Swot Analysis Soft Drink Industry by egd90027

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									MARKETING STRATEGY
  O.C. FERRELL • MICHAEL D. HARTLINE




                           4
                     SWOT Analysis
                   A Framework for Developing
                        Marketing Strategy
            SWOT Analysis

• “A widely used framework for organizing
  and utilizing the pieces of data and
  information gained from the situation
  analysis…”
• Encompasses both internal and external
  environments
• One of the most effective tools in the
  analysis of environmental data and
  information
                                            4-2
Effectiveness of Analysis Tools




             Exhibit 4.1          4-3
Major Benefits of SWOT Analysis

•   Simplicity
•   Lower Costs
•   Flexibility
•   Integration and Synthesis
•   Collaboration


                   From Exhibit 4.2   4-4
     Directives for a Productive
          SWOT Analysis
• Stay Focused
• Search Extensively for Competitors
• Collaborate with other Functional Areas
• Examine Issues from the Customers’
  Perspective
• Look for Causes, Not Characteristics
• Separate Internal Issues from External Issues

                   From Exhibit 4.3           4-5
             Stay Focused

• It is a mistake to complete one generic
  SWOT analysis for the entire
  organization or business unit.
• When we say SWOT analysis, we mean
  SWOT analyses.



                                        4-6
Search Extensively for Competitors

• Information on competitors is an
  important aspect of a SWOT analysis.
• Look for all four types of competition:
  – Brand competitors
  – Product competitors
  – Generic competitors
  – Total budget competitors
                                            4-7
Marketing Strategy in Action
              • This 2002 ad for Fruitopia, a
                fruit drink by the makers of
                Coke, shows that even the soft
                drink giants have had to
                respond to other sources of
                competition than traditional
                brand competitors.
              • Can you think of other
                products that illustrate the
                effects of competition other
                than the effects of brand
                competitors?


                                           4-8
       Collaborate with Other
         Functional Areas
• Information generated from the SWOT
  analysis can be shared across functional
  areas.
• SWOT analysis can generate
  communication between managers that
  ordinarily would not communicate.
  – Creates and environment for creativity and
    innovation.
                                             4-9
        Examine Issues from
     the Customers’ Perspective
• To do this, the analyst should ask:
  – What do customers (and non-customers) believe
    about us as a company?
  – What do customers (and non-customers) think of
    our product quality, customer service, price,
    overall value, convenience, and promotional
    messages in comparison to our competitors?
  – What is the relative importance of these issues as
    customers see them?
• Taking the customers’ perspective is the
  cornerstone of a well done SWOT analysis.
                                                    4-10
Look for Causes, Not Characteristics

• Causes for each issue in a SWOT
  analysis can often be found in the firm’s
  and competitors’ resources.
• Major types of resources:
  -Financial        -Organizational
  -Intellectual     -Informational
  -Legal            -Relational
  -Human            -Reputational
                                         4-11
         Separate Internal from
            External Issues
• Failure to understand the difference between
  internal and external issues is one of the
  major reasons for a poorly conducted SWOT
  analysis.
• Socratic Advice:
  –   “Know thyself”
  –   “Know thy customer”
  –   “Know thy competitors”
  –   “Know thy environment”
                                             4-12
         Discussion Question

• Why are industries and firms often so
  reluctant to adapt to changes in their
  external environments? Other than the
  music recording industry, what other
  industries or firms seem to be slow to
  change? Why?


                                           4-13
The Elements of a SWOT Analysis

• Strengths and Weaknesses
  – Scale and Cost Economies
  – Size and Financial Resources
  – Intellectual, Legal, and Reputational Resources
• Opportunities and Threats
  – Trends in the Competitive Environment
  – Trends in the Technological Environment
  – Trends in the Sociocultural Environment

                                                      4-14
The Starbucks Experience




                           4-15
 SWOT-Driven Strategic Planning

• Four issues the marketing manager must recognize:
   – (1) The assessment of strengths and weakness should look beyond
         products and resources to examine processes that meet customer
         needs. Offer solutions to customer problems instead of specific
         products.
   – (2) Achieving goals and objectives depends on transforming
         strengths into capabilities by matching them with opportunities.
   – (3) Weaknesses can be converted into strengths with strategic
         investment. Threats can be converted into opportunities with
         the right resources.
   – (4) Weaknesses that cannot be converted become limitations which
         must be minimized if obvious or meaningful to customers.


                                                                       4-16
      Analysis of the SWOT Matrix

• SWOT Matrix:
  – A four-cell array used to categorize information at the
    conclusion of a SWOT analysis.
• Should be based on customer perceptions, not the
  perceptions of the analyst.
• Elements with the highest total ratings should
  have the greatest influence in marketing strategy.
• Focus on competitive advantages by matching
  strengths with opportunities.
                                                       4-17
The SWOT Matrix




      Exhibit 4.6   4-18
    Quantitative Assessment of
Elements Within the SWOT Matrix




             Exhibit 4.7          4-19
         Discussion Question

• Strengths, weaknesses, opportunities, and
  threats: Which is the most important? Why?
  How might your response change if you
  were the CEO of a corporation? What if
  you were a customer of the firm? An
  employee? A supplier?


                                         4-20
 Leveraging Competitive Advantages

• Competitive advantages can arise from many
  external or internal sources.
• Competitive advantages refer to real differences
  between competing firms.
• Three basic strategies for competitive advantage:
  – (1) Operational Excellence
  – (2) Product Leadership
  – (3) Customer Intimacy

                                                4-21
             Common Sources
         of Competitive Advantage


· Relational Advantages              · Product Advantages
· Legal Advantages                   · Pricing Advantages
· Organizational Advantages          · Promotion Advantages
· Human Resources Advantages · Distribution Advantages



                          From Exhibit 4.8                  4-22
          Discussion Question

• Support or contradict this statement: “Given
  the realities of the new economy and the
  rapid changes occurring in business
  technology, all competitive advantages are
  short lived. There is no such thing as a
  sustainable competitive advantage that lasts
  over the long term.” Defend your position.

                                          4-23
       Establishing a Strategic Focus

• Four major directions for strategic efforts:
   – Aggressive (many internal strengths / many external
     opportunities)
   – Diversification (many internal strengths / many external
     threats)
   – Turnaround (many internal weaknesses / many external
     opportunities)
   – Defensive (many internal weaknesses / many external threats)
• These are the most common, but other combinations of
  strengths and weaknesses are possible.
                                                             4-24
Strategic Turnaround at Chrysler




                               4-25
              Developing Marketing
              Goals and Objectives
• Developing Marketing Goals
  –   Attainability
  –   Consistency
  –   Comprehensiveness
  –   Intangibility
• Developing Marketing Objectives
  –   Attainability
  –   Continuity
  –   Time Frame
  –   Assignment of Responsibility
• Moving Beyond Goals and Objectives
                                       4-26
2003 Baldrige Award Criteria
 for Performance Excellence




           Exhibit 4.10        4-27

								
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