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DevelopingCompetitiveAdvantageandStrategicFocus5CHAPTER邢臺人才網(wǎng)SWOTAnalysis
(Strengths,Weaknesses,Opportunities,Threats)“Awidelyusedframeworkfororganizingandutilizingthepiecesofdataandinformationgainedfromthesituationanalysis…”EncompassesbothinternalandexternalenvironmentsOneofthemosteffectivetoolsintheanalysisofenvironmentaldataandinformation2EffectivenessofAnalysisToolsExhibit5.13MajorBenefitsofSWOTAnalysisSimplicityLowerCostsFlexibilityIntegrationandSynthesisCollaborationFromExhibit5.24CommonCriticisms
ofSWOTAnalysisAllowsfirmstocreatelistswithoutseriousconsiderationoftheissuesOftenbecomesasterileacademicexerciseofclassifyingdataandinformation5MakingSWOTAnalysisProductiveStayFocusedSearchExtensivelyforCompetitorsCollaboratewithotherFunctionalAreasExamineIssuesfromtheCustomers’PerspectiveLookforCauses,NotCharacteristicsSeparateInternalIssuesfromExternalIssuesFromExhibit5.36StayFocusedItisamistaketocompleteonegenericSWOTanalysisfortheentireorganizationorbusinessunit.WhenwesaySWOTanalysis,wemeanSWOTanalyses.7SearchExtensivelyforCompetitorsInformationoncompetitorsisanimportantaspectofaSWOTanalysis.Lookforallfourtypesofcompetition:BrandcompetitorsProductcompetitorsGenericcompetitorsTotalbudgetcompetitors8CollaboratewithOtherFunctionalAreasInformationgeneratedfromtheSWOTanalysiscanbesharedacrossfunctionalareas.SWOTanalysiscangeneratecommunicationbetweenmanagersthatordinarilywouldnotcommunicate.Createsandenvironmentforcreativityandinnovation.9ExamineIssuesfrom
theCustomers’PerspectiveTodothis,theanalystshouldask:Whatdocustomers(andnoncustomers)believeaboutusasacompany?Whatdocustomers(andnoncustomers)thinkofourproductquality,customerservice,price,overallvalue,convenience,andpromotionalmessagesincomparisontoourcompetitors?Whatistherelativeimportanceoftheseissuesascustomersseethem?Takingthecustomers’perspectiveisthecornerstoneofawelldoneSWOTanalysis.10BreakingDownManagerialClichésintoCustomer-OrientedStrengthsandWeaknessesExhibit5.411LookforCauses,NotCharacteristicsCausesforeachissueinaSWOTanalysiscanoftenbefoundinthefirm’sandcompetitors’resources.Majortypesofresources:
Financial-Organizational-Intellectual-Informational
Legal-Relational
Human-Reputational12SeparateInternalfromExternalIssuesFailuretounderstandthedifferencebetweeninternalandexternalissuesisoneofthemajorreasonsforapoorlyconductedSWOTanalysis.SocraticAdvice:“Knowthyself”“Knowthycustomer”“Knowthycompetitors”“Knowthyenvironment”13TheElementsofaSWOTAnalysisStrengthsandWeaknessesScaleandCostEconomiesSizeandFinancialResourcesIntellectual,LegalandReputationalResourcesOpportunitiesandThreatsTrendsintheCompetitiveEnvironmentTrendsintheTechnologicalEnvironmentTrendsintheSocioculturalEnvironment14SWOT-DrivenStrategicPlanningFourissuesthemarketingmanagermustrecognize:Theassessmentofstrengthsandweaknessshouldlookbeyondproductsandresourcestoexamineprocessesthatmeetcustomerneeds.Offersolutionstocustomerproblemsinsteadofspecificproducts.Achievinggoalsandobjectivesdependsontransformingstrengthsintocapabilitiesbymatchingthemwithopportunities.Weaknessescanbeconvertedintostrengthswithstrategicinvestment.Threatscanbeconvertedintoopportunitieswiththerightresources.Weaknessesthatcannotbeconvertedbecomelimitationswhichmustbeminimizedifobviousormeaningfultocustomers.15SWOTMatrixAfour-cellarrayusedtocategorizeinformationattheconclusionofaSWOTanalysis.Shouldbebasedoncustomerperceptions,nottheperceptionsoftheanalyst.Elementswiththehighesttotalratingsshouldhavethegreatestinfluenceinmarketingstrategy.Focusoncompetitiveadvantagesbymatchingstrengthswithopportunities.AnalysisoftheSWOTMatrix16TheSWOTMatrixExhibit5.617QuantitativeAssessmentof
