II. Situation Analysis and SWOT

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II. Situation Analysis and SWOT
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Housekeeping

• First assignment (Due date 9/19)
• First email from team leader (Due date 9/17)
• If you dont have a team or your team has less
  than 4 members. Please contact me ASAP.
• VERY IMPORTANT Read Chiffon case.
• Well work on it next Wednesday!

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Assignment 1 Know your product

• Electronic submission in WebCT
• Due September 19, 2007 500 PM
• This is an individual assignment but you can
  cooperate with your team.
• Requires an assignment format.
• Write a short report (1-2 double spaced pages) of
  
• A. Your shopping experience at Wal Mart. Describe
  briefly issues such as layout of store, parking,
  prices, products, service, ambiance.
• B. Describe a typical consumer of this company.
• C. Describe the companys competition.

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The situation analysis
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The purpose of the situation analysis

• Answers the why are we here?
• It provides a background on the factors that
  influence the companys functions and performance

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Elements of the situation analysis

• Problem identification
• Situation analysis
• Internal Strategic Resources
• Company
• Product
• Strategic Consumer Insight
• Consumer
• Market

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Elements of the situation analysis

• External Strategic Environment
• Industry
• Competition
• Trends
• Globalization
• Demographic change
• Technology
• Social/Political/Economic issues

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Problem identification

• A brief statement that summarizes the core
  dilemma and/or challenge a company must overcome

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Example Hyundai

• The attributes of the brand, good value, many
  features, excellent quality, great design are not
  conveyed by the brand to the consumer.

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Situation Analysis Internal Strategic Resources
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Company analysis

• What the company is concerned with
• What it represents
• Usually this information is found in the mission
  and vision of the corporation

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The mission of The Walt Disney Company is to be
one of the world's leading producers and
providers of entertainment and information. Using
our portfolio of brands to differentiate our
content, services and consumer products, we seek
to develop the most creative, innovative and
profitable entertainment experiences and related
products in the world.
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Company analysis (cont)

• Companys mission
• History
• Sales and profits
• Market standing/category share
• Product offerings
• Key personnel
• Capital resources
• Sources Hoovers, Factiva, Companys Web site,
  Annual Report.

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Product analysis

• Focuses on the abstract and concrete qualities of
  the companys product
• Product attributes/functions/Lifecycle
• Positioning/Brand personality
• Cost/Margins
• Price
• Packaging
• Distribution
• Promotions used
• Media spent
• Sources Ad Spender, Companys Web site, your
  research, check consumer sources.

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Situation Analysis Strategic Consumer Insight
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Consumer analysis

• Information that helps us gain a grasp on the
  (current/potential) consumer
• Major questions to be answered
• Who are they?
• What motivates them to buy?
• How do they use the product?
• What is important to them in a product?
• How do they look at life?
• Where are they?
• Sources Factiva (news articles), Mintel
  Euromonitor, MRI, Market Research.com (academic)

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A snapshot of a consumer Holiday Inn Express

• A frequent business traveler segment made up of
  nearly 40MM adults who travel for business 3
  nights per month (this segment skews male).
• This audience is often on the road more than they
  are at home, making them truly discerning
  travelers.
• Dissatisfied with the quality of hotel showers.
  Some have even taken to traveling with their own
  showerhead (seriously, we spoke to them).
• This audience clearly stated they will go so far
  as to base their stay decision on the quality of
  the bathroom/shower experience
• Source Effie 2006

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Market analysis

• Helps planners identify which geographic areas
  are key
• These areas are important due to
• The strong position the advertiser enjoys in the
  region
• The problems associated with doing business in
  the region

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Market analysis Development index

• Brand development index (BDI)
• Category development index (CDI)

of a brands total US sales in a market x 100
of total US population in a market
BDI
of a categorys total US sales in a market x
100 of total US population in a market
CDI
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Welcome to Circleland! (Pop 100)
Total soft drinks 1015205 50 Total
Coke 552.55 17.5
B Population 40 of soft drinks 15 of Coke
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A Population 10 of soft drinks 10 of Coke
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C Population 30 of soft drinks 20 of Coke
2.5
D Population 20 of soft drinks 5 of Coke
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Step 1
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Step 2
2.5/17.50.14
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Step 3
(0.14/0.30)100 47.62
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Step 4
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Situation Analysis External Strategic Resources
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Industry

• North American Product Classification System
• An industry is defined by
• Products
• Function Restaurant (Serve food)
• Technology Fast food/Fast casual
• Customers
• Segmented groups
• Geography

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Dells industrial sectors
Computer Industry
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Industry

• Growth
• Profitability
• Size of market
• Product differentiation
• Distribution channels
• Product life cycle
• Number of competitors
• Size of competitors
• Sources Standard Poors, Business Insight,
  Company sources.

