Swot Analysis And Its Importance In Developing Marketing Essay

Swot Analysis And Its Importance In Developing Marketing EssayFaced with a constantly changing purlieu, each business unit needs to develop a grocery repositinging information system (MkIS) that is capable of tracking trends and developments within the merchandiseplace. Each trend or development domiciliate then be categorized as an opportunity or a threat, and an assessment made of the feasibility and action needed if the g everywherening body is either to capitalize upon the opportunity or minimize the impact of the threat. Although SWOT digest is one of the best-known and most frequently used tools within the st driftgical purposening process, the quality of the outputs often suffer because of the relatively superficial manner in which it is conducted. There be several ways in which SWOT analyses can be made more rigorous, and therefore more strategically useful.STRENGTHSAreas of (distinctive) competence thatMust always be looked at relative to the competitionIf managed properly, is the basis for belligerent advantageDerive from the selling asset baseWEAKNESSESAreas of relative disadvantage thatIndicate priorities for marketing improvementHighlight the scopes and strategies that the planner should avoidTHREATSTrends within the environment with capabilityly negative impacts thatIncrease the risks of a strategyHinder the implementation of strategyIncrease the resources requiredReduce performance expectationsOPPORTUNITIESEnvironmental trends with positive outcomes that widen scope for higher levels of performance if pursued effectivelyHighlight new argonas for warlike advantage2) SWOT ANALYSIS IS THEREFORE DESIGNED TO ACHIEVE two PRINCIPAL OBJECTIVES1) To separate meaningful data from that which is merely interesting 2) To discover what management essential do to exploit its distinctive competencies within each of the market segments both now and in the largeer term. However, in examining opportunities and threats, the reader needs to recogn ize that they can never be viewed as absolutes. What might appear at first sight to be an opportunity may not be so when examined against the organizations resources, its culture, the expectations of its stake stamp downers, the strategies available, or the feasibility of implementing the strategy. At the risk of oversimplification, however, the purpose of strategy provision is to develop a strategy which will take advantage of the opportunities and overcome or circumvent the threats.For our purposes, an opportunity can be rulen as any arena of the market in which the community would enjoy a competitive advantage. These opportunities can then be assessed according to their attractiveness and the organizations probability of succeeder in this arena The probability of success is influenced by several factors, but most obviously by the termination to which the organizations strengths, and in particular its distinctive competences, match the key success requirements for operatin g effectively in the target market and exceed those of its competitors. Competence by itself is rarely sufficient in anything more than the short term since, stipulation time, competitive forces will erode this competence.2.1) IDENTIFYING STRENGTHS AND WEAKNESSESOur primary concern within this stage is with the ways in which organizations can most clearly identify their current maculation and the nature of their marketing capability. It is against the background of the picture that emerges from this analysis that the marketing planner should then be in a far better position to catch the process of deciding upon the detail of the organizations future direction and the ways in which strategy is to be formulated. The starting point in this process of strategic and marketing analysis involves a detailed marketing audit and review of marketing effectiveness. Together, the two techniques are designed to provide the strategist with a clear dread of The organizations current market posi tion The nature of environmental opportunities and threats The organizations ability to cope with the demands of this environment.The results of this analysis are then incorporated in a statement of Strengths, Weaknesses, Opportunities and Threats (SWOT), and after a measure of capability. Although in many markets it is often a relatively simple process to identify a whole series of environmental opportunities, a couple of(prenominal) organizations have the ability or the competences needed to capitalize upon more than a small number of these. Each business needs therefore to evaluate on a regular basis its strengths and weaknesses.Each factor is rated by management or an outside consultant according to whether it is a fundamental strength, a borderline strength, a neutral factor, a marginal weakness, or a fundamental weakness. By linking these ratings, a general picture of the organizations principal strengths and weaknesses emerges. Of course, not all of these factors are of eq ual importance either in an absolute sense or when it comes to succeeding with a specific business opportunity. Because of this, each factor should also