FOUNDATION FOR MARKET STRATEGY SELECTION AND ANALYSIS
FOUNDATION FOR MARKET STRATEGY
SELECTION AND ANALYSIS
THE STRATEGIC APPROACH TO MARKETING
MANAGEMENT
Strategic Marketing Management
Strategic marketing management is the process of implementing your business’ mission
through specific and strategic processes in order to maximize your current marketing plan.
The Benefits of Strategic Marketing Management
The idea behind strategic marketing management is to adapt to your market as things change around
you. The goal remains the same, but the path that leads you towards your goal can change.
The benefits of implementing strategic marketing management are fairly recognizable in the business
world.
Here are a few of the advantages in implementing a strategic marketing strategy:



A better understanding of the market
Helps identify the strategic direction
Can have a big pay off
All in all, there are many advantages to this style of management. By implementing strategic
marketing management, you’re making strategic decisions to better your business and your
understanding of the market as a whole.
CUSTOMER ANALYSIS FOR MARKET
STRATEGY SELECTION
Customer Analysis
A customer analysis (or customer profile) is a critical section of a company's business plan or
marketing plan. It identifies target customers, ascertains the needs of these customers, and then
specifies how the product satisfies these needs. A customer analysis can be broken down into a
behavioral profile (why your product matches a customer's lifestyle) and a demographic profile
(describing a customer's demographic attributes).
A customer profile is a simple tool that can help business better understand current and potential
customers, so they can increase sales and grow their business. Customer profiles are a collection of
information about customers that help determine why people buy or don't buy a product. Customer
FOUNDATION FOR MARKET STRATEGY SELECTION AND ANALYSIS
profiles can also help develop targeted marketing plans and help ensure that products meet the
needs of their intended audience.
Behavioral Analysis (Customer Buying Criteria)
A behavioral analysis of customers (or psychographic profile) seeks to identify and weigh the
relative importance of factors consumers use to choose one product over another. These factors,
sometimes called buying criteria, are key to understanding the reasons that customers choose to
buy your product (or service) versus the products offered by your competitors. The four major
criteria that customers use to distinguish competing products
are: price, quality, convenience andprestige.
Customer Demographics
The second major component in customer analysis is identifying target market segments
that are predisposed to preferring your products over those of your competitors. A market segment
is a sub-set of a market made up of people or organizations with one or more characteristics that
cause them to demand similar product and/or services based on qualities of those products such as
price or function. A marketing program aimed at individual segments needs to understand and
capitalize on the group's differences and use them strategically in all advertising campaigns.
The Customer Analysis
1. Identify its target customers
2. Convey the needs of these customers
3. Show how its products and services satisfy these needs
COMPETITOR MARKET SELECTION
ANALYSIS
A Marketing Competitor Analysis is a critical part of your own marketing strategy. By doing the
analysis, you can formulate how to run your business. This can be seen as a reactive approach. That
is to say that you are basing your strategy as a reaction to how your competitor will run his
company.
Marketing competitor analysis is done with relation to your competitors. That is to say, you do the
analysis of your competitor’s firm. In marketing competitor analysis, you assess the strengths and
weaknesses of your rivals. You try to figure out what situations may provide an opportunity for
them. Find situations which are likely to become a threat for them as well.
How to do a Marketing Competitor Analysis
The first step of performing a marketing competitor analysis is to identify your current competitors.
Not only that but you also need to identify your potential future competitors. There can be two ways
of doing that;
1. Look at them from a customer’s point of view
FOUNDATION FOR MARKET STRATEGY SELECTION AND ANALYSIS
2. Look at them from their point of view
Competitor Array
Another interesting technique to determine the marketing competitor analysis is by using
the competitor array. It’s a simple tool where you follow a few steps to determine how your
competitors are doing. The steps include the following;
1. Define the industry: The nature of the industry you and your competitors are in. The scopes
available to produce your goods and services.
2. Find out your competitors: An industry is likely to have multiple competitors. You need to
find out who is your genuine competitor that can match your level.
3. Key success factors: You find out what factors are the leading prospects in becoming
successful. It does not matter if those factors have been used by you or your competitors.
4. Rank those factors by weighing them
5. Rate your competitors: You give your competitors a rating based on how much they each
weight on those key factors.
This process will help you realize which competitor is contributing more in the market. It is a big part
of the marketing competitor analysis. Once you figure out who is the leading pack among the rest, you
can make your marketing strategy based on them.
