This presentation is done by management students from Manav Rachna International University.

1. Presented By Pinak Paul, Tanuja Mallick, Jyoti
Dudeja, Ayushi Singla
Presented to : Professor Sarin

2. Situational Analysis
 Situational Analysis : Array of methodologies for
analyzing internal and external environment of a
business. It helps in :
 Understanding target market
 Formulating marketing strategies
 Industry analysis
 Firms capabilities
 Proactive decision making

3. Methods for Analysis :
 5Cs analysis:
 Company Analysis
 Competitors
 Customers
 Collaborators
 Climate
 Porter five forces analysis :
 Threat of new entrants
 Threat of substitutes
 Bargaining power of customers
 Bargaining power of suppliers
 Competitive rivalry within industries

5. 5C’s of Strategic Management
COMPANY CUSTOMER
FIVE C’S
CLIMATE COMPETITORS
COLLABORATORS

6. COMPANY :-
 What are the products/ services provided by the
company?
 What is the image of the company in market?
 Does your company have the right technical expertise?
 Determine the strength, weakness, opportunities,
threats of your business…

7. CUSTOMER :-
 Are they consumers or businesses?
 What are their needs?
 Will they switch to the competition, if the
company increases its price?
 What are their preferences for company's product
quality, reliability and performance?
 what will they be buying over the next two years?
 what will the next generation of customers need
from the company?

8. COMPETITORS:-
Check who competes with your company in meeting
the customer’s needs.
 How much market share do they hold?
 What are their products exactly?
 What are their strengths and weaknesses?
 What are their strategic advantages?

9. COLLABORATORS:-
Determine if there is any outside source that can help
the company such as :
 distributors
 suppliers
 alliances

10. CLIMATE:-
 Some forces are difficult to predict.
 Determine if there are any limitations due to
 Political issues :-
legal problems, trade regulations, taxation etc
 Economic concerns :-
growth rate, labor costs, and business cycle stage etc
 Social impacts :-
demographics, education, and culture etc
This is also known as “PEST” analysis.

12. Porter Five Forces Analysis
 The Porter models involves scanning the environment
for threats from competitors and identifying problems
early on in order to minimize threats imposed by
competitors.
 This model can apply for any type of business, from
small to larger sized businesses.

13. History
 Porter five forces analysis is a framework for industry
analysis and business strategy development formed
by Michael E. Porter of Harvard Business School in
1979.
 It draws upon industrial organization (IO)
economics to derive five forces that determine the
competitive intensity and therefore attractiveness of
a market. Attractiveness in this context refers to the
overall industry profitability.

14. Purpose
 The purpose of the Porter's five forces model is to help
businesses compare and analyze their profitability and
position with the industry against indirect and direct
competition.

15. Porter Five Forces
 The threat of new entrant
 Bargaining power of buyers
 Threat of substitute product of services
 Bargaining powers of suppliers
 Rival among existing competitors

17. Threat of New Entrants
 The existence of barriers to entry (patents, rights, etc.)
The most attractive segment is one in which entry
barriers are high and exit barriers are low. Few new
firms can enter and non-performing firms can exit
easily.
 Economies of product differences
 Brand equity

18.  Switching costs or sunk costs
 Capital requirements
 Access to distribution
 Customer loyalty to established brands
 Absolute cost
 Industry profitability

19. Bargaining Power of Buyers
 The bargaining power of customers is also described as the
market of outputs: the ability of customers to put
the firm under pressure, which also affects the customer's
sensitivity to price changes.
 Buyer concentration to firm concentration ratio
 Degree of dependency upon existing channels of
distribution
 Bargaining leverage, particularly in industries with
high fixed costs

20.  Buyer switching costs relative to firm switching costs
 Buyer information availability
 Availability of existing substitute products
 Buyer price sensitivity
 Differential advantage (uniqueness) of industry
products

21. Threat of Substitutes products or
Services
 Buyer propensity to substitute
 Relative price performance of substitute
 Buyer switching costs
 Perceived level of product differentiation

22.  Number of substitute products available in the
market
 Ease of substitution. Information-based products are
more prone to substitution, as online product can
easily replace material product.
 Substandard product
 Quality depreciation

23. Bargaining Power of Suppliers
 The bargaining power of suppliers is also described
as the market of inputs.
 Suppliers of raw materials, components, labour, and
services (such as expertise) to the firm can be a
source of power over the firm, when there are few
substitutes.

24.  Suppliers may refuse to work with the firm, or, e.g.,
charge excessively high prices for unique resources.
 Supplier switching costs relative to firm switching
costs
 Degree of differentiation of inputs

25.  Impact of inputs on cost or differentiation
 Presence of substitute inputs
 Strength of distribution channel
 Supplier concentration to firm concentration ratio

26.  Employee solidarity (e.g. labour unions)
 Supplier competition - ability to forward vertically
integrate and cut out the BUYER
 Ex.: If you are making biscuits and there is only one
person who sells flour, you have no alternative but to
buