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SITUATIONAL ANALYSIS
The situational analysis is used to develop an optimal strategy to reach goals and objectives.
Often referred to as SWOT; it is used to derive competitive advantage
SITUATIONAL ANALYSIS
Assess organizational strengths and weaknesses by using Ansoff’s Grid of Competences
ANSOFF’S GRID OF COMPETENCES
A 4 x 4 matrix that classifies skills & resources against functional areas.
Skills and Resources: R&D, General Management, Operations, Marketing
Functional Areas: facilities and equipment, personnel skills, organizational capabilities, management capabilities
COMPETITION
STRENGTHS &WEAKNESSES
STRATEGIC POSTURE
PAST PERFORMANCE
MARKETINGEFFECTIVENESS
MARKETINGENVIRONMENT
MEASUREMENT OF STRENGTHSAND WEAKNESSES (158/159)
STRENGTHS: EXAMPLES (Text, pg 169)
Leadership in innovationAbility to influence legislationEfficient, low cost facilitiesAvailability of capitalCustomer loyaltyDominant market shareQuality sales forceMake and sell quality products
POLITICAL / LEGALManagerial Questions
What changes in regulations are possible? How will they impact demand for my product?
What political risks exist in countries the firm wishes to expand to?
POLITICAL / LEGALMethods of Analysis
Analysis of regulationsEnvironmental monitoringPublic opinion polls
SOCIAL/CULTURAL/DEMOManagerial Questions
What trends are emerging where the firm is operating?
How would these trends impact the demand for existing products or help create new products?
What trends of population growth & movement are emerging?
How would these impact the firm?
SOCIAL/CULTURAL/DEMOMethods of Analysis
Content analysis of popular press
Lifestyle analysisGeneral purpose consumer
surveysCensus data / projections
ECONOMICManagerial Questions
What are the economic prospects in the markets where the firm currently operates or plans to operate in the future?
How would they affect the business?
TECHNOLOGICALManagerial Questions
What are some emerging technologies that will affect the current products and their processes?
What are the life-cycle trends of the current technologies?
SITUATIONAL ANALYSIS
Competitor Analysis What are the strengths, weaknesses and limitations of our competitors?
ANALYZING THE COMPETITION
Identify key competitorsAnalyze performance recordAssess current satisfactionIdentify marketing strategyAnalyze resources and
competenciesPredict future behavior
COMPETITOR’S OBJECTIVES
The parent’s objectives what are they overall importance of SBU how successful has the parent been in the past
FUTURE BEHAVIOR
What is their current level of satisfaction?
How likely will they change?How effectively can the
competitor respond to environmental changes?
GATHERING COMPETITIVE INFORMATION
Recruits and employees of competing firms
CustomersPublished materials and
public documentsObservation Trash analysis
“THE COMPETITION”
“The essence of strategy formulation is coping with competition.” (Porter)
We must be broad minded when looking at “the competition.”
FIVE FACTOR MODEL OF MARKET PROFITABILITY
POTENTIALENTRANTS
POWER OFSUPPLIERS
SUBSTITUTEPRODUCTS
POWER OFBUYERS
EXISTINGCOMPETITORS
THREAT OF POTENTIAL ENTRANTS
Barriers to Entry Incumbents’ cost advantages Product differentiation Capital requirements Access to distribution channels Government policies Switching costs
POWER OF SUPPLIERS
Suppliers can be powerful if: industry is dominated by a few suppliers
the industry of the customer is not important to the supplier group
POWER OF BUYERS
Buyers can be powerful if they: are few purchase in large volumes earn low profits can find alternative suppliers
SUBSTITUTE PRODUCTS
Substitute products limit the potential earnings of an industry by placing a ceiling on prices it can charge.
RIVALRY AMONG EXISTING COMPETITORS
Rivalry will be intense if: competitors are numerous/identical in size
the product or service lacks differentiation
there is high investment intensity
FROM THE INTERNET
University of Arizona Libraries http://
dizzy.library.arizona.edu/ library/teams/slrp/csa/csa-html /csa_home.htm