External Environment Analysis

In general, a business unit has to monitor key macroenvironment forces (demographic-economic, technological, political-legal, and social-cultural) and microenvironment actors (customers, competitors, distributors, and suppliers) that affect its ability to earn profits (see Chapter 4 for more detail). Then, for each trend or development, management needs to identify the associated marketing opportunities and threats.

A marketing opportunity is an area of buyer need in which a company can perform profitably. Opportunities can be classified according to their attractiveness and their success probability. The company's success probability depends on whether its busi-

Figure 1-7 The Business Strategic-Planning Process

Business mission

External environment (opportunity & threat) analysis

SWOT analysis

Internal environment (strengths/

Goal formulation

Strategy formulation

Program formulation

Implementation

Feedback and control

Goal formulation

Strategy formulation

Program formulation

Implementation

Feedback and control

A

/

\

/

\

/

\

ness strengths not only match the key success requirements for operating in the target market, but also exceed those of its competitors. Mere competence does not constitute a competitive advantage. The best-performing company will be the one that can generate the greatest customer value and sustain it over time.

An environmental threat is a challenge posed by an unfavorable external trend or development that would lead, in the absence of defensive marketing action, to deterioration in sales or profit. Threats should be classified according to seriousness and probability of occurrencee. Minor threats can be ignored; somewhat more serious threats must be carefully monitored; and major threats require the development of contingency plans that spell out changes the company can make if necessary.

Salehoo Secrets and Tips

Salehoo Secrets and Tips

As with any web site, SaleHoo has a number of features that will help you in buying products from around the world. Once you have an account on SaleHoo, which only costs a one-time fee, you can establish up to twenty named searches for products. After that, any time those items become available, you’ll be alerted.

Get My Free Ebook


Post a comment