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SITUATIONAL ANALYSIS. MODULE 2. 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. - PowerPoint PPT Presentation

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  • SITUATIONAL ANALYSISMODULE 2

  • SITUATIONAL ANALYSISThe 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 ANALYSISAssess organizational strengths and weaknesses by using Ansoffs Grid of Competences

  • ANSOFFS GRID OF COMPETENCESA 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

  • COMPETITIONSTRENGTHS &WEAKNESSESSTRATEGIC POSTUREPAST PERFORMANCEMARKETINGEFFECTIVENESSMARKETINGENVIRONMENTMEASUREMENT 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

  • OPPORTUNITIES AND THREATSPolitical/ LegalSocial/Cultural/DemographicEconomicTechnological

  • POLITICAL / LEGALManagerial QuestionsWhat 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 AnalysisAnalysis of regulationsEnvironmental monitoringPublic opinion polls

  • SOCIAL/CULTURAL/DEMOManagerial QuestionsWhat 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 AnalysisContent analysis of popular pressLifestyle analysisGeneral purpose consumer surveysCensus data / projections

  • ECONOMICManagerial QuestionsWhat 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?

  • ECONOMICMethods of AnalysisMacroeconomic forecasting models

  • TECHNOLOGICALManagerial QuestionsWhat are some emerging technologies that will affect the current products and their processes? What are the life-cycle trends of the current technologies?

  • TECHNOLOGICALMethods of AnalysisLife Cycle AnalysisTechnological forecasting methods

  • SITUATIONAL ANALYSISCompetitor AnalysisWhat are the strengths, weaknesses and limitations of our competitors?

  • ANALYZING THE COMPETITIONIdentify key competitorsAnalyze performance recordAssess current satisfactionIdentify marketing strategyAnalyze resources and competenciesPredict future behavior

  • COMPETITORS OBJECTIVESFinancial goalsMarket share

  • COMPETITORS OBJECTIVESThe parents objectiveswhat are theyoverall importance of SBUhow successful has the parent been in the past

  • COMPETITORS STRATEGYPast strategiesPresent strategies

  • COMPETITORS SUCCESSESProvide insight into future actions

  • COMPETITORS WEAKNESSESTake advantage of weaknesses!

  • FUTURE BEHAVIORWhat is their current level of satisfaction? How likely will they change?How effectively can the competitor respond to environmental changes?

  • GATHERING COMPETITIVE INFORMATIONRecruits and employees of competing firmsCustomersPublished materials and public documentsObservation Trash analysis

  • THE COMPETITIONThe essence of strategy formulation is coping with competition. (Porter)We must be broad minded when looking at the competition.

  • POTENTIAL COMPETITORSCurrent CompetitionSuppliersPotential EntrantsSubstitute ProductsCustomers

  • FIVE FACTOR MODEL OF MARKET PROFITABILITYPOTENTIALENTRANTSPOWER OFSUPPLIERSSUBSTITUTEPRODUCTSPOWER OFBUYERSEXISTINGCOMPETITORS

  • THREAT OF POTENTIAL ENTRANTSBarriers to EntryIncumbents cost advantages Product differentiationCapital requirementsAccess to distribution channelsGovernment policiesSwitching costs

  • POWER OF SUPPLIERSSuppliers can be powerful if:industry is dominated by a few suppliersthe industry of the customer is not important to the supplier group

  • POWER OF BUYERSBuyers can be powerful if they:are fewpurchase in large volumesearn low profitscan find alternative suppliers

  • SUBSTITUTE PRODUCTSSubstitute products limit the potential earnings of an industry by placing a ceiling on prices it can charge.

  • RIVALRY AMONG EXISTING COMPETITORSRivalry will be intense if:competitors are numerous/identical in sizethe product or service lacks differentiationthere is high investment intensity

  • FROM THE INTERNETUniversity of Arizona Librarieshttp://dizzy.library.arizona.edu/ library/teams/slrp/csa/csa-html /csa_home.htm

  • FROM THE TEXT.Pages 74 to 93Pages 115 to 119Pages 158 to 175