COMPETITIVE INDUSTRY ANALYSIS
What is Industry Analysis?
Industry analysis is a market assessment tool used by businesses and analysts to understand the
competitive dynamics of an industry. It helps them get a sense of what is happening in an industry,
e.g., demand-supply statistics, degree of competition within the industry, state of competition of the
industry with other emerging industries, future prospects of the industry taking into account
technological changes, credit system within the industry, and the influence of external factors on the
industry.
Industry analysis, for an entrepreneur or a company, is a method that helps to understand a
company’s position relative to other participants in the industry. It helps them to identify both the
opportunities and threats coming their way and gives them a strong idea of the present and future
scenario of the industry. The key to surviving in this ever-changing business environment is to
understand the differences between yourself and your competitors in the industry and use it to your
full advantage.
Types of industry analysis
There are three commonly used and important methods of performing industry analysis. The three
methods are:
1. Competitive Forces Model (Porter’s 5 Forces)
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The Competitive Forces Model is an important tool used in strategic analysis to analyze the
competitiveness in an industry. The model is more commonly referred to as the Porter’s Five Forces
Model, which includes the following five forces: intensity of rivalry, threat of potential new
entrants, bargaining power of buyers, bargaining power of suppliers, and threat of substitute goods
and/or services.





Threat of Potential Entrants
Bargaining Power of Buyers
BARGAINING POWER OF SUPPLIERS
Threat of Substitute Goods/Services
Power of Complementary Good/Service Providers
2. Broad Factors Analysis (PEST Analysis)
Broad Factors Analysis, commonly called the PEST Analysis, is a key component of external analysis.
A Broad Factors Analysis assesses and summarizes the four macro-environmental factors — political,
economic, socio-demographic (social), and technological. These factors have significant impacts on a
business’s operating environment, posing opportunities and threats to the company and all of its
competitors. Broad Factors Analysis is widely used in strategic analysis and planning because it helps
companies determine the risks and opportunities in the marketplace. That, in turn, becomes an
important consideration when companies are developing corporate and business strategies.
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Political Factors
Political factors are factors within the regulatory environment of a particular industry or business.
Economic Factors
Economic factors are things that influence the macroeconomy.
Socio-Demographic (Social) Factors
Socio-demographic factors are short for social and demographic factors, which concern population
demographics and the characteristics of a company’s target customers.
Technological Factors
Technological factors have become increasingly important for many businesses in recent years due
to the prevalence of information technology and mobile devices.
3. SWOT Analysis
A SWOT Analysis is one of the most commonly used tools to assess the internal and external
environments of a company and is part of a company’s strategic planning process. In addition, a
SWOT analysis can be done for a product, place, industry, or person. A SWOT analysis helps with
both strategic planning and decision-making, as it introduces opportunities to the company as a
forward-looking bridge to generating strategic alternatives.
SWOT is an acronym for Strengths, Weaknesses, Opportunities, and Threats.
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SWOT Analysis – Internal and External Factors
A SWOT analysis is divided into two main categories: internal factors and external factors.
Key Takeaways from a SWOT Analysis
A SWOT analysis is a simple and effective framework for identifying strengths, weaknesses,
opportunities, and threats that a company faces. It is important to leverage strengths, minimize threats,
and to take advantage of available opportunities. Conducting a SWOT analysis is useful for strategic
planning and for determining the objectives of a company.
Environmental Analysis
Environmental analysis is a strategic tool. It is a process to identify all the external and internal
elements, which can affect the organization’s performance. The analysis entails assessing the level of
threat or opportunity the factors might present. These evaluations are later translated into the
decision-making process. The analysis helps align strategies with the firm’s environment.
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There are many strategic analysis tools that a firm can use, but some are more common. The most
used detailed analysis of the environment is the PESTLE analysis. This is a bird’s eye view of the
business conduct. Managers and strategy builders use this analysis to find where their market
currently. It also helps foresee where the organization will be in the future.
PESTLE analysis consists of various factors that affect the business environment. Each letter in the
acronym signifies a set of factors. These factors can affect every industry directly or indirectly.
The letters in PESTLE, also called PESTEL, denote the following things:
 Political factors
 Economic factors
 Social factors
 Technological factors
 Legal factors
 Environmental factor
INTERNAL MARKET VS SELF-ANALYSIS
An internal analysis examines your organization's internal environment in order to assess its
resources, competencies, and competitive advantages. Performing an internal analysis allows you to
identify the strengths and weaknesses of your organization.
Self-analysis is a tool that involves performing a critical analysis of one's own goals, interests,
skills, and experience. Among its many applications in the business world are employee
development, team performance, and organizational change efforts. But self-assessment is perhaps
most valuable for would-be entrepreneurs considering starting a new business. "A business is merely
an extension of the people managing it and mirrors their abilities," notes the Entrepreneur Magazine
Small Business Advisor. "As an entrepreneur, you have to know your strengths and weaknesses so
you can compensate in some way for the areas where you will not be proficient. You can determine
your strengths and weaknesses by evaluating the major accomplishments in your personal and
professional
life
and
the
skills
required
to
complete
these
tasks
Strategic portfolio analysis
Strategic
portfolio
analysis involves identification and evaluation of
all
products
or service groups offered by company on the market (so called product mix) and preparing specific
strategies for every group according to its relative market share and actual or projected sales growth
rate. It can be also used to make strategic decision about strategic business units.
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Portfolio analysis in strategic management allows to answer key questions how to shape the present
and future business portfolio (of product or services) in order to reduce the risk of functioning in a
changing environment, and increase the effects of the implemented strategy.
Methods of portfolio analysis used in strategic analysis
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
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Technological portfolio
ADL matrix
BCG matrix
Fig. 1. BCG growth-share matrix

Hofer matrix
Fig.1. Hofer matrix example
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McKinsey matrix
Fig. 1 Interpretation of the company's position in the matrix

GE matrix
Fig. 1 Interpretation of the company's position in the matrix
Sustainable Competitive Advantages
Sustainable competitive advantages are company assets, attributes, or abilities that are
difficult to duplicate or exceed; and provide a superior or favorable long term position over
competitors.
FOUNDATION FOR MARKET STRATEGY SELECTION AND ANALYSIS
Types of Sustainable Competitive Advantages
1.
2.
3.
4.
5.
6.
7.
8.
9.
Low Cost Provider/ Low pricing
Market or Pricing Power
Powerful Brands
Strategic assets
Barriers To Entry
Adapting Product Line
Product Differentiation
Strong Balance Sheet / Cash
Outstanding Management / People
METHODS USED TO ANALYZE INTERNAL
STRENGHTS AND WEAKNESSES
SWOT analysis
A SWOT analysis is defined as a set of methods used to examine both internal and external factors
that affect the performance of a company. This analysis is mostly applied in the initial stages before
the company launches any new plans, especially strategic marketing plans. In this analysis, there are
four contributing elements need to be examined to complete the analysis, namely strengths,
weaknesses, opportunities and threats. Among them, strengths and weaknesses refer to any criteria
within and under the control of a company; therefore, they are also called internal factors. In
contrast, external analysis focuses on examining outside factors. These factors are then grouped in
opportunities and threats for the enterprise.
SWOT analysis
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PEST analysis
This analysis PEST standing for Political, Economic, Sociological, and Technological is a method used
to analyze the outside impacts on the performance of any enterprise. In the analysis process,
business owners are provided with various external factors that directly and indirectly exert impact
on their businesses.
MOST analysis
This method is suitable for any company looking for performing internal analysis since it helps the
owners sure that they are on the right pattern. The name MOST is an acronym for mission,
objectives, strategies, and tactics. The business needs to define where they want to drive their
business to, what goals do they need to obtain to achieve their mission, what is the detail plan, and
how to perform the defined plan.
Heptalysis
FOUNDATION FOR MARKET STRATEGY SELECTION AND ANALYSIS
This is a model that studies the important factors of a business venture at the beginning of
assessment process. This analysis is completed by analyzing 7 fundamental elements which are;
market opportunity, product or solution, execution plan, financial engine, human capital, potential
return, and margin of safety.
De Bono’s Six Thinking Hat
This method is mostly suitable when you want some new ideas for your business. Using this analysis
during brainstorming process helps you generate different ideas and examine them to figure out the
most appropriate one. However, this analytical tool restricts people to think in certain directions. To
complete De Bono’s Six Thinking Hats, there are 6 moods you should think about: pure and logical
facts, creativity, positivity, negativity, emotions, and ability to control.
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Catwoe
This business analysis used to force businessmen to brainstorm their goals within limited time. There
are 6 essential factors: customers, actors, transformation process, world view, owners, and
environmental constraints to make this analytical tool, which also make up the acronym for its
name.