2 Flashcards
porters 5 forces
according to Porter, there are 5 forces that represent the key sources of competitive pressure within an industry:
- competitive rivalry
- supplier power
- buyer power
- threat of substitution
- threat of new entry
competitors (PFF)
refers to the no. of competitors and their ability to undercut a company.
- more competitors = less power in market
- market volumes/shares
- market sectors/product/ service type
- market responses
bargaining power of suppliers (PFF)
- how easily suppliers can drive up the cost of inputs.
- it is effected by the number of suppliers of key inputs of a good or service
- how unique these inputs are
- how much it would cost a company to switch to another supplier.
- the fewer suppliers to an industry, the more a company would depend on suppliers.
- means they cound drive up input costs
bargaining power of customers (PFF)
The ability that customers have to drive prices lower
- a smaller and more powerful client base = each customer has more power to negotiate for lower prices and better deals
threat of substitutes (PFF)
- substitute goods or services that could replace another company’s products = threat
potential of new entrants into an industry
a company’s power is also affected by the force of new entrants into its market.
- economies of scale: cost advantages reaped by companies when production becomes efficient.
marketing analysis toolkit: the 5 Cs
- customers
- context
- company
- collaborators and complementors
- competitors
customers (5 Cs)
- needs analysis
1) how will the product fulfill my unmet needs?
2) how will fulfilling these needs impact my sense of self e.g. what meaning does the product bring to the consumer’s life?
3) how will fulfilling these needs impact my sense of belonging? e.g. how does the product connect customer to others in the social world
context (5 Cs)
outcome of analysis helps understand factors from external environment = influence business decisions and strategy–> PESTEL analysis
- political development: take into account your countries gov policies and political stabilities
- economic development: includes exchange rates, economic growth or decline, inflation, interest rates, consumer spending…
- socio-demographic and socio-economic trends: trends, lifestyle choices, cultural norms, consumer tastes, buying habits…
- technological process: how is your business responding to technological innovation? AI
- environmental / cultural: what is your businesses impact on the environment, carbon emissions, use of sustainable resources.
- legal and regulatory: constantly changing, up to date with changes in legislations, health and safety…
once you are clear on the factors included in a pestel analysis, the business must relate this in real terms to assess the risks within the industry sector they are based in
Company ( 5Cs)
1) business model
- what does the company fundamentally do and how does it make money?
- what is the engine that makes the business run?
2) competitive strategy
- low cost for many segments (e.g. Ryanair)
- unique attributes
3) Competitive advantages
- do you offer superior differentiation?
- do you have marketing advantages versus your competition?
- how strong is your brand awareness
collaborators and complementors (5Cs)
assess which are most beneficial and least to be disruptive
- collaborators: companies and/or people who help the firm in marketing the product to customers e.g. suppliers, distributors…
- complementors: companies and/or people who also benefit when the firm sells its product
competitors (5 Cs)
product positioning differences, USPs (Porters 5 forces)
linking to the 5 Cs to SWOT
- marketing environments consist of relevant people, structures, and forces that affect a marketing management
- the marketing environment frames, defines and influences all possible marketing activities
- macro environment (as analysed in PESTEL & Porters 5 forced) feeds into the threats and opportunities
Swot Analysis
a planning tool which seeks to identify their internal strengths, weeknesses and external opportunites and threats involved in a project or organization.
- it is a framework for matching an organisations goals, programmes and capacities to the environment in which it opperates
Weaknesses –> strengths
threats —> opportunities
advantages and disadvantages of SWOT
+ The simplicity of the SWOT framework makes it accessible to various stakeholders within an organization.
- simplicity that makes SWOT accessible can also be a drawback. It might oversimplify complex situations, leading to a superficial understanding of the business environment.
