Page 44 - DMGT408DMGT203_Marketing Management

Unit 2: Understanding the Marketplace and Consumers

Notes
Box 2.3: Potential Company Opportunities
Serving additional customer groups or expanding into new geographic markets or product segments.
Expanding the company’s product line to meet a broader range of customers needs.
Utilizing existing company skills or technological know-how to enter new product lines or new
businesses.
Using the internet and e-commerce technologies to dramatically cut costs and/or to pursue new sales
growth opportunities.
Integrating forward or backward.
Falling trade barriers in attractive foreign markets.
Openings to take market share away from rivals.
Ability to grow rapidly because of sharply rising demand in one or more market segments.
Acquisition of rival firms or companies with attractive technological expertise.
Alliances or joint ventures that expand the firms market coverage or boost its competitive capability.
Openings to exploit emerging new technologies.
Market openings to extend to company’s brand name or reputation to new geographic areas.

Box 2.4: Potential External Threats to Company's Well-being

Likely entry of potent new competitors.
Loss of sales to substitute products.
Mounting competition from new Internet start-up companies pursuing e-commerce strategies.
Increasing intensity of competition among industry rivals — may cause squeeze on profit margins.
Technological changes or product innovations that undermine demand for the firm’s product.
Slowdowns in market growth.
Adverse shifts in foreign exchange rates and trade policies of foreign governments.
Costly new regulatory requirements.
Growing bargaining power of customers or suppliers.
A shift in buyer needs and tastes away from the industry’s product.
Adverse demographic changes that threaten to curtail demand for the firm’s product.
Vulnerability to industry driving forces.
Dwindling sources of basic raw materials/suppliers.

It has been criticized that after conducting the SWOT, analysis, managers frequently fail to come
to terms with the strategic choices that the outcomes demand.

Example: A Brief SWOT analysis of Pepsi
Strengths: Branding, diversification and distribution
Weaknesses: Overdependence on US markets, Low productivity and product recalls
Opportunities: Broadening the product base, international expansion, and growing snacks and
bottles water market
Threats: Decline in carbonated drinks sales, impact of government regulations and competition
with Coca Cola

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