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1、Developing Competitive Advantage and Strategic Focus,5,C H A P T E R,SWOT Analysis(Strengths,Weaknesses,Opportunities,Threats),“A widely used framework for organizing and utilizing the pieces of data and information gained from the situation analysis”Encompasses both internal and external environmen
2、tsOne of the most effective tools in the analysis of environmental data and information,Effectiveness of Analysis Tools,Exhibit 5.1,Major Benefits of SWOT Analysis,SimplicityLower CostsFlexibilityIntegration and SynthesisCollaboration,From Exhibit 5.2,Common Criticismsof SWOT Analysis,Allows firms t
3、o create lists without serious consideration of the issuesOften becomes a sterile academic exercise of classifying data and information,Making SWOT Analysis Productive,Stay FocusedSearch Extensively for CompetitorsCollaborate with other Functional AreasExamine Issues from the Customers PerspectiveLo
4、ok for Causes,Not CharacteristicsSeparate Internal Issues from External Issues,From Exhibit 5.3,Stay Focused,It is a mistake to complete one generic SWOT analysis for the entire organization or business unit.When we say SWOT analysis,we mean SWOT analyses.,Search Extensively for Competitors,Informat
5、ion on competitors is an important aspect of a SWOT analysis.Look for all four types of competition:Brand competitorsProduct competitorsGeneric competitorsTotal budget competitors,Collaborate with Other Functional Areas,Information generated from the SWOT analysis can be shared across functional are
6、as.SWOT analysis can generate communication between managers that ordinarily would not communicate.Creates and environment for creativity and innovation.,Examine Issues fromthe Customers Perspective,To do this,the analyst should ask:What do customers(and noncustomers)believe about us as a company?Wh
7、at do customers(and noncustomers)think of our product quality,customer service,price,overall value,convenience,and promotional messages in comparison to our competitors?What is the relative importance of these issues as customers see them?Taking the customers perspective is the cornerstone of a well
8、 done SWOT analysis.,Breaking Down Managerial Clichs into Customer-Oriented Strengths and Weaknesses,Exhibit 5.4,Look for Causes,Not Characteristics,Causes for each issue in a SWOT analysis can often be found in the firms and competitors resources.Major types of resources:,Separate Internal from Ext
9、ernal Issues,Failure to understand the difference between internal and external issues is one of the major reasons for a poorly conducted SWOT analysis.Socratic Advice:“Know thyself”“Know thy customer”“Know thy competitors”“Know thy environment”,The Elements of a SWOT Analysis,Strengths and Weakness
10、esScale and Cost EconomiesSize and Financial ResourcesIntellectual,Legal and Reputational ResourcesOpportunities and ThreatsTrends in the Competitive EnvironmentTrends in the Technological EnvironmentTrends in the Sociocultural Environment,SWOT-Driven Strategic Planning,Four issues the marketing man
11、ager must recognize:The assessment of strengths and weakness should look beyond products and resources to examine processes that meet customer needs.Offer solutions to customer problems instead of specific products.Achieving goals and objectives depends on transforming strengths into capabilities by
12、 matching them with opportunities.Weaknesses can be converted into strengths with strategic investment.Threats can be converted into opportunities with the right resources.Weaknesses that cannot be converted become limitations which must be minimized if obvious or meaningful to customers.,SWOT Matri
13、xA four-cell array used to categorize information at the conclusion of a SWOT analysis.Should be based on customer perceptions,not the perceptions of the analyst.Elements with the highest total ratings should have the greatest influence in marketing strategy.Focus on competitive advantages by matchi
14、ng strengths with opportunities.,Analysis of the SWOT Matrix,The SWOT Matrix,Exhibit 5.6,Quantitative Assessment ofElements Within the SWOT Matrix,Exhibit 5.7,Strengths,weaknesses,opportunities,and threats:Which is the most important?Why?How might your response change if you were the CEO of a corpor
15、ation?What if you were a customer of the firm?An employee?A supplier?,Discussion Question,Competitive advantages can arise from many external or internal sources.Competitive advantages refer to real differences between competing firms.Three basic strategies for competitive advantage:Operational Exce
16、llenceProduct LeadershipCustomer Intimacy,Developing and Leveraging Competitive Advantages,Operational ExcellenceFocus on efficiency of operations and processesLower cost operations leads to lower prices for customersProduct LeadershipExcellence in technology and product developmentMost advanced,hig
17、hest quality product offering in industryCustomer IntimacyUnderstanding customers better than the competitionDevelop long-term customer relationships,Competitive Advantage Strategies,Common Sourcesof Competitive Advantage,From Exhibit 5.8,Support or contradict this statement:“Given the realities of
18、todays economy and the rapid changes occurring in business technology,all competitive advantages are short lived.There is no such thing as a sustainable competitive advantage that lasts over the long term.”Defend your position.,Discussion Question,Four major directions for strategic efforts:Aggressi
19、ve(many internal strengths/many external opportunities)Diversification(many internal strengths/many external threats)Turnaround(many internal weaknesses/many external opportunities)Defensive(many internal weaknesses/many external threats)These are the most common,but other combinations of strengths
20、and weaknesses are possible.,Establishing a Strategic Focus,Strategy Canvas,Identifies factors that the industry currently competes on and what customers receive from existing product offerings(captured by the horizontal axis)Identifies the offering level received by buyers for each factor(captured
21、by the vertical axis)High levels mean that a company invests more and offers buyers more of that factor.Identifies a companys relative performance across its industrys factors of competition(captured by the value curve),Strategy Canvas forSouthwest Airlines,Exhibit 5.10,The Four Actions Framework,Wh
22、ich factors that the industry takes for granted should be eliminated?These factors may no longer have value for buyersWhich factors should be reduced well below the industrys standard?Have products been over designed in a race to beat competition?Which factors should be raised well above the industr
23、ys standard?Has the industry forced customers to make compromises?Which factors should be created that the industry has never offered?What are the potential new sources of value for buyers?,What Makes Good Strategy?,Ultimately,good strategy is in the eye of the beholder.In marketing,there are no rul
24、es to follow and no one to hold your hand.There is only the cold hard truth of customers and competition.Good strategy is about matching the firms strengths to the available opportunities.Blue Ocean Strategy defines good strategy as having these three characteristics:Focus Good strategy does not dif
25、fuse the companys efforts across all key factors of competition(the value curve clearly shows focus in the strategy).Divergence Good strategy differs from other competitors in the market(the value curve is unique from competitors).Compelling Tagline Good strategy can be summarized in a clear-cut sta
26、tement that delivers a clear,compelling message to customers.,Is it possible for an organization to be successful despite having a value curve that is not distinct from the competition?In other words,can an organization be successful by selling a me-too product(a product that offers no compelling differences when compared to the competition)?Explain.,Discussion Question,Developing Marketing GoalsAttainabilityConsistencyComprehensivenessIntangibilityDeveloping Marketing ObjectivesAttainabilityContinuityTime FrameAssignment of Responsibility,Developing MarketingGoals and Objectives,
