scanning the environment

7/27/2019 Scanning the Environment

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Scanning the Environments


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Internal Evaluation

Measuring Strengths and Weaknesses

Product Scope & Depth

Current Strategy

Past Performance


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Strengths

Core competencies

Distinctive competencies

Competitive advantages


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Weaknesses

Constraints

Competitive disadvantages

Pursuing a strategy not supported byorganizational design and culture


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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


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Evaluation of Product/Market

What customers do we serve?

What is our market scope?

How is each market/product served?


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What Customers Do We Serve?

Market segments

Demographic profile of each segment

Reasons customers buy

Anticipated changes in customers perspectives


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What is Our Market Scope?

Geographic reach:

Global

Regional National

Local


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How Is Each Market Served?

Resource base

Channel relationships

Pricing strategies

Promotional strategies


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Measuring Past Performance

Identify trends of:

ROI, price, revenue streams, profit etc.

Market Share

Total market

Customer equity


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Performance Measures

Growth rate

Profitability

Cash flow Customer retention/loss rate


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Performance Standards

Company performance

Competitor performance

Management expectations Customer expectations


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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


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Strength-Opportunity Analysis

Matching strengths or competencies to

opportunities

Analyze impact of environment

Opportunities develop in environment


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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


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Scanning theMarketing Environment


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Overview:Why Study of Environment is

Important?Opportunities or Threats come from it.

Strategic fit is critical for success andenvironmental scanning helps company keep in

touchMarketing more then any other functionaldepartment has the responsibility to carry

this outMarketing Departments role is that of a boundary

spanner


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Unmet needs are

opportunities

Opportunities can be found byidentifying trends

Trend is a direction orsequence of events with

momentum and directionFads, Trends, Style, Taste and

Fashion?

Opportunities


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What is the difference between fashion, style,

trend, fad and taste?

Anyone can have his/her own stylein manner of living,

speaking, or dressing.

Celebrities come to mind famous for their distinct style

A style becomes a trendwhen 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


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Taste

Tasterefers 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

Fadis 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

d d?


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Is It a Trend or a Fad?

The Marketing Manager needs to determ ine:

1. Does the new product fit with basiclifestyle 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 resistto what extent?

A trend is a direction or sequence ofevents that have some momentum anddurability.

Many Market Offerings are Created byidentifying trends.


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Forces in the Environment

Macro vs Micro

Internal vs External

Controllable vs Uncontrollable

h l


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Factors in the External Environment

Demographics

Social &Cultural

EconomicConditions

Political &Legal Factors

Technology

Competition

Ever-ChangingMarketplace

ProductPlace

PromotionPrice

Environmental

Scanning

Marketing

Mix

TargetMarket

Natural


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External Environmental Factors (Macro)

Political & Legal

Technology

Natural

Political & Fiscal Policy,

Interest Groups,Consumerism,

Deregulation, Legislation,

Raw material shortage,increased energy cost,

pollution, depletingnatural resources

Most Important due toaccelerated rate ofchange. Unlimited

opportunity forinnovators.


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External Environmental Factors (Macro)

Economic

Conditions

Demographic

Competition

Social & Cultural

Statistical Study of human

population: Gender,regions, cities,ethnic etc

Closest Competitors are thosewith similar marketing mix and

are called strategic group

Interest rates, inflation,income distribution,

business cycle

Most difficult to change

Ultimate determinant of trends

Tolerant & Indulgent cultures

High / Low Context cultures


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Lessons to learn

Adjust yourself to the externalenvironment

Use your strengths to avail

opportunities (SO) and to counterthreats (ST)

Overcome weaknesses and turn them

into strengthsWhere do you want to sail: Red or Blue

Ocean

Avoid the Dinosaur Dilemma


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REDvsBLUEOCEAN

RED OCEAN

Compete in existing markets

Beat the competition

Explore existing demand

Strengthen the existing

value proposition

Seek competitive advantage

in differentiation or low cost

BLUE OCEAN

Look for/develop

uncontested markets

Make competitors irrelevant

Explore latent demand

Create a new value

proposition

Seek competitive advantagein differentiation withlow

cost

scanning the environment

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