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Product Life Cycle
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Strategic ramifications of PLC
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Competitive analysis

• Considers all options consumers might think about
  in their purchasing decision

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Competition

• Alternatives on a persons mind when selecting a
  good to satisfy a need

Direct competitors
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Competitive analysis

• In what category does the product compete?
• Who are the brands major direct competitors?
  Indirect competitors?
• What is the competitors brand position?
• What is the price of their product?

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Competitive analysis (cont)

• What is the respective market share?
• What is their communication strategy?
• How much do they spend on media?
• Where is competitive media spending concentrated?
• Sources Ad Spender, Corporate Web sites, your
  research, check company sources.

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Trends

• Globalization
• Free flow of trade, information
• Technology driven
• Effects
• Companies are looking for new international
  markets
• Higher risk
• Global, regional vs. local approaches
• Demographic change
• Birth rate, age, immigration, minorities, working
  population.
• Effects
• Market size
• Type of consumers

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Trends

• Technology
• Internet, digital media.
• Effects
• Fragmentation of markets
• New distribution channels
• Other trends
• Social
• Roles of females, minorities and pop culture,
  overburdened families.

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Trends

• Other trends
• Political
• Regulation
• Economic
• Inflation
• Exchange rate
• Economic activity
• Employment

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Looking for information
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A word (or two) about sources

• Primary vs. secondary sources
• Secondary sources
• Librarian Pat Reikes
• Best starting point
• Marketing Center from the Business Library
• http//web.uflib.ufl.edu/cm/business/subjects/mark
  etin.htm

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FAQs

• Can I Google all the way to obtain the
  information for the situation analysis?
• Most likely the answer will be no
• Can I use information from Wikipedia
• Hell, no.
• How can I access the UF databases from my home?
• Use a proxy server
• Where can I find information to calculate BDI/CDI
• Its almost impossible to obtain this data
  besides MRI Product Usage Data
• The publication that I was looking for is 5 years
  old. Can I still use it?
• Its better than no info. Just write a note when
  you present the data.

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The most important asset
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YOU
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Your responses

• No clear favorites except for Facebook, youtube,
  Harry Potter, Friends, food shows (Top Chef,
  Bizarre Foods), Entourage, Scrubs.
• Advertising Coke, ATT, Cingular, Apple, HP,
  Geico, Bud.
• Heroes Jesus, family members, sports stars,
  politicians.

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Here in this classroom we have people who

• Are cancer survivors
• Love to be outdoors (Wakeboard)
• Are training for a marathon
• Have worked with dolphins and whales
• Went to the 04 Olympics to see best friend
• Are pretty cool
• Have broken bones
• Are raveling overseas next semester
• Have a pet chinchilla
• Hate steak
• Run a PR internship
• Have a little sister

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Here in this classroom we have people who

• Dont know how to ride a bike
• Stuntride street bikes
• Have a very well organized closet
• Design clothing
• Work as a nanny
• Speak Polish, Chinese, French, Spanish, Monkey
• Are drama directors
• Like to cook
• Have four dogs
• Play the violin (and bass)
• Graduated salutatorian
• Like to play the bongos

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Here in this classroom we have people who

• Love traveling
• Are artists
• Most of their family live overseas
• Were a ballerina
• Knows how to dance swing/salsa
• Are obsessed with Disney
• Are very sentimental
• Do not like mayonnaise
• Competed in beauty pageants
• Are big dorks
• Are scared of cockroaches

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Dr. Villegas answers

• 1. Please name your favorite
• Movie Wings of Desire (Dir Wim Wenders)
• Television Program Sopranos
• Musician/Band Mogwai, Explosions in the Sky
• Book Fortress of Solitude (Jonathan Lethem)
• Web Site igoogle.com
• Magazine New Yorker
• Who is your favorite celebrity?
• Jim Cantore
• Who should play you in a movie
• about your life?

