1 / 39

The situation analysis

The situation analysis. A University of Florida Presentation Abridged and Modified 2004/2005 by R. W. Bodo. The purpose of the situation analysis. Answers the why are we here? It provides a background on the factors that influence the company’s functions and performance.

major
Download Presentation

The situation analysis

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. The situation analysis A University of Florida Presentation Abridged and Modified 2004/2005 by R. W. Bodo

  2. The purpose of the situation analysis • Answers the why are we here? • It provides a background on the factors that influence the company’s functions and performance

  3. Elements of the situation analysis • Problem identification • Situation analysis • Industry/Category • Company • Product • Competition • Market • Consumer • Other considerations: Legal, political...

  4. Problem identification • A brief statement that summarizes the core dilemma and/or challenge a company must overcome

  5. Industry/Category Analysis • What’s going on in the Industry? • What’s going on in the category? • Overall what does the situation portend for the clent?

  6. Macro-environmental considerations • Industry/category • Size of the market in general • Growth trends • Demographic trends • Economic trends • Technological issues • Political/legal issues • Socio/cultural trends

  7. Company analysis • What the company is concerned with • What it represents • Usually this information is found in mission and vision statements

  8. Company analysis (cont) • Company’s mission (Annual report) • History • Sales and profits • Market standing/category share • Product offerings • Key personnel • Capital resources

  9. Product analysis • Focuses on the abstract and concrete qualities of the company’s product • Product attributes/functions • Positioning/Brand personality • Cost/Margins • Price • Packaging • Distribution • Promotions used • Media spent

  10. Product Life Cycle (Traditional view)

  11. Product Life Cycle New perspective - Golder and Tellis’ MSI Report • Informational cascades • Few buy a new product based on personal judgment but the majority base their decision on what they see others doing. • This leads to fast growth AND even faster declines of sales • Particularly true for leisure products (VCR) compared to time-saving products (Microwave). • Example: OnStar

  12. Competitive analysis • Considers all options consumers might think about in their purchasing decision

  13. Competition • Alternatives on a person’s mind when selecting a good to satisfy a need Direct competitors

  14. Competitive analysis • In what category does the product compete? • Who are the brand’s major direct competitors? Indirect competitors? • What is the competitor’s brand position? • What is the price of their product?

  15. Competitive analysis (cont) • What is the respective market share? • What is their communication strategy? • How much do they spend on media? • Where is competitive media spending concentrated?

  16. Market analysis • Helps planners identify which geographic areas are key • These areas are important due to: • The strong position the advertiser enjoys in the region • The problems associated with doing business in the region

  17. Market analysis: Development index • Brand development index (BDI) • Category development index (CDI) • If BDI>100 • If CDI>100 % of a brand’s total US sales in a market x 100 % of total US population in a market = BDI % of a category’s total US sales in a market x 100 % of total US population in a market = CDI

  18. Brand development index (BDI) % of a brand’s total US sales in a market x 100 % of total US population in a market = BDI Nestea Sweet Tea % of sales % of pop Florida 40% 10% Texas 30% 30% California 10% 20% BDI(FL)= (40 x 100)/10 = 400 BDI (TX) = (30 x 100)/30 = 100 BDI (CA) = (10 x 100)/20 = 50

  19. Category development index (CDI) % of a category’s total US sales in a market x 100 % of total US population in a market = CDI Sweet Tea % of sales % of pop Florida 40% 10% Texas 30% 30% California 10% 20% CDI(FL)= (40 x 100)/10 = 400 CDI (TX) = (30 x 100)/30 = 100 CDI (CA) = (10 x 100)/20 = 50

  20. Consumer analysis • Information that helps us gain a grasp on the (current/potential) consumer • Major questions to be answered • Who are they? • What motivates them to buy? • How do they use the product? • What is important to them in a product? • How do they look at life? • Where are they?

  21. SWOT analysis Advertising Strategy

  22. What is a SWOT? • It is the organization and summary of the information obtained in the situation analysis: • The company’s • Strengths • Weaknesses • The environment’s • Opportunities • Threats • Answers the so what? Of the situation analysis

  23. What’s all about?

  24. The purpose of a SWOT analysis • To define the main issues that must be addressed in the strategic plan • Clarifies opportunities • Identifies problems • Issues discovered in the SWOT will be used to define IMC objectives, strategies and tactics

  25. A good SWOT • Has a focus: Maybe more than one analysis • Searches extensively for competitors • Does not forget other areas of the company • Thinks as the consumer (internal/external) • Separates clearly internal from external sources

  26. Components of a SWOT • A complete SWOT analysis consists of two components: • Strengths/Weaknesses analysis • Opportunities/Threats analysis • Study Exhibit 4.4 of SWOT chapter

  27. Strengths and weakness • Internal factors reflect situation-based considerations within a company’s control • Key question: What factors internal to the company influence the current situation?

  28. Strengths • Strengths refer to what a company has done well or been successful at to date. • Examples • Dell’s ability to sell directly (Phone/Web) • Apple’s ability to come up with innovative designs

  29. Weaknesses • Weaknesses refer to what a company needs to correct or that has worked to a company’s disadvantage to date. • Examples • Dell’s inability to create a mystique among users. • Apple’s relaxed culture made difficult to make the company work as a one unit.

  30. Opportunities and threats • External factors reflect situation-based considerations beyond a company’s control • However, they have the potential to affect the future of the business • Key question What variables in the external environment affect the company’s challenges?

  31. Opportunities • Opp. refer to external factors that may benefit the company if pursued. • Examples • Baby boomers’ waistlines are expanding, so demand for baggy pants is stronger. • A weak economy might make business people look for better airfares (Priceline.com)

  32. Threats • Threats refer to external variables that may negatively affect the company if ignored • Examples: • A negative legal environment for tobacco companies. • A weak economy might force business people to look for cheaper airfares (AA, Continental)

  33. A short SWOT for Kodak’s disposable camera 1 High priced Lower priced brands are considered low quality Photos are not a priority for this market Brand is well known and trusted 2 3 4

  34. Bad image of DC - environmental issues Market makes frequent spontaneous trips Kodak’s DC offer the best film Kodak doesn’t offer a panoramic camera A short SWOT for Kodak 1 2 3 4

More Related