be given a rating (high, medium or low) either for the business as a whole or for a particular marketing opportunity. have performance and importance levels in this way injects a great sense of perspective to the analysis and leads to four possibilities emerging in the form of a performance-importance matrix.another(prenominal) way of looking at issues of performance and importance involves counselinging specifically upon the organizations performance relative to the competition.On the basis of this sort of analysis it should be unornamented that, even when a business has a major strength in a particular area, this strength does not invariably translate into a competitive advantage. There are several possible explanations for this, the two most prominent of which are that it may not be a competence that is of any original impor tance to customers, or that it is an area in which competitors are at least equally strong. It follows from this that, in order to benefit from the strength, it must be relatively greater than that of the competitor.Having identified the organizations weaknesses, the strategist needs to return to consider again the relative importance of these weaknesses. There is often little to be gained from overcoming all of the organizations weaknesses, since some are unimportant and the amount of effort needed to convert them to a strength would quite simply not be repaid. Equally, some strength is of little reliable strategic value and to use them in anything other than a peripheral way is likely to prove of little real value.Recognizing this, the marketing planner should tension upon those areas of opportunity in which the firm currently has major strengths or where, because of the size of the opportunity and the potential returns, it is likely to prove cost-effective in acquiring or devel oping new areas of strength.In order to make better use of the SWOT framework, Mr. Piercy proposes five guidelines1) Focus the SWOT upon a particular issue or element, such as a specific product market, a customer segment, a competitor, or the individual elements of the marketing mix.2) Use the SWOT analysis as a mechanism for developing a shared vision for planning. This can be done by pooling ideas from a number of sources and achieving a team consensus most the future and the important issues.3) The kind of corporate-level strategy pursued by the company4) Business level strategy of the company and its nature.5) Company Strategy and its control and social organization for achieving that strategy2.2)1SWOT ANALYSIS AND MACRO ENVIRONMENT FOR DECISION MAKERSMany changes from the macro environment have the potential to cripple even the best of strategies and must therefore be watched. Managers should note any changes in the environmental factors as conducive to innovation. Potentia l changes in exchange rates, especially unanticipated large ones, aboriginal bank policies that raise interest rates, and taxation laws, along with demographic and socio political changes, all have the potential to impact firm strategies. Managers should examine them carefully for potential threats and opportunities. In particular, they should examine the potential impact of changes in tax policies concerning the Internet. This analysis of a firms current performance, appraisal of its business model, appraisal of its competitors business models, analysis of diligence attractiveness, assessment of its macro environment, projection of the evolution of the Internet, and a forecast of its environmental changes is sometimes called a strengths and weaknesses, opportunities, and threats (SWOT) analysis.After an analysis of where the firm is now, a manager may also resolve not to pursue profits as previously planned but to hone the firms capabilities to fit another firms portfolio of cap abilities so that it can be acquired by the other firm. On the other handwriting, a firm whose exit strategy had been to be acquired, with no intention of ever making profits, may decide that it now wants to become profitable after all. In all these cases, a firm has decided to move into new areas. It is now intent on doing received things that it had not done before. If moving into these new areas requires entirely new capabilities, the objective to do so is sometimes referred to as a firms strategic intent.WAL-MART3) COMPANY memorial AND ITS FOUNDERVISION2Samuel Moore Walton, the trillionaire boy scout of Bentonville, Arkansas, built an empire on a fervid belief in value, pioneered by ideas like empowerment, and revolutionized retailing in the process. Dead at 74 after a long fight with cancer, he did not invent the discount department store, although it heavy(a)ly seems possible that he didnt. He grabbedhold of the leading edge of retailing in 1962 and never let go, creating a value-powered merchandising machine that seems certain to outlive his memory..In 1994, the still-young company earned $2.3 billion on sales of $67 billion. A $1,650 investment in 100 Wal-Mart shares in 1970, when they began trading, is worth $3 million today. He taught American business that the spacious amount of American people want value. He saw