Industry Analysis1
Industry Analysis1
Industry Analysis1
understanding of its position relative to other companies that produce similar products or services. Understanding the forces at work in the overall industry is an important component of effective strategic planning.
Source: http://www.answers.com/topic/industry-analysis
Porters Model
1.
Economies of scale Product differentiation Capital requirements Switching costs Efficient distribution system
Product bought is a large percentage of the buyers costs Product bought is undifferentiated Buyer earns low profits Buyer threatens to backward integrate Substitutes exist
the amount and intensity of competition in a category. Product categories with intense competition are not attractive. The following are the characteristics of categories with intense rivalry:
Many or balance competition Slow growth High fixed costs Lack of product differentiation Personal rivalries
Over capacity, lower prices, new competitive paradigm Lower prices, higher quality, flexible service, encourage new competition Higher prices, lower quality, reduced supply
Example
Heineken http://www.slideshare.net/jin88lin/heineken-case-study-analysis-presentation
Example
Walmart
http://classes.bus.oregonstate.edu/.../Industry%20analysis%20example.doc
Pressure Currently, there are three main incumbent companies that exist in the same market as Wal-Mart: Sears, K Mart, and Target. Target is the strongest of the three in relation to retail. Target has experienced tremendous growth in their domestic markets and have defined their niche quite effectively. Sears and K-Mart seem to be drifting and have not challenged K-Mart in sometime. Mature industry life cycle.
pressure
The individual buyer has little to no pressure on Wal-Mart. Consumer advocate groups have complained about Wal-Marts pricing techniques. Consumer could shop at a competitor who offers comparable products at comparable prices, but the convenience is lost.
pressure Since Wal-Mart holds so much of the market share, they offer a lot of business to manufacturers and wholesalers. This gives Wal-Mart a lot of power because by Wal-Mart threatening to switch to a different supplier would create a scare tactic to the suppliers. Wal-Mart could vertically integrate. Wal-Mart does deal with some large suppliers like Proctor & Gamble, Coca-Cola who have more bargaining power than small suppliers.
When it comes to this market, there are not many substitutes that offer convenience and low pricing. The customer has the choice of going to many specialty stores to get their desired products but are not going to find Wal-Marts low pricing. Online shopping proves another alternative because it is so different and the customer can gain price advantages because the company does not necessarily have to have a brick and mortar store, passing the savings onto the consumer.
One complementor that exists for Wal-Mart is Sams Wholesale Clubs. Although the same company owns this, it complements Wal-Mart by offering the same products in wholesale form, making the company more profitable. Suppliers of goods need to have innovative products to attract customers. For the most part, complementors do not affect Wal-Marts business model
MARKET ANALYSIS
Market Analysis
Dimensions according to David Aaker Market size (current and future) Market growth rate Market profitability Industry cost structure Distribution channels Market trends Key success factors
Source: http://www.netmba.com/marketing/market/analysis/
Market Size
Actual refers to entire market size; i.e. total market
of soft drinks, shampoo, etc. Estimate can be known through customer survey, published sources as government and trade Potential untapped market, new use/user
Small markets
Market Growth
Market size in the future Increasing market means more sales and profit;
Market Profitability
There are five factors that influence profitability: Buyer power Supplier power Barriers to entry Threat of substitute products Rivalry among firms in the industry
effectiveness in performing these activities efficiently, so that the amount that the customer is willing to pay for the products exceeds the cost of the activities in the value chain. It is in these activities that a firm has the opportunity to generate superior value. A competitive advantage may be achieved by reconfiguring the value chain to provide lower cost or better differentiation.
Source: http://ph.images.search.yahoo.com/search/images?_adv_prop=image&fr=yfp-t-711&va=example+of+value+chain+analysis
Distribution Systems
The following aspects of the distribution system are useful
in a market analysis: Existing distribution channels - can be described by how direct they are to the customer. (see Kantar World Panel Consumer Index) Trends and emerging channels - new channels can offer the opportunity to develop a competitive advantage. Channel power structure - for example, in the case of a product having little brand equity, retailers have negotiating power over manufacturers and can capture more margin.
Market Trends
Changes in the market are important because they
often are the source of new opportunities and threats The relevant trends are industry-dependent, but some examples include changes in price sensitivity, demand for variety, and level of emphasis on service and support. Examples: Travel Lite
CUSTOMER ANALYSIS
Customer Analysis
Identifying customers segments, motivations, and
unmet needs. Collection and evaluation of data associated with customer needs and market trends through FGDs, customer satisfaction measurement, field testing, etc.
