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Scanning the Environments

Faisal K. Qureishi
Internal Evaluation
Measuring Strengths and Weaknesses
Product Scope & Depth
Current Strategy
Past Performance
Strengths
Core competencies
Distinctive competencies
Competitive advantages
Weaknesses
Constraints
Competitive disadvantages
Pursuing a strategy not supported by
organizational design and culture
Evaluating Current Strategy

Underlying reasons for firms success (or failure)


Current scope of firms activities
Pattern of past and existing resource deployment
Critical factors affecting strategy
Trend and direction of likely changes in critical
factors
Performance criteria, emphasis, and priorities
Evaluation of Product/Market
What customers do we serve?
What is our market scope?
How is each market/product served?
What Customers Do We Serve?
Market segments
Demographic profile of each segment
Reasons customers buy
Anticipated changes in customers perspectives
What is Our Market Scope?
Geographic reach:
Global
Regional
National
Local
How Is Each Market Served?
Resource base
Channel relationships
Pricing strategies
Promotional strategies
Measuring Past Performance
Identify trends of:
ROI, price, revenue streams, profit etc.
Market Share
Total market
Customer equity
Performance Measures
Growth rate
Profitability
Cash flow
Customer retention/loss rate
Performance Standards
Company performance
Competitor performance
Management expectations
Customer expectations
Areas of Strength: Sources of CA
Excellent product design
Leader in product innovation
Efficient customer service
Effective sales promotion
Merchandising efficiency
Customer loyalty
Dominant market share
Successful branding/advertising
Strength-Opportunity Analysis
Matching strengths or competencies to
opportunities
Analyze impact of environment
Opportunities develop in environment
Marketing Weaknesses
Inadequate resource emphasis on
product/market development
No clear sense of vision/goal direction
Too many levels of reporting/not enough
empowerment to line managers
Scanning the
Marketing Environment
Overview:
Why Study of Environment is
Important?
Opportunities or Threats come from it.
Strategic fit is critical for success and
environmental scanning helps company keep in
touch
Marketing more then any other functional
department has the responsibility to carry
this out
Marketing Departments role is that of a boundary
spanner
Opportunities
Unmet needs are
opportunities
Opportunities can be found by
identifying trends
Trend is a direction or
sequence of events with
momentum and direction
Fads, Trends, Style, Taste and
Fashion?
What is the difference between fashion, style,
trend, fad and taste?
Anyone can have his/her own style in manner of living,
speaking, or dressing.
Celebrities come to mind famous for their distinct style
A style becomes a trend when it is accepted and adopted by a
substantial number of people
As the trend peaks, it is said to have assumed the position of a
mega-trend or fashion
Taste
Taste refers to the prevailing opinion of what is attractive and
appropriate for a given occasion or person
We speak of people having good or bad taste
Good taste is considered not only artistically pleasant but also
what is appropriate for a certain occasion or situation
Fad is a short-lived fashion that suddenly becomes popular
and quickly disappears
Generally, it affects a specific group in the population
It is non-utilitarian and impulsive in nature
Is It a Trend or a Fad?

A trend is a direction or sequence of


events that have some momentum and
durability.
Many Market Offerings are Created by
identifying trends.
The Marketing Manager needs to determine:
1. Does the new product fit with basic
lifestyle changes?
2. What are the benefits?
3. Can it be personalized?
4. Would it be a trend or a fad?
5. Who will adopt the change?
6. Who would resist to what extent?
Forces in the Environment

Macro vs Micro
Internal vs External
Controllable vs Uncontrollable
Factors in the External Environment
Ever-Changing
Marketing Marketplace
Mix
Social &
Cultural
Demographics

Natural Economic
Conditions

Competition Target
Market
Product Political &
Place Legal Factors
Promotion Technology
Price
Environmental
Scanning
External Environmental Factors (Macro)
Political & Fiscal Policy,
Interest Groups,
Political & Legal Consumerism,
Deregulation, Legislation,

Most Important due to


accelerated rate of
change. Unlimited
Technology opportunity for
innovators.
Raw material shortage,
increased energy cost,
pollution, depleting
Natural natural resources
External Environmental Factors (Macro)
Statistical Study of human
population: Gender,
Demographic regions, cities,ethnic etc
Interest rates, inflation,
Economic income distribution,
Conditions business cycle

Competition Closest Competitors are those


with similar marketing mix and
are called strategic group
Most difficult to change
Ultimate determinant of trends
Tolerant & Indulgent cultures
Social & Cultural
High / Low Context cultures
Lessons to learn

Adjust yourself to the external


environment
Use your strengths to avail
opportunities (SO) and to counter
threats (ST)
Overcome weaknesses and turn them
into strengths
Where do you want to sail: Red or Blue
Ocean
Avoid the Dinosaur Dilemma
RED vs BLUE OCEAN
RED OCEAN BLUE OCEAN
Compete in existing markets Look for/develop
Beat the competition uncontested markets
Explore existing demand Make competitors irrelevant
Strengthen the existing Explore latent demand
value proposition Create a new value
Seek competitive advantage proposition
in differentiation or low cost Seek competitive advantage
in differentiation with low
cost