Strategic Market Management
Market / Submarket Analysis
MM - XIX
Christina Juneva - 0953052
Market / Submarket Analysis
Overview of Strategic Market Management
Strategic Analysis
External Analysis Internal Analysis
Customer analysis: Performance analysis:
Segments, motivations, unmet needs. Profitability, sales, shareholder value
Competitor analysis: analysis, customer satisfaction, product
Identity, strategic groups, performance, quality, brand associations, relative
image, objectives, strategies, culture, cost, new products, employee capability
cost structure, strengths, weaknesses. and performance, product portfolio
Market analysis: analysis.
Size, projected growth, profitability, Determinants of strategic options:
entry barriers, cost structure, Past and current strategies, strategic
distribution systems, trends, key problems, organizational capabilities
success factors. and constraints, financial resources and
Environmental analysis: constraints, strengths, and weaknesses.
Technological, governmental,
economic, cultural, demographic,
scenarios, information-need areas.
Opportunities, threats, trends, and strategic Strategic strengths, weaknesses, problems,
uncertainties. constraints, and uncertainties.
Strategy Identification and Selection
Identify strategic alternatives
Product-market investment strategies.
Functional area strategies.
Assets, competencies, and synergies.
Select strategy.
Implement the operating plan.
Review strategies.
External Analysis
External analysis involves an examination of the relevant elements external to an organization.
The analysis should be purposeful, focusing on the identification of opportunities, threats, trends,
strategic uncertainties, and strategic choices. External analysis is divided into four sections or
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components: Customer analysis, Competitor analysis, Market analysis, and Environmental
analysis.
a. Customer Analysis
The first step of external analysis.
Identifying the organization’s customer segments.
Identifying each segment’s motivations and unmet needs.
b. Competitor Analysis
Starts with the identification of competitors, current and potential.
Develop a strategy and understanding the competitor’s:
o Performance
o Image and personality
o Objectives
o Current and past strategy
o Culture
o Cost structure
o Strengths and weaknesses
c. Market Analysis
Has two primary objectives: 1. To determine the attractiveness of the market and
submarkets. 2. To understand the dynamics of the market so that threats and
opportunities can be detected and strategies adapted. The analysis should include
an examination of the market size, growth, profitability, cost structure, channels,
trends, and key success factors.
o Size. A basic characteristic of a market (or a submarket) is its size.
o Growth Prospects. The analysis needs to assess the growth trend and
product life-cycle stage for the industry and its submarkets. It is important
to recognize growth contexts even though they will not always be
attractive investments for a given firm.
o Market Profitability. The profitability of the market depends on five
factors: The number and vigor of existing competitors, the threat of new
competitors, the threat of substitute products, the profit impact of powerful
suppliers, and the power of customers to force price concessions.
o Cost Structures. One of the most important things that represented a
value-added stage.
o Distribution Channels. An understanding of the alternative distribution
channels and trends can be of strategic value.
o Market Trends. Trends within the market can affect current or future
strategies and assessments or market profitability.
o Key Success Factors. A key success factors is any competitive asset or
competence that is needed to win in the marketplace, whether it is an SCA
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(actually representing a sustainable point of advantage) or merely a point
of parity with the company’s competitors.
d. Environmental Analysis
Environmental analysis is the process of identifying and understanding emerging
opportunities and threats created by the forces. It is important to limit environmental
analysis to what is manageable and relevant, because it can easily get bogged down by
excessive scope and volume. Environmental analysis divide into five components such
as: technological, governmental, cultural, economic, and demographic.
Internal Analysis
Internal analysis aims to provide a detailed understanding of strategically important aspects of
the organization. In particular, it covers performance analysis and an examination of the key
determinants of strategy, such as strengths, weaknesses, and strategic problems. Internal analysis
like external analysis, usually has an SBU as frame of reference but can also be productive at the
level of aggregations of SBUs, such as divisions of firms.
a. Performance Analysis
Performance analysis can be measured by:
ROA (Return on Assets): is the most commonly used measure of profitability.
Sales: Another performance measure that can reflect changes in the customer base
that have long-term implications.
Shareholder value analysis: Based on generating a discounted present value.
Nonfinancial performance measures: Customer satisfaction / brand loyalty, product /
service quality, brand / firm associations, relative cost, new product activity & manager /
employee capability and performance.
Product Portfolio Analysis
This analysis considers the performance / strength of each business area, together with
attractiveness of the business area in which it competes.
b. Determinants of Strategic Options
Internal analysis should also review characteristics of the business that will influence
strategic options.
Strategy Review
The past and current strategy provides an important reference point and should be
understood.
Strategic Problems
A strategic problems is one that, if uncorrected, could have damaging strategic
implications.
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Organizational Capabilities and Constraints
Internal analysis includes an examination of the internal organization, its
structure, systems, people, and culture. The internal organization can be important
strategically when it is a source of: Strengths, Weakness, and Constraint.
Financial Resources and Constraints
An analysis of the financial recources available for investment, either from
planned cash flow or from debt financing, helps determine how much net
investment should be considered.
Strengths and weaknesses
Strengths and weaknesses are based on assets, such as a brand name, or
competencies, such as advertising or manufacturing.
Referensi:
Aaker, David, A. 2001. Strategic Market Management: 6th Edition. New York: John Wiley &
Sons. Chapter 2, pp 18 – 34.
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