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Strategic Marketing: Developing Competitive Advantage & Strategic Focus

The document discusses SWOT analysis, a tool used to analyze internal strengths and weaknesses as well as external opportunities and threats. It provides details on how to conduct an effective SWOT analysis, including staying focused, extensively searching for competitors, collaborating across departments, examining issues from the customer perspective, looking for underlying causes, and separating internal and external factors. The document also discusses how to use the results of a SWOT analysis to develop competitive advantages and strategic focus.

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Ali Hashim
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40 views

Strategic Marketing: Developing Competitive Advantage & Strategic Focus

The document discusses SWOT analysis, a tool used to analyze internal strengths and weaknesses as well as external opportunities and threats. It provides details on how to conduct an effective SWOT analysis, including staying focused, extensively searching for competitors, collaborating across departments, examining issues from the customer perspective, looking for underlying causes, and separating internal and external factors. The document also discusses how to use the results of a SWOT analysis to develop competitive advantages and strategic focus.

Uploaded by

Ali Hashim
Copyright
© © All Rights Reserved
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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Strategic Marketing

Lecture 5
Developing Competitive Advantage & Strategic
Focus
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
Major Benefits of SWOT Analysis

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

• It is a mistake to complete one generic


SWOT analysis for the entire
organization or business unit.
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
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 an environment for creativity and
innovation.
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.
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
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.
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

4-11
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.
SWOT MATRIX
What should What should we
INTERNAL
we build on? be improving?
S W
EXPLOIT PREVENT

O T

What should we What should


be exploiting? ENVIRONMENT we be
preventing?
Class activity
• Considering the key elements of SWOT analysis, choose two
companies from the same (CAR) industry: one that is quite successful
and one that is struggling.
Quantitative Assessment of
Elements Within the SWOT Matrix
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
Common Sources of Competitive Advantage

· Relational Advantages · Product Advantages


· Legal Advantages · Pricing Advantages
· Organizational Advantages · Promotion Advantages
· Human Resources Advantages · Distribution Advantages
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.

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