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DESCRIPTIONSITUATIONAL 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
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