SITUATION ANALYSIS

A situation analysis may also be known as an environmental analysis. Conduct an environmental analysis including the external environment, customer environment, and internal organizational environment.
A. External Environment Analysis
In this section, identify/describe all external forces for change that might affect the company, its future, and the future of its industry. Identify the external realities upon which your plan will be based. What are the competitive, technological, economic, political/legal/regulatory, societal/lifestyle/cultural, market, buyer behavior, channel of distribution, and other industry trends that translate into external opportunities and threats? Explicitly state how each of these forces can impact your company, your charge, and the outcomes you wish to accomplish. That is, do not just list these forces; relate them to the task at hand.
Keep in mind that tables and figures cannot stand alone in any marketing plan. In other words, if you want to use tables and figures, use them as support tools to illustrate the points you are trying to make in your written text.
1. Industry Analysis: What is the current situation in the industry? This description includes the size of the particular industry, trends in the industry, the industry outlook (expanding, stagnant, or contracting), success factors and failures of the industry, and so forth. Are these trends and developments likely to affect your charge? How?
2. Competitive Analysis: There are three major types of competitive forces. Brand competitors offer similar products with similar benefits and prices (e.g., monetary cost, time, effort, etc.), and serve/target the same customers. Product competitors offer products that compete in the same product class but have different features, benefits and price. Generic competitors offer products that satisfy the same need or solve the problem, but in a different way.
For example, assume that the brand in question is Apple iPad 4 and your charge is to come up with a marketing plan of how to promote the iPad 4. In your Product Statement you will have already talked about the iPad. Brand competitors in this case would be Samsung Galaxy, Motorola Xoom, Toshiba Excite, Lenovo IdeaPad, and so on. Product competitors could include Hewlett-Packard,Sony, and Dell computers. Generic competitors of iPad could include Regal Theatres, Cox Cable and so on, which satisfy consumers’ entertainment needs.
When discussing the competitive forces, focus on the brand and product competitors and describe these competitors in more detail. How big are they? What is their market share (in comparison to that of your company)? What is their income? How is the income derived? How do they spend their moneys? What are their strengths and weaknesses? How do they pose a threat to your company? What attracts consumers to their products? A detailed description of these competitors will aid your future SWOT and Issues analyses, and will give you ideas about target market and implementation.
3. Technology not only refers to the new types of products such as computers and digital products but also means the processes by which tasks are accomplished. This section examines how changes in technology impact customers’ lives and needs and how marketers respond to their needs. Are these trends and developments likely to affect your charge? How?
4. The Economic Situation looks at the stability and growth of the market in which the firm operates—for example, country, region, state, or local area. This section may examine inflation, employment, and income levels; taxes; and consumer confidence as they impact the company and the charge of the marketing plan. Are these trends and developments likely to affect your charge? How?
5. Political Trends, Legal Trends, and Regulatory Forces: This section examines how governmental regulations may affect the company and its charge. It also looks at the company’s relationships with elected officials. Is the current administration, Congress, state legislature, county or city government likely to sponsor laws or regulatory changes that will affect the company and the charge, either favorably or negatively? Do recent court decisions have an impact on the operating environment? Do they impact how you will have to carry out your charge?
6. Cultural Trends may have a profound impact on how customers respond to the company’s offering. Examples of lifestyle trends include less leisure time; cocooning; focus on health, exercise, and nutrition; and less concern with cleanliness. Demographic trends include aging baby boomers, new boomers (Generation Y), a rise in single-person and single-parent households, more women who work, and increasing population diversity. Some changes in cultural values include less conspicuous consumption, value orientation (quality/price), environmental concern, less tolerance of public smoking, more tolerance of varying lifestyles, and giving back to the community. Are these trends and developments likely to affect your charge? How?
B. Customer Environment Analysis
This section should examine the current situation in respect to the needs of the target market, expected changes in those needs, and how the firm presently meets those needs. Make sure you answer all of the following questions. Keep in mind that this section focuses on the current target market of the company, not the market you propose to target with this marketing plan. At this point, you are still examining the status quo, which should aid your decision making in the remainder of the marketing plan. For example, if the company in question is Apple, and the charge is to promote the iPad 4, the focus in this section of the marketing plan would be on the existing target markets served by Apple and what can be learned from those targets. Consider the following issues for your analysis:
1. Who? Who are current and potential customers of the same customer group? What are the demographics, psychographics, and geographics? Is the buyer the user? Who influences the purchasing decision?
2. How many? How many customers does the company serve? How many does it have the capacity to serve?
3. Where? Where are products purchased? Where do customers buy the products? What are the types of intermediaries? What is the influence of electronic commerce? Where are customers doing non-store buying—Home Shopping Network, catalogs, Internet?
4. When? When are the products bought? What is the frequency of purchasing? Do promotional events affect purchase? How do differences in physical or social environment, time demands, or purchase task affect buying?
5. How and What? What are the basic need-satisfying benefits? Does a competitor’s product fit a need this product/service does not provide? What are changes in customers’ needs? How do the customers pay—cash, credit?
6. Why Are There Non-Customers? Needs not met? Bad fit for lifestyle/image? Price? High switching costs? Competition’s product is better? Poor distribution? They do not know about the product?
C. Internal Environment Analysis
This section should identify/describe relevant internal aspects of the company that will help identify strengths and weaknesses in your SWOT analysis in the Module 2 SLP. This requires the identification and analysis of the organization’s past financial performance (sales, market share, profitability, etc.); marketing strategies (target market and positioning/image); marketing goals, objectives, and past performance; and marketing programs (advertising/promotion effectiveness, product/service offers, distribution effectiveness and channel programs, pricing, sales force effectiveness, sales strategy and programs, public relations/publicity, marketing research/intelligence gathering efforts, etc.). Additionally, the report may need to examine items such as production capacity, technical capabilities, management/leadership, organizational structure and culture, level of available resources and skills, financial stability, the product life cycle (i.e., is the product in introduction, growth, maturity, or decline stage?), and other relevant characteristics of the company that help develop a complete list of strengths and weaknesses in your SWOT analysis. It is important to focus on how the company is perceived by the market and its own customers as the main determinant of market-relevant strengths.
You are required to create a table to show the company’s financial performance such as its sales revenues, the profits, profit margin, market share, stock price, market cap, return on assets, operating cash flow, and so on. Also generate a histogram or a chart to show these financial numbers. Your written analysis in this subsection should be consistent with the table and histogram/chart.
SLP Assignment Expectations
Use the following outline to organize your paper. Note that the letters “a, b, c…” and the numbers “i, ii, iii, iv…” and “1, 2, 3, 4…” below are used to show the major issues you need to include in your paper, but should not be used to format your paper.
1. Product Statement (2 pages maximum)
1. Describe the company/organization.
2. Provide brief background of the organization.
3. Describe the business problem and charge you have for this marketing plan.
4. Provide a brief overview of what issue you are studying, and how a marketing perspective can help address the issue.
2. Situation Analysis (3-6 pages)
Note: Only include sections that are relevant to your charge. The relevance of each section of analysis should be clear to the reader.
1. External Environment Analysis
1. Context Analysis
 Industry forces that might impact success of any actions taken
2. Competitor Analysis
 Any organization or message that may prevent any actions taken from being successful
3. Technological and Economical Situation Analysis
4. Political, Legal, and Cultural Analysis
2. Customer Environment Analysis
1. Customer Analysis
2. Collaborator Analysis
3. Internal Environment Analysis
1. Company Analysis (include the table and histogram/chart in the appendix)

 

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