Lecture 3 Flashcards
What makes up a company’s internal resources?
An organization’s resources, competencies, achievements, performance, and all other key factors representing obstacles or springboards.
Practically, we can ask ourselves:
1. What are the company’s strengths and weaknesses?
2. What aspects of the company bring value to consumers?
3. How does the company compare to others in the sector?
Components:
- Resources and core competences
- human resources (competent staff?)
- financial resources (to invest in R&D/advertising)
- informational resources (how well do you understand the needs of the customers)
- purchasing resources (reliable suppliers) - Current offer: what do you currently offer and is it working?
- Past performance: what have you offered in the past that worked? That didn’t worked? Why?
- Relations with business partners
How do you benchmark a company’s internal ressources?
Benchmarking: compare themselves to their strongest competitors, you can benchmark any part of your internal environment
Compare:
1. Strategic importance of the activity
2. Performance compared to main competitor
VOIR PHOTO BENCHMARKING PP3 (avec les 4 cellules)
What makes up a company’s micro external environment (Porters)
- Competitors; rivalry among existing firms in the same industry
- Growth rate of the industry (lower growth = more competition)
- Number of competitors (more competition in highly concentrated industries)
- Product differentiation and transfer costs
(more competition if switching costs (ie. Time, money, effort, psychological) are low and if products are minimally differentiated)
- Suppliers (bargaining power of suppliers)
- Suppliers who are powerful can demand higher cost
- They tend to be powerful when: their offering is critical to the firm, there are few substitutes, the industry is not an important customer of theirs, the firm has high switching costs, they can vertically integrate (take over more of the production chain, own more parts, more implicated in the decision process, more control)
- Suppliers can also halt production entirely if they experience issues manufacturing or delivering the product
- Substitutes (threat of substitute products or services)
- Products that satisfy the same needs as your product but may be more efficient or affordable (ex.: spotify replacing CD sales)
- Substitutes present a high risk when: consumer switching costs are low, substitutes is cheaper and/or higher quality than industry product
- Newcomers (threat of new entrants)
- New businesses (established or new) entering your competitive market may take customers away
- 6 barriers to entry for new firms: economies of scale, differentiation/brand loyalty, capital requirements, advantages linked to costs (suppliers, subsidies, patents), government policies, access to distribution)
- Customers (bargaining power of customers)
- Customers can try to force lower prices and higher quality by switching to other brands or boycotting
- They are powerful when: they represent a larger portion of the firms’ sales, the firm is not different from other firms and switching costs are low, there are fewer customers overall, vertical integration (ex.: a company sells to a store that has its own store brand)
- Complements (opportunity of complementary products or services)
- Complementary goods offer more value together than apart
- Offering a complementary good can increase the firm and the industry’s profit potential (ITunes created to complement Ipod)
In resume, when analyzing the microenvironment, what questions can you ask yourself?
In resume, when analyzing the microenvironment, you ask yourself these questions:
* Who are your current competitors?
* How competitive is the market?
* How powerful are your suppliers? Your customers?
* Is there potential for newcomers?
* What are your substitutes and complements?
What makes up a company’s macro external environment (PESTEL)
Political: policies and rules, subventions, etc.
Economic: consumer have less/more purchasing power depending on the situation
Social: ages, backgrounds, and needs
Technological: new challenges and opportunities (ex.: online shopping)
Ecological: changes mandated by government or pressure from consumer groups
Legal: laws can regulate what businesses can do with their products
What is the marketing information system? What are some questions we can ask ourselves? How can it be helpful?
A set of resources and procedures for collecting and analyzing data from the organization’s internal and external environment. The system transforms this data into useful information to inform decision making (ex.: profiles, pricing, improvements).
Is it relevant (pertinent)? Reliable (fiable)? Valid (are we measuring what we think)?
It can help you…
* Reduce risk from demand uncertainty
* Understand what your customers want
* Identify new growth opportunities
* Global or regional strategy development
* Target and position products to maximize profitability
* Set the marketing mix (4 P’s)
What are the different types of data?
Primary Data
Data that the firm gathers to answer a specific question. Common collection methods include focus groups, surveys, and experiments.
Market Research
* The collection of data by the firm (i.e., primary data) intended to help solve a particular marketing problem
* Can be quantitative (e.g., experimentation, surveys) or qualitative(e.g., interviews, focus groups) in nature
Secondary Data
Pre-existing data that the firm can use to answer questions. This may be collected by a third-party (e.g., StatsCan, Nielson) or by the firm (e.g., sales reports)
Internal Data Collection
* Data the organization collects on itself regarding its suppliers, distributors, and customers
* Can be very helpful in e-commerce (e.g., lifetime value, departure of employees, response to advertising)
Marketing Intelligence
* Data regarding the external environment
* Laws
* Trends
* Technological developments
* Often collected by government agencies or professional associations