the future, and he helped make the future. According to a retail executive, while Walton was one of the great showmen of retailing, if he had been a television preacher hed have become Pope. As a manager he applied such concepts as a flat organization, empowerment, and gain-sharing long before any one gave them those names. In the 1950s, he shared information and profits with all employees. He ingested as much data as he could to get close to the customer and closer to the competition. He stressed flexibility and action over deliberation. Wal-Mart is ultimately a monument to consumers it has saved them billions. Sam Walton real believ ed that nothing happens until a customer walks into a store with a purpose, buys something, and walks out. His philosophy was simple satisfy the customer. Operating nearly 2,000 stores in 47 states, Wal-Mart remains the draw in the discount store intentness. In addition, with over 400 Sams Clubs, Wal-Mart is a major factor in the Warehouse Club industry. Combining general intersection and groceries, Supercenters represent the companys fastest growing segment, with 65 to 70 stores planned in fiscal 1995 on a base of 68.Walton long ago wanted manufacturers to see themselves, wholesalers, retailers, and consumers as parts of a single customer-focused process rather than as participants in a series of transactions. He personally and permanently altered the birth between manufacturers and retailers, which has historically been, to put it politely, antagonistic.About five years ago he asked Procter Gamble executives to view a focus group of Wal-Mart executives talking nearly their pr ickly relationship with the packaged-goods company. It was sobering. His strategy clearly was that we ought to be able to work together to disdain the costs of both the manufacturer and the distributor and get lower costs for consumers. Walton got both sides to focus on distribution costs and how to cut them. Wal-Mart linked PG with its computers to allow automatic reordering, thus avoiding bulges in order cycles. With better coordination of buying, PG could plan more consistent manufacturing runs, rationalize distribution, and lower its costs, passing on some of the savings. This systematic approach is now in broad use throughout the industry. Walton has been exposit as a visionary, and he clearly was that. His vision was apparent in 1956 as a Ben Franklin variety store owner. To lure one of his first store managers, Bob Bogle, away from the state health department, Walton showed him the books and offered to pay him 25 percent of the stores net profit in addition to salary.4) STR ATEGIC ANALYSIS OF WAL-MARTS SUCCESS-WAL-MARTS COMPETITIVE CAPABILITIES4.1) emulous EnvironmentalChange Rivals are constantly changing their strategies and such changes, especially new support strategies, have to be watched very carefully. A firm is say to pursue a new game strategy if by performing value chain, value shop, or value configuration activities that differ from what the dominant system of logic of the industry dictates, or by performing the same activities differently than the logic dictates, the firm is able to offer superior customer value. Wal-Marts early strategies were new game strategies. It decided to move into small towns, saturate adjoining towns with stores, build distribution centers, and improve logistics, with an empowering culture and information technology to match. This allowed Wal-Mart to achieve high economies of scale and negociate power over its suppliers. This in turn allowed the firm to offer its customers lower prices than its competitors.3Lo w-cost operations as the result of a combination of high productivity, low over heads, low labour costs, better purchasing skills, a limited product range, or low-cost distribution. Amongst those to have achieved this are the low-cost supermarket chains.4The global, or single brand, enables a product to adapt to new international opportunities. Travellers abroad, whether businessmen or tourists, are more likely to buy a brand they know and trust as it reduces the risk of the purchase. The greater the development of international media, the greater the opportunities for the single brand. The advent of Sky television and the increasing international coverage of satellite transmissions are examples of this broadening reach. When a brand goes international, it can attract the interest of large retailers involved worldwide and successfully implemented by the like Wal-Mart to attract international customers. The global brand, having acquired a wider international bearing and awareness, provides a lever for entering other markets. Be assumed to be to maintain continued growth in the US and to smother domination internationally in targeted markets, including the Americas and Continental atomic number 63. Its corporate objective is to achieve an annual growth above the average gained by the food retail industry in general, and above the average annual growth rate achieved by Wal-Mart over the last three years. An annual turnover growth rate of 5 per cent above ination with prots of 7 per cent might be set. Additional objectives (or targets) might be to increase customer obedience as measured by customer repeat shopping visits to Wal-Mart outlets. Wal-Marts international marketing plan would cover the basic framework outlined in board 9.1. It should indicate the groups business mission and associated corporate objectives. Thus, the Wal-Mart business mission could be assumed to be to maintain continued growth in the US and to extend domination internationally in tar geted markets, including the Americas and Continental Europe. Its corporate objective is to achieve an annual growth above the average gained by the food retail industry in general, and above the average annual growth rate achieved by Wal-Mart over the last three years. An annual turnover growth rate of 5 per cent above ination with prots of 7 per cent might be set. Additional objectives (or targets) might be to increase customer loyalty as measured by customer repeat shopping visits to Wal-Mart outlets.4.2) SWOT ANALYSIS5StrengthsThis Company has reputation of value for your money, convenience and a wide range of takings all in one store.This company is famous among the world over customer with respect to value the customers money and providing vides range of goods of different categories.This Company has increase its market share very sharply with in few years the years both domestically and through acquisition globally. For example, it purchased the UK based Company ASDA engage in the business of retailing.The Wal-Mart has a very powerful strength in incorporating information technology in its business. This is very simple way in which the company operates its logistic operations efficiently in international market and also able to procure goods on timely basis.The Wal-Mart basic aim to improve its HRM department and hired the best people in their profession. Talent is key to Wal-Marts business, and its invests time and resources into the training and retention of its people. WeaknessesThis is the fact that company is weak in some area of human resource management where it runs on vast span of control.The company sold the products of many products sector like clothing, food, electronics, etc and there is no flexibility to focus on some sector of economy as its competitors do their business.The Company claimed that it operates on a global basis but this is the fact that it has a presence in few other countries. OpportunitiesIt has the opportunity to take o ver, merge with or from of organization who are operated on the world basis and focus on Europe and Asian Markets. The Stores are only in a few countries and opportunity exists to expand in large consumer markets India and China.New locations and stores types are mobbing from large super centres to topical anesthetic malls.Continued strategy for the opening of large super centers. ThreatsAS this Company claimed that its brand name is No. 1 among the retailing business. On the other hand you are the target of competitors whether they are from local business market or from international market.As the company operate in international business market then there is a probability that the Company will face political and social problems in countries where this operate.Intense price competition in a threat.5) CONCLUSIONCompleting a SWOT would have identified the threat as a focus on immigration and the possibility of lost crops imputable to un-harvested products. That threat turned to a we akness for those organizations that did not develop alternative strategies. For those who made the investments in increased mechanical harvesting, no business interruption occurred. For those who waited, it became a competitive disadvantage. Being able to forecast changes in the market and business will lead to insight regarding potential issues and opportunities to be faced in the future. The insights gained from act in this forecasting exercise can then be used to create plans of action to deal with the issues before they can have detrimental effects on the functioning of the business.Although SWOT analysis is a potentially useful input to the strategic planning process, in practice it often suffers from a number of weaknesses. Amongst the most common of these is that The planner fails to relate strengths and weaknesses to critical success factors Strengths and weaknesses are seen in absolute terms rather than in relation to the competition The elements of the analysis are insuf ficiently specific Competitors capabilities are underestimated and/or misunderstood The focus is upon marketing-specific issues rather than reflecting a broader companyperspective Emphasis is placed largely upon the hard or quantifiable elements and fails to takeaccount of managerial attitudes, cultures, capabilities and competencies.SWOT analysis can also be made more effective by thinking To what extent has the relative importance of the various elements been identified? To what extent have the implications of each of the elements been examined? To what extent does the management team really recognize the significance of theelements? To what extent have attempts been made in the past to manage the SWOT analysisoutcomes proactively?