Marketing Management

Marketing and Strategic Planning Process

SWOT Analysis

Purpose of SWOT Analysis

It is an easy-to-use tool for developing an overview of a companys strategic situation
It forms a basis for matching your companys strategy to its situation

Porters Five Forces Model

Threat of New Entrants

Bargaining Power of Suppliers

Rivalry Among Competing Firms in Industry

Threat of Substitute Products

Bargaining Power of Buyers

Porters Five Forces Model

Threat of New Threat of Entrants New

Entrants

Threat of New Barriers Entrants to Entry

Economies of Scale Product Differentiation Capital Requirements

Access to Distribution Channe Expected Retaliation Government Policy

Porters Five Forces Model

Suppliers are likely to be powerful if: Threat of Supplier industry is dominated by a few New Entrants firms Suppliers products have few substitutes Buyer is not an important customer to supplier Suppliers product is an important input to buyers product Suppliers products are differentiated Supplier poses credible threat of forward integration

Bargaini ng Power of Supplier s

Porters Five Forces Model

Buyer groups are likely to be powerful if: Threat of Buyers are concentrated New Entrants Products are undifferentiated Buyers face few switching costs Buyer presents a credible threat of backward integration Bargaining Power of Product unimportant to quality Suppliers Buyer has full information

Bargaini ng Power of Buyers

Porters Five Forces Model

Threat of New Entrants

Bargaining Power of Suppliers

Bargaining Power of Buyers

Threat of Substitu te Products

Porters Five Forces Model

Threat of New Entrants

Bargaining Power of Suppliers

Rivalry Among Competing Firms in Industry

Threat of Substitute Products

Bargaining Power of Buyers

Purpose of Five-Forces Analysis

The five forces are environmental forces that impact on a companys ability to compete in a given market The purpose of five-forces analysis is to diagnose the principal competitive pressures in a market and assess how strong and important each one is.

Porters Five Forces for Coal Industry

Entry Barriers
Government Policies Huge capital investment (mining, logistics)

Bargaining Power of Suppliers

Controlled by Govt

Bargaining Power of Customers

Pricing controlled by Govt. Approx. 95% produced by state and central govt. owned companies

Competition
CIL alone accounts for around 85 % of domestic production

Boston Consulting Group Matrix

Boston Consulting Group Matrix

Market Share
High Low

High

Stars
Leaders in business Profit potential May need heavy investment to grow

Question Marks

Market Growth

Build into Stars or phase out Requires cash to hold market share Potential for the future?

Cash Cows
Foundation of company and often stars of yesterday Established, successful SBU Produce cash

Dogs
Low market share in a declining industry Low profit potential May require large sums of money to support

Low

Purpose of BCG Matrix

To assess : Profiles of products/businesses Cash demands of products Development cycles of products Resource allocation and divestment decisions

BCG Matrix for ITC Ltd

Hotels Agri business FMCG- Others

FMCG-Cigarettes

ITC Infotech

GE / McKinsey Matrix
Business Strength
Strong Medium Weak

Market Attractiveness

Low

Medium

High

GE / McKinsey Matrix
Business Strength
Strong Medium Weak

Market Attractiveness

Medium

High

Best segment Business is strong and the market is attractive Company should allocate resources in this business and focus on growing the business and increase market share

Low

GE / McKinsey Matrix
Business Strength
Strong Medium Weak

Market Attractiveness

High

Decision makers need to make judgment on how to deal with these SBUs
Business is strong Market is not attractive Market is strong Business is not strong

Low

Medium

GE / McKinsey Matrix
Business Strength
Strong Medium Worst segment Business is weak and market is not attractive Decision makers should consider either of the following:
Repositioning these SBUs into a different market segment Develop better costeffective offering Get rid of these SBUs and invest resources into more promising and attractive SBUs

Weak

Market Attractiveness

Low

Medium

High

GE Matrix for TATA

Business Strength
Strong Medium Weak

Market Attractiveness

IT

Consumer Durables

Low

Medium

High

Textiles

Ansoff Growth Strategy Matrix

Existing New Existing
Market Penetration Product Development

PRODUCTS

MARKETS
Market Development Diversification

New

Product/ Market Expansion Grid

Market penetration
Making more sales to current customers without changing its products (e.g.) Sales promotion, Advertising, Price discount

Market development
Identify and develop new markets for its current products (e.g.) Blackberry

Product Development
Offering modified or new product to current market (e.g.) Intel

Diversification
Develop new products for new markets (e.g.) Xerox personal computer
23

Recap
SWOT Analysis Porters Five Forces Model BCG Matrix GE Matrix Ansoff Matrix