Average Income and Expenditure of Families by Region, at 2000 Prices: 2009 (in thousand PhP)
Average Income 129 227 136 116 115 139 158 90 95 99 111 98 88 98 99 96 88 62 Average Expenditure 110 197 108 94 90 119 135 77 85 89 92 78 71 83 85 82 74 54
Region Philippines NCR CAR Ilocos Cagayan Valley Central Luzon Calabarzon Mimaropa Bicol Western Visayas Central Visayas Eastern Visayas Zamboanga Peninsula Northern Mindanao Davao Soccsksargen Caraga ARMM
Age Group Philippines Under 5 5-9 10-14 15-19 20-24 25-29 30-34 35-39
Both Sexes 92,097,978 10,231,648 10,317,657 10,168,219 9,676,359 8,370,398 7,390,062 6,744,028 5,990,108
Male 46,459,318 5,291,880 5,329,978 5,230,893 4,914,379 4,229,958 3,719,437 3,419,039 3,037,467
Female 45,638,660 4,939,768 4,987,679 4,937,326 4,761,980 4,140,440 3,670,625 3,324,989 2,952,641
40-44
45-49 50-54 55-59 60-64 65-69 70-74 75-79 80-84
5,450,679
4,664,537 3,883,630 2,980,350 2,224,105 1,495,115 1,140,951 705,977 393,387
2,761,377
2,354,757 1,945,258 1,470,861 1,061,324 678,782 491,491 285,693 145,686
2,689,302
2,309,780 1,938,372 1,509,489 1,162,781 816,333 649,460 420,284 247,701
Age Group
Both Sexes
Male
Female
Philippines Under 5 5-9 10-14 15-19 20-24 25-29 30-34 35-39 40-44 45-49 50-54 55-59 60-64 65-69 70-74 75-79 80-84
92,097,978 10,231,648 10,317,657 10,168,219 9,676,359 8,370,398 7,390,062 6,744,028 5,990,108 5,450,679 4,664,537 3,883,630 2,980,350 2,224,105 1,495,115 1,140,951 705,977 393,387
46,459,318 5,291,880 5,329,978 5,230,893 4,914,379 4,229,958 3,719,437 3,419,039 3,037,467 2,761,377 2,354,757 1,945,258 1,470,861 1,061,324 678,782 491,491 285,693 145,686
45,638,660 4,939,768 4,987,679 4,937,326 4,761,980 4,140,440 3,670,625 3,324,989 2,952,641 2,689,302 2,309,780 1,938,372 1,509,489 1,162,781 816,333 649,460 420,284 247,701
85 and over
270,768
91,058
179,710
Population, by Region Census Years 1980, 1990, 1995, 2000, 2007 and 2010
Area Philippines National Capital Region Cordillera Administrative Region Ilocos Region Cagayan Valley Central Luzon
IVA- Calabarzon
IVB- Mimaropa Bicol Region Western Visayas Central Visayas Eastern Visayas Zamboanga Peninzula Northern Mindanao Davao Region SOCCSKSARGEN Caraga Autonomous Region in Muslim Mindanao Filipinos in Philippine Embassies/Consulates and Missions Abroad
12,609,803
2,744,671 5,420,411 7,102,438 6,800,180 4,101,322 3,407,353 4,297,323 4,468,563 4,109,571 2,429,224 3,256,140
11,757,755
2,559,791 5,106,160 6,843,643 6,400,698 3,915,140 3,230,094 3,952,437 4,159,469 3,830,500 2,293,346 4,120,795
9,320,629
2,299,229 4,674,855 6,211,038 5,706,953 3,610,355 2,831,412 3,505,708 3,676,163 3,222,169 2,095,367 2,803,045
7,750,204
2,033,271 4,325,307 5,776,938 5,014,588 3,366,917 2,567,651 3,197,059 3,288,824 2,846,966 1,942,687 2,362,300
6,349,452
1,774,074 3,910,001 5,393,333 4,740,318 3,054,490 2,221,382 2,811,646 2,933,743 2,399,953 1,764,297 2,075,238
4,603,435
1,408,040 3,476,982 4,525,615 3,886,097 2,799,534 1,771,860 2,226,169 2,198,683 1,722,727 1,371,512 1,560,480
2,739
2,279
2,851
2,830
2,336
2010
2015 2020 2025 2030 2035 2040
94,013,200
102,965,300 111,784,600 120,224,500 128,110,000 135,301,100 141,669,900
47,263,600
51,733,400 56,123,600 60,311,700 64,203,600 67,741,300 70,871,100
46,749,600
51,231,900 55,661,000 59,912,800 63,906,400 67,559,800 70,798,800
cleaning, food seasonings, coffee, canned goods, noodles, hair products, cooking oil and softdrinks.
Source: http://www.samplequestionnaire.com/customer-questionnaire-format.html
Competitor As product Who are the customers? What do they buy and how do they use it? Where do they buy? When do they buy? How do they choose? Why they prefer a product How do they respond to marketing programs?
Competitor Bs product
Competitor Cs product
Your Product
Convenience Taste Texture Health Benefits Performance/Energy Hunger Satisfaction Price (expect to pay $1.00 to $1.50 per bar) Packaging/Buy In Bulk Availability
COMPETITOR ANALYSIS
Competitor Analysis
Competitor analysis in marketing and strategic
management is an assessment of the strengths and weaknesses of current and potential competitors. This analysis provides both an offensive and defensive strategic context to identify opportunities and threats. Profiling coalesces all of the relevant sources of competitor analysis into one framework in the support of efficient and effective strategy formulation, implementation, monitoring and adjustment.[1]
Key questions: Who are they? What are the competing product features? What do they want? What is their current strategy?
Differential competitor advantage analysis i.e. Who has the competitive product advantage?
Beers
Ice cream
Tea
Juices
Bottled water
Video rentals
Baseball cards
Type of Bacteria
Benefits
Product volume
80 ml
I. Situation Analysis A. SWOT/TOWS Analysis B. PEST C. Industry Analysis a. Threat of New Entrants b. Bargaining Power of Buyers c. Bargaining Power of Suppliers d. Rivalry e. Substitutes
D. Market Analysis
a. Market size (current and future) b. Market growth rate c. Market profitability d. Industry cost structure e. Distribution channels f. Market trends g. Key success factors
E. Customer Analysis
a. Survey (Please refer to sample/guide) b. Profile (who are the customers, what do they buy and how do they use it, where do they buy, when do they buy, how do they choose, why they prefer a product, how they respond to marketing programs?)
F.