Week 9

Marketing opportunity analysis and environmental scanning

Environmental analysis – it involves a total analysis of company’s situation

External environmental analysis

- The company must analyze its external environment to determine the opportunities and
threats.
- The two representations
 Possibility / opportunities
 Constraints/ threats
Five forces competition model of M.E Porter (1980)
1. Extent of industry rivalry
2. Bargaining power of buyers
3. Bargaining power of supplier
4. Threat of new entrants
5. Threat of substitutes
To interpret an industry analysis, one must determine whether the industry is:
 Attractive
 Unattractive
Internal Environment analysis
- company also must conduct internal environmental analysis to identify the company’s strength
and weaknesses, as well as current and possible marketing actions, to determine which
opportunities it can best pursue.
Strategic managers should identify the variables within their company that may be important
strengths and weaknesses. Strategic managers can scan and analyze strategic variables by the
following one or a combination of three distinct approaches:
 PIMS Analysis
 Value Chain Analysis
 Functional Analysis
Situation Analysis Using SWOT
- Identifies a corporation distinctive competence.
- Distinctive competence refers to the particular skills and resources a firm possesses and the
superior way in which the are used. ( R. Reed and R.J. DeFilipi, 1990).
 The Swot Matrix
Strengths (S) Weaknesses (W)
Internal
Factors List 5-10 internal Strength List 5-10 internal weaknesses

External here here

Factors
Opportunities (O) SO Strategies
Generate strategies here that
List 5-10 external
use strength to take
advantage of opportunities
opportunities here
Threats ST Strategies
List 5-10 external Threats Generate strategies here that
here use strength to take
advantage to avoid threats
WO Strategies
Generate strategies here that
take advantage of
opportunities by overcoming
weaknesses
WT Strategies
Generate strategies here that
Minimizing weaknesses and
avoid threats

Market and Market Segmentation

- This is divided the market into smaller groups with distinctive needs, characteristics, or
behaviors who might require separate products or marketing mixes.
There are six (6) methods of segmentation market -Grewal and Levy (2012)
1. Geographic Segmentation
2. Demographic Segmentation
3. Psychographic Segmentation
4. Geo-demographic Segmentation
5. Benefits Segmentation
6. Behavioral Segmentation
There are five (5) requirements for effective segmentation – Kotler et al, (2005)
1. Measurable
2. Accessible
3. Substantial
4. Differentiating
5. Actionable