Chap 7 measuring strengths and weaknesses

Measuring of Product Strengths and Weaknesses: Conceptual Scheme TM 7-2 2.. Meaning of Current Strategic Posture TM 7-3  Operational Scheme For Measuring Current Strategic Posture TM7-4

A Intoduction

1 Meaning of Strengths and Weaknesses (TM 7-1)

B Measuring Strengths and Weaknesses

1 Measuring of Product Strengths and Weaknesses: Conceptual Scheme (TM 7-2)

2 Meaning of Current Strategic Posture (TM 7-3)

 Operational Scheme For Measuring Current Strategic Posture (TM7-4)

 Current Strategy of a Product/Market (TM 7-5)

a What Markets Do We Have? (TM 7-6)

b How is Each Market Served? (TM 7-7)

3 Past Performance

 Product Performance Profile (TM 7-8)

 Market Performance Profile (TM 7-9)

 Financial Performance

a Performance Measures (TM 7-10)

b Performance Standards (TM 7-11)

4 Marketing Environment (TM 7-12)

C Opportunity Analysis

1 Areas of Strength – Some Examples (TM 7-13)

2 Relative Strenghts of Personal Computer Firms in 2008 (TM 7-14)

3 Matching Strengths with Opportunities (TM 7-15)

4 Typical Marketing Weaknesses (TM 7-16)

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MEANING OF STRENGTHS AND

WEAKNESSES

Strengths refer to the competitive advantages and

other distinctive competencies that the company

can exert in the marketplace The distinctive

competence of an organization is more than what it

can do; it is what it can do particularly well

Weaknesses are constraints that hinder

move-ments in certain directions

M E A S U R E M E N T O F P R O D U C T

S T R E N G T H S A N D W E A K N E S S E S :

C O N C E P T U A L S C H E M E

MEANING OF CURRENT STRATEGIC

POSTURE

 What underlies our company’s success, given

competitor’s patterns of doing business?

 Are there any characteristics and traits that have

been followed regularly?

 To what strategic posture do these

charac-teristics and traits lead?

 What are the critical factors that could make a

difference in the success of the strategy?

 To what extent are critical factors likely to

under-go a change? What may be the direction of

change?

OPERATIONAL SCHEME FOR MEASURING

CURRENT STRATEGIC POSTURE

 Identify actual current scope of the company’s

activities

 Identify pattern of actual past and existing

resource deployments

 Deduce the actual basis on which the company

has been competing

 Determine actual performance criteria, emphasis,

and priorities

CURRENT STRATEGY OF A

PRODUCT/MARKET

The current strategy of a product/market may be

examined by seeking answers to the following two

questions:

1 What markets do we have?

2 How is each market served?

WHAT MARKETS DO WE HAVE?

 Recognize different market segments

 Build a demographic profile of each segment

 Identify important customers in each segment

 Identify those customers, while important, also

do business with competitors

 Reasons that each important customer may

have in buying the product from us

 Strategic perspective of each important

customer as it concerns the product’s purchase

 Anticipated changes in each customer’s

perspectives

HOW IS EACH MARKET SERVED?

It refers to the means that a company employs to

serve different customers This can be examined

by analyzing information contained in Exhibit 7-3 in

the text (See the breakfast cereal example in the

text.)

.

PRODUCT PERFORMANCE PROFILE

CONTRIBUTION TO COMPANY

PERFORMANCE

Product

Line

Profit-ability

Product Leader-ship

Techno-logical Growth

Support

of Total Product Line

Utiliza-tion of Company Resource

Provision of Customer Benefits

MARKET PERFORMANCE PROFILE

CONTRIBUTION TO COMPANY

PERFORMANCE

Market

Segment

Profit-ability

Market Share

Growth End-user Markets

Size of Customer Base

Distribu-tion Strength

Degree of Customer Loyalty

PERFORMANCE MEASURES

 Growth rate

 Profitability

 Market share

 Cash flow

PERFORMANCE STANDARDS

 Company’s performance

 Competitors’ performance

 Management expectations

 Performance in terms of resource committed

Monitoring of the environment from the viewpoint

of products/markets is a line function that should

be carried out by those who are involved in making

marketing decisions The constituents of the

product/ market environment are:

 Social and cultural effects

 Political influences

 Ethical considerations

 Legal requirements

 Competition

 Economic climate

 Technological changes

 Institutional evolution

 Consumerism

 Population

 Location of consumers

 Income

 Expenditure patterns

 Education

AREAS OF STRENGTH—

SOME EXAMPLES

 Excellence in product design

 Leadership in product innovation

 Efficiency in customer service

 Effectiveness in sales promotion

 Merchandising efficiency

 Customer loyalty

 Dominant market share position

 Effectiveness of advertising

RELATIVE STRENGTHS OF PERSONAL

COMPUTER FIRMS IN 2008

Hewlett-Packard ● ● ● ● ● ●

MATCHING STRENGTHS WITH

OPPORTUNITIES

STRENGTH LIKELY IMPACT

OPPORUNTIY (FURNISHED BY THE ENVIRONMENT)

OBJECTIVES AND GOALS Customer loyalty  Incremental product

volume increases

 Price increases for premium

quality/service

 New product introductions

 A trend of changing taste

 An identified geographic shift of part of the market

 A market segment neglected by the industry

 Develop a premium product

 Introduce the existing product in the segment hitherto not served

 Develop a new channel outlet for the product, etc.

Cordial

relationships with

channels

 New product introductions

 Point-of-purchase advertising

 Reduction of delivered costs through distribution innovations

 Tied-in products

 Merchandising differentiation

 A product-related subconscious need not solicited by competition

 A product weakness

of competition

 A distribution weakness of competition

 Technical feasibility for improving existing package design

 A discovered new use for the product

or container

TYPICAL MARKETING WEAKNESSES

 Inadequate definition of customer for

product/market development

 Ambiguous service policies

 Too many levels of reporting in the

organiza-tional setup

 Overlapping channels

 Lack of top-management involvement in new

product development

 Lack of quantitative goals