, and if still deemed
urgent, they can be delegated to others.
Tasks that are neither urgent nor important are not very productive or useful tasks, and
should either be deleted or be addressed at a later time.
Effort vs Impact Quadrant

Another very useful quadrant type is the Effort vs Impact Quadrant, which helps you
prioritize projects and initiatives based on their predicted effort and impact.

Group members assess a list of projects and initiatives according to how much effort
they think they will require, and how much impact they will have on the overall
organization or product.

Projects that are deemed to require low effort, but have high impact, are identified as
“Quick Wins” that should be pursued.

Other projects that will have high impact, but are deemed to also require high effort, are
labelled “Major Projects”. These need significant focus and resources, so it is
recommended to only focus on one or a couple major projects at the time.

Projects that requires low effort, and results in low impact, are labelled “Fill in Jobs”, and
should be done mainly if they have some tactical impact over time.

Finally, projects that requires high effort but have low impact are labelled “Thankless
Tasks” and are often not worth the effort it takes to do them.

SWOT Analysis

A SWOT analysis is a compilation of your company's strengths, weaknesses,

opportunities and threats.

The primary objective of a SWOT analysis is to help organizations develop a full

awareness of all the factors involved in making a business decision.
This method was created in the 1960s by Albert Humphrey of the Stanford Research
Institute, during a study conducted to identify why corporate planning consistently failed.
Since its creation, SWOT has become one of the most useful tools for business owners
to start and grow their companies.

Questions that can help inspire your analysis

Here are a few questions that you can ask your team when you’re building your SWOT
analysis. These questions can help explain each section and spark creative thinking.

Strengths

Strengths are internal, positive attributes of your company. These are things that are
within your control.

What business processes are successful?

What assets do you have in your team, such as knowledge, education, network, skills,
and reputation?

What physical assets do you have, such as customers, equipment, technology, cash,
and patents?

What competitive advantages do you have over your competition?

Weaknesses

Weaknesses are negative factors that detract from your strengths. These are things that
you might need to improve on to be competitive.

Are there things that your business needs to be competitive?

What business processes need improvement?

Are there tangible assets that your company needs, such as money or equipment?

Are there gaps on your team?

Is your location ideal for your success?

Opportunities

Opportunities are external factors in your business environment that are likely to
contribute to your success.

Is your market growing and are there trends that will encourage people to buy more of
what you are selling?

Are there upcoming events that your company may be able to take advantage of to
grow the business?

Are there upcoming changes to regulations that might impact your company positively?

If your business is up and running, do customers think highly of you?

Threats

Threats are external factors that you have no control over. You may want to consider
putting in place contingency plans for dealing them if they occur.

Do you have potential competitors who may enter your market?

Will suppliers always be able to supply the raw materials you need at the prices you
need?

Could future developments in technology change how you do business?

Is consumer behavior changing in a way that could negatively impact your business?

Are there market trends that could become a threat?

Example of a SWOT analysis

DISCUSSION: To help you get a better sense of what at SWOT example actually looks
like, we’re going to look at UPer Crust Pies, a specialty meat and fruit pie cafe in
Michigan’s Upper Peninsula. They sell hot, ready-to-go pies and frozen take-home
options, as well as an assortment of fresh salads and beverages.

The company is planning to open its first location in downtown Yubetchatown and is
very focused on developing a business model that will make it easy to expand quickly
and that opens up the possibility of franchising. Here’s what their SWOT analysis might
look like:

What to do next?

With your SWOT analysis complete, you’re ready to convert it into real strategy.
 Uper Crust Pies: Potential strategies for growth

1. Investigate investors. UPer Crust Pies might investigate its options for obtaining
capital.

2. Create a marketing plan. Because UPer Crust Pies wants to execute a specific
marketing strategy—targeting working families by emphasizing that their dinner option is
both healthy and convenient—the company should develop a marketing plan.

3. Plan a grand opening. A key piece of that marketing plan will be the store’s grand
opening, and the promotional strategies necessary to get UPer Crust Pies’ target
market in the door.