ElementsWithintheSWOTMatrixExhibit5.718Strengths,weaknesses,opportunities,andthreats:Whichisthemostimportant?Why?HowmightyourresponsechangeifyouweretheCEOofacorporation?Whatifyouwereacustomerofthefirm?Anemployee?Asupplier?DiscussionQuestion19Competitiveadvantagescanarisefrommanyexternalorinternalsources.Competitiveadvantagesrefertorealdifferencesbetweencompetingfirms.Threebasicstrategiesforcompetitiveadvantage:OperationalExcellenceProductLeadershipCustomerIntimacyDevelopingandLeveragingCompetitiveAdvantages20OperationalExcellenceFocusonefficiencyofoperationsandprocessesLowercostoperationsleadstolowerpricesforcustomersProductLeadershipExcellenceintechnologyandproductdevelopmentMostadvanced,highestqualityproductofferinginindustryCustomerIntimacyUnderstandingcustomersbetterthanthecompetitionDeveloplong-termcustomerrelationshipsCompetitiveAdvantageStrategies21CommonSources
ofCompetitiveAdvantageFromExhibit5.8·RelationalAdvantages·ProductAdvantages·LegalAdvantages·PricingAdvantages·OrganizationalAdvantages·PromotionAdvantages·HumanResourcesAdvantages·DistributionAdvantages22Supportorcontradictthisstatement:“Giventherealitiesoftoday’seconomyandtherapidchangesoccurringinbusinesstechnology,allcompetitiveadvantagesareshortlived.Thereisnosuchthingasasustainablecompetitiveadvantagethatlastsoverthelongterm.”Defendyourposition.DiscussionQuestion23Fourmajordirectionsforstrategicefforts:Aggressive(manyinternalstrengths/manyexternalopportunities)Diversification(manyinternalstrengths/manyexternalthreats)Turnaround(manyinternalweaknesses/manyexternalopportunities)Defensive(manyinternalweaknesses/manyexternalthreats)Thesearethemostcommon,butothercombinationsofstrengthsandweaknessesarepossible.EstablishingaStrategicFocus24StrategyCanvasIdentifiesfactorsthattheindustrycurrentlycompetesonandwhatcustomersreceivefromexistingproductofferings(capturedbythehorizontalaxis)Identifiestheofferinglevelreceivedbybuyersforeachfactor(capturedbytheverticalaxis)Highlevelsmeanthatacompanyinvestsmoreandoffersbuyersmoreofthatfactor.Identifiesacompany’srelativeperformanceacrossitsindustry’sfactorsofcompetition(capturedbythevaluecurve)25StrategyCanvasfor
SouthwestAirlinesExhibit5.1026TheFourActionsFrameworkWhichfactorsthattheindustrytakesforgrantedshouldbeeliminated?ThesefactorsmaynolongerhavevalueforbuyersWhichfactorsshouldbereducedwellbelowtheindustry’sstandard?Haveproductsbeenoverdesignedinaracetobeatcompetition?Whichfactorsshouldberaisedwellabovetheindustry’sstandard?Hastheindustryforcedcustomerstomakecompromises?Whichfactorsshouldbecreatedthattheindustryhasneveroffered?Whatarethepotentialnewsourcesofvalueforbuyers?27WhatMakesGoodStrategy?Ultimately,goodstrategyisintheeyeofthebeholder.Inmarketing,therearenorulestofollowandnoonetoholdyourhand.Thereisonlythecoldhardtruthofcustomersandcompetition.Goodstrategyisaboutmatchingthefirm'sstrengthstotheavailableopportunities.BlueOceanStrategydefinesgoodstrategyashavingthesethreecharacteristics:Focus–Goodstrategydoesnotdiffusethecompany'seffortsacrossallkeyfactorsofc
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