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MARKETINGCASESTUDY2004.3CASESTUDYFRAMEWORKIntroductionExternalanalysis-MacroExternalanalysis-MicroInternalanalysisSWOTIanalysisRedefinitionoftheproblemGoalAlternativesolutionsMotivatedchoiceImplementationMarketingenvironmentanalysisMacroenvironmentanalysis(External)Microenvironmentanalysis(External)InternalenvironmentanalysisExternalanalysis:Macro&MicroPESTanalysisFiveforcesanalysisConsumeranalysisSupplieranalysisStakeholderanalysisPESTanalysisPolitical/legalMonopolieslegislationEnvironmentalprotectionlawsTaxationpolicyEmploymentlawsGovernmentpolicyLegislationOthers?EconomicFactorsInflationEmploymentDisposableincomeBusinesscyclesEnergyavailabilityandcostOthers?Socio-culturalFactorsDemographicsDistributionofincomeSocialmobilityLifestylechangesConsumerismLevelsofeducationOthers?TechnologicalNewdiscoveriesandinnovationsSpeedoftechnologytransferRatesofobsolescenceInternetInformationtechnologyOthers?ThreatofNewEntrants(I)Economiesofscale(minimumsizerequirementsforprofitableoperations)HighinitialinvestmentsandfixedcostsCostadvantagesofexistingplayersduetoexperiencecurveeffectsofoperationwithfullydepreciatedassetsBrandloyaltyofcustomersProtectedintellectualpropertylikepatents,licensesetcScarcityofimportantresources,e.G.QualifiedexpertstaffThreatofNewEntrants(II)AccesstorawmaterialsiscontrolledbyexistingplayersDistributionchannelsarecontrolledbyexistingplayersExistingplayershaveclosecustomerrelations,e.g.Fromlong-termservicecontractsHighswitchingcostsforcustomersLegislationandgovernmentactionThreatofSubstitutesBrandloyaltyofcustomersClosecustomerrelationshipsSwitchingcostsforcustomersTherelativepriceforperformanceofsubstitutesCurrenttrendsBargainingPowerofSuppliers(I)Themarketisdominatedbyafewlargesuppliersratherthanafragmentedsourceofsupply.Therearenosubstitutesfortheparticularinput.Thesupplierscustomersarefragmented,sotheirbargainingpowerislow.Theswitchingcostsfromonesuppliertoanotherarehigh.BargainingPowerofSuppliers(II)Thereisthepossibilityofthesupplierintegratingforwardsinordertoobtainhigherpricesandmargins.Thisthreatisespeciallyhighwhen:-Thebuyingindustryhasahigherprofitabilitythanthesupplyingindustry.-Forwardintegrationprovideseconomiesofscaleforthesupplier.-Thebuyingindustryhindersthesupplyingindustryintheirdevelopment(e.g.Reluctancetoacceptnewreleasesofproducts).-Thebuyingindustryhaslowbarrierstoentry.BargainingPowerofCustomers(I)Theybuylargevolumes,thereisaconcentrationofbuyers.Thesupplyingindustrycomprisesalargenumberofsmalloperators.Thesupplyingindustryoperateswithhighfixedcosts.Theproductisundifferentiatedandcanbereplacesbysubstitutes.Switchingtoanalternativeproductisrelativelysimpleandisnotrelatedtohighcosts.BargainingPowerofCustomers(II)Customershavelowmarginsandareprice-sensitive.Customerscouldproducetheproductthemselves.Theproductisnotofstrategicalimportanceforthecustomer.Thecustomerknowsabouttheproductioncostsoftheproduct.Thereisthepossibilityforthecustomerintegratingbackwards.CompetitiveRivalrybetweenExistingPlayersTherearemanyplayersofaboutthesamesizePlayershavesimilarstrategiesThereisnotmuchdifferentiationbetweenplayersandtheirproducts,hence,thereismuchpricecompetitionLowmarketgrowthrates(growthofaparticularcompanyispossibleonlyattheexpenseofacompetitor)Barriersforexitarehigh(e.g.expensiveandhighlyspecializedequipment)FiveForcesAnalysis:KeyQuestionsandImplications•Whatarethekeyforcesatworkinthecompetitiveenvironment?•Arethereunderlyingforcesdrivingcompetitiveforces?•Willcompetitiveforceschange?•Whatarethestrengthsandweaknessesofcompetitorsinrelationtothecompetitiveforces?•Cancompetitivestrategyinfluencecompetitiveforces(egbybuildingbarrierstoentryorreducingcompetitiverivalry)?Internalanalysis5Manalysis:MenMoneyMachineryMaterialminutesSWOTIanalysisStrengths(internalanalysis)Weaknesses(internalanalysis)Opportunities(externalanalysis)Threats(externalanalysis)Issues(gettingfromSWOT)Opportunitymatrix1432SuccessProbabilityHighLowLowHighThreatmatrix1432ProbabilityofOccurrenceHighLowLowHighFouroutcomesAnidealbusinessHighinmajoropportunityandlowinmajorthreatAspeculativebusinessHighinbothopportunityandthreatAmaturebusinessLowinbothopportunityandthreatAtroublebusinessLowinmajoropportunityandhighinmajorthreatChecklistforperformingstrengths/weaknessanalysisMarketingCompanyreputation;marketshare;customersatisfaction;customerretention;productquality;servicequality;pricingeffectiveness;promotioneffectiveness;salesforceeffectiveness;innovationeffectiveness;geographicalcoverageFinanceCostoravailabilityofcapital;cashflow;financialstabilityManufacturingFacilities;economiesofscale;capacity;able,dedicatedworkforce;abilitytoproduceontime;technicalmanufacturingskillOrganizationVisionary,capableleadership;dedicatedemployees;entrepreneurialorientation;flexibleorresponsiveRedefinitionoftheproblemConclusionoftheSWOTIanalysisFindouttheproblem(s)youwillfocusonGoalThetargetyouwillarriveifyousolvetheredefinedproblem.ImplementationMarketingsegmentation,targetingandpositioningMarketingstrategyMarketingmix(plan)Thestrategic-plan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