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• If you have a "hero," who is it?
• Heroes come and go, my family is my source of
  examples and counterexamples.
• 5. What is your favorite advertising campaign of
  all time?
• a. All time Bill Bernbachs work for VW Beetle
• b. Current Get a Mac (Chiat/Day)

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Think small.18 New York University students
have gotten into a sun-roof VW a tight fit. The
Volkswagen is sensibly sized for a family.
Mother, Father, and three growing kids suit it
nicely.In economy runs, the VW averages close to
50 miles per gallon. You won't do near that
after all, professional drivers have canny trade
secrets. (Want to know some? Write VW, Box 65,
Englewood, N. J.) Use regular gas and forget
about oil between changes.The VW is 4 feet
shorter than a conventional car (yet has as much
leg room up front). While other cars are doomed
to roam the crowded streets, you park in tiny
places.VW spare parts are inexpensive. A new
front fender (at an authorized VW dealer) is
21.75. A cylinder head, 19.95. The nice thing
is, they're seldom needed.A new Volkswagen sedan
is 1,565. Other than a radio and side view
mirror, that includes everything you'll really
need.In 1959 about 120,000 Americans thought
small and bought VWs. Think about it.
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• 6. What are two things about yourself that you
  think no one (or almost no one) in the room
  knows?
• a. I had my first and last beer in 1985.
• b. I cook dinner every night.

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Our client
Initial resources available _at_Web CT
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Teams

• Questions to ask prior to making a commitment
• What is your availability?
• What are your strengths?
• Writing
• Proofreading
• Looking for data
• Organization.
• Do you want to be a leader?

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So you want to be a team leader

• Responsibilities
• Coordinate team
• Make sure that projects are turned in on time
• Contact instructor
• Submit reports, projects, etc.
• Compensation
• 5 miserable extra credit points
• Learning to coordinate a project
• Know better the instructor ?

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Leader

• A leader is not
• A tyrant
• A maid
• Responsible for others stupidity
• The only loser that stays until 5 AM working on
  the project

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Goals for today

• Make a team with 4-5 members
• Get contact information
• Choose a leader (if possible)
• Plan for an initial meeting
• Divvy up the sections of situation analysis among
  team members (NOT SWOT)
• Agree on internal deadlines, format, reference
  style.

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Final Project

• Formation, leaders and name of ad agency 09/17
• Team leader should send email with the following
  infoto Dr. Villegas
• Names and email addresses of members
• Name of ad agency
• Please CC all members of the team
• First stage
• Name of ad agency 9/17
• 1st draft of situation analysis and SWOT 10/8
• Final draft 10/19
• 1st INDIVIDUAL Call Report 10/19

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SWOT analysis

• Advertising Strategy

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What is a SWOT?

• It is the organization of the information
  obtained in the situation analysis
• The companys
• Strengths
• Weaknesses
• The environments
• Opportunities
• Threats
• Answers the so what? Of the situation analysis

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Whats all about?
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The purpose of a SWOT analysis

• To define the main issues that must be addressed
  in the strategic plan
• Clarifies opportunities
• Identifies problems
• Issues discovered in the SWOT will be used to
  define IMC objectives, strategies and tactics

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Strengths and weakness

• Internal factors reflect situation-based
  considerations within a companys control
• Key question
• How and why are we better/worse than our
  competitors?

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Strengths

• Strengths refer to what a company has done well
  or been successful at to date.
• Abercrombie Fitch Strong brand portfolio

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Weaknesses

• Weaknesses refer to what a company needs to
  correct or that has worked to a companys
  disadvantage to date.
• Abercrombie Fitch Limited geographic reach

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Opportunities and threats

• External factors reflect situation-based
  considerations beyond a companys control
• However, they have the potential to affect the
  future of the business
• Key question
• What variables in the external environment
  affect the companys challenges?

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Opportunities

• Opp. refer to external factors that may benefit
  the company if pursued.
• Increase on online sales of clothing

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Threats

• Threats refer to external variables that may
  negatively affect the company if ignored
• Examples
• Oil prices are high Gas prices increase

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From Datamonitors SWOT Analysis (Apple)

• Apple has strong media content
• ___ S ___ W ___ O ___T?
• MP3 player market is growing
• ___ S ___ W ___ O ___T?
• Dependency for key components
• ___ S ___ W ___ O ___T?

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From Datamonitors SWOT Analysis (Apple)

• WiMax will be available in 1-2 years
• ___ S ___ W ___ O ___T?
• Growing health consciousness is resulting in
  higher demand for healthy food.
• ___ S ___ W ___ O ___T?
• Strong competition in every category
• ___ S ___ W ___ O ___T?

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Where do we go from here?

• Strategic planners should understand what the
  companys alternatives are for solving the market
  challenge