Page 42 - DMGT408DMGT203_Marketing Management

Unit 2: Understanding the Marketplace and Consumers

2. Market growth rate: The driving forces behind sales, and forecasting of growth rate. Notes
3. Market profitability: The intensity of competition depends on five factors: existing
competitors, supplier power, customer power, substitute products and potential entrants.

4. Cost structure: To analyse the value added by the production stage and observe how it is
changing and also the effect of learning curve.
5. Distribution system

6. Trends and developments
7. Key success factors: What skills and competencies are needed to compete now and in the
future

8. The competitive nature of the market: The nature of competition among existing firms, if
there is any potential threat from new entrants or the availability of substitute products,
how powerful the customer and supplier groups are.

2.2.5 Company Analysis

The organisation’s performance in the marketplace is significantly influenced by the following
three factors:
1. The organisation’s current market position, how well it has positioned itself.

2. The nature of environmental opportunities and threats.
3. The organisation’s resource capability to capitalize on the opportunities and its ability to
guard itself against threats.

Figure 2.4: SWOT Analysis

Potential Resources Strengths and Potential Resources Weaknesses and
Competitive Capabilities Competitive Deficiencies

See Box 2.1 See Box 2.2

Potential External Threats to Company's
Potential Company Opportunities
Well-being
See Box 2.3 See Box 2.4

Faced with a constantly changing environment, each business unit needs to develop a marketing
information system to track trends and developments, which can be categorised as either
opportunities or threats. The company has to review its strength and weakness against the
backdrop of environmental opportunities and threats, i.e., to perform a SWOT analysis for the
organisation.
SWOT Analysis (Strengths, Weaknesses, Opportunities, Threats)—What to look for in sizing up
a company’s strengths, weaknesses, opportunities, and threats, is depicted in the following
boxes.

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