Market Strategy Analysis Tools
Businesses use market strategy analysis tools in marketing to help them develop sound goals, objectives, strategies and tactics. These tools include such things as a SWOT analysis (an acronym for strengths, weaknesses, opportunities and threats), a customer analysis, a competitive analysis and a five forces analysis. The use of these tools can help identify opportunities and threats and assist in uncovering what might otherwise be blind spots for the organization.
Other People Are Reading
-
SWOT Analysis
-
A SWOT analysis is basically a brainstorming session designed to develop a list of the organization's strengths, weaknesses, opportunities and threats. The list is developed based on data gathered through an environmental analysis that includes both internal (employee data, customer data, sales data) and external (competitive information, industry assessment, economic data) inputs. Strengths and weaknesses are internal to the organization; opportunities and threats are external. Once lists are developed, they are ranked, and the top items in each category are used to develop strategies to meet organizational goals and objectives.
Customer Analysis
-
A thorough customer analysis provides important input for an organization in the development of its marketing strategy. A customer analysis considers both demographic (age, sex, income, geography, education levels) and psychographic (attitudes, interests and opinions) information. This information is used to guide decisions related to the selection of communication vehicles (radio, television, social media) as well as the development of messages designed to influence customers' purchase decisions. Customer analysis includes a review of past purchase behavior that can help guide future promotional decisions.
-
Competitive Analysis
-
Organizations need a thorough understanding of their competitors -- both direct and indirect. Direct competitors are those that offer basically the same thing as the company does. Burger King is a direct competitor of McDonald's, for instance. Indirect competitors represent any other alternative to what the company offers. A grocery store would be an indirect competitor to McDonald's, for example. Organizations should consider all the other options consumers have that would cause them to not choose what the company is offering.
Porter's Five Forces Analysis
-
Porter's "Five Forces Analysis" provides a useful framework in strategic planning. It was developed by Michael Porter, a Harvard Business School professor, and offers a guide about what businesses should consider as they develop their plan. The five forces include the threat of substitute products, the threat of rivals, the threat of new entrants to the market, the bargaining power of suppliers and the bargaining power of customers. Considering these impacts can help companies identify potential threats and opportunities.
-
References
Resources
- Photo Credit Jupiterimages/Photos.com/Getty Images
