Lt3 -analys externalenv
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Lt3 -analys externalenv Presentation Transcript

  • 1. External Environment in the Asia Pacific Region Asia-Pacific Marketing Federation Certified Professional Marketer Copyright Marketing Institute of Singapore
  • 2. Outline
    • Introduction
    • The Company’s Microenvironment
    • The Company’s Macroenvironment
    • The Competitors
    • Porter's Five Forces Model
  • 3. Introduction
    • Definition:
    • The Company’s environment consists of "the actors and forces outside marketing that affect marketing management's ability to develop and maintain successful transactions with its target customers" Kotler et al, 1994
  • 4. Introduction (cont’d)
    • Companies must evaluate both micro and macro-environment to identify
      • any trends that may affect their marketing strategies, and
      • opportunities that can be developed into competitive advantages
    • Porter's Five Forces model analyses market structures to determine market attractiveness taking into consideration the micro and macro environments in its construction
  • 5. Company’s Microenvironment
    • Relates to the internal forces or forces close to the company over which some control is possible
    • Top management
    • Other functions e.g. finance and accounting, R& D, manufacturing and purchasing
    • Suppliers
    • Marketing intermediaries (channel partners)
    • Customers
    • Competitors
    • Public
  • 6. Company’s Macro-environment
    • Relates to the larger forces having an impact on society as a whole
    • A company has little influence on these forces and therefore can only adapt its marketing mix to account for the resulting opportunities and threats
  • 7. Major forces of the macro-environment
    • Demographic
    • Economic
    • Natural
    • Technological
    • Cultural
    • Political/legal
  • 8. Demographic Environment
    • Demographic trends:
    • Changing age structure
    • Changing family structure
    • Geographic shifts in population
    • Higher education level & more white collar job holders
    • Increasing globalization of cities such as Singapore
  • 9. Economic Environment
    • Economic trends affecting consumers buying power and spending pattern
    • Change in per capital real income
      • Disposable
      • Discretionary
      • Income distribution
    • Savings & debt
    • Consumer expenditures
    • Change in interest rates and cost of living
  • 10. Natural environment
    • Natural trends include those natural resources used in production or those affected by marketing activities
    • Raw material shortages
    • Increase in energy cost
    • Increase pollution levels
    • Increase in Governmental intervention in natural resource management
  • 11. Technological Environment
    • Consists of forces that affect new technology, new product development and market opportunities
    • Faster pace of technological change
      • Shorter PLC
    • Higher R&D budgets
    • Concentration on minor improvements
    • Increased regulations
  • 12. Cultural Environment
    • Affect society's basic values, perceptions, preferences and behaviors
    • Core cultural values and beliefs
    • Secondary cultural values
    • Sub cultures
  • 13. Legal and Political Environment
    • Trends in the legal and political environment include
    • Increased legislation regulating business
      • Singapore’s Fair Trading Act (impending)
    • Changing government agency enforcement
    • Growth of public interest groups
    • Regional groupings
      • ASEAN FTZ
  • 14. Competitive Analysis
    • Who are your competitors?
    • Do you know about your close competitors’ strengths and weaknesses?
    • How detail should we analyze the competition?
      • Use a systematic approach
      • Analysis competition at various levels (next slide)
  • 15. Levels of Competition Generic Competition Form Competition Industry Competition Brand Competition
  • 16. Levels of Competition (cont’d)
    • Generic competition—e.g. Honda against Silver Sea Cruise for the same consumer dollars
    • Form competition—e.g. Toyota against manufacturers of other vehicles that provide the same service such as Yamaha (motorcycle)
    • Industry competition—e.g. Honda against Mercedes, Lexus etc who make the same products or class of products (different prices)
    • Brand competition—e.g. Honda against Toyota, Nissan etc. who offer similar products and service to the same customers at similar prices
  • 17. Industry Competition
    • Different industries can sustain different levels of profitability; partly due to the difference in industry structure
    • Porter’s Model of Industry Competition, commonly know as Porter’s Five Forces provides a framework for analyzing the influence of the forces on the industry to determine the industry’s profitability and competitiveness
  • 18. Porter’s Model of Industry Competition Industry degree of rivalry Buyers Suppliers Barriers to Entry Substitutes (Source: Aakers pp.8487)
  • 19. Porter’s 5 Forces— Barriers to Entry
    • Absolute cost advantages
    • Proprietary learning curve
    • Access to inputs
    • Government policy
    • Economies of scale
    • Capital requirements
    • Brand identity
    • Switching costs
    • Access to distribution
    • Expected retaliation
    • Proprietary products
    (Source: Michael Porter, “On Competition”)
  • 20. Threats of Substitutes
    • Switching costs
    • Buyer propensity to substitute
    • Relative price performance of substitutes
    (Source: Michael Porter, “On Competition”)
  • 21. Buyer Power
    • Bargaining leverage
    • Buyer volume
    • Buyer information
    • Brand identity
    • Price sensitivity
    • Threat of backward integration
    • Product differentiation
    • Buyer concentration vs. industry
    • Substitutes available
    • Buyers' incentives
    (Source: Michael Porter, “On Competition”)
  • 22. Supplier Power
    • Supplier concentration
    • Importance of volume to supplier
    • Differentiation of inputs
    • Impact of inputs on cost or differentiation
    • Switching costs of firms in the industry
    • Presence of substitute inputs
    • Threat of forward integration
    • Cost relative to total purchases in industry
    (Source: Michael Porter, “On Competition”)
  • 23. Degree of Rivalry
    • Exit barriers
    • Industry growth
    • Industry concentration ratio
    • Fixed costs/Value added
    • Product differentiation
    • Buyers' incentives
    (Source: Michael Porter, “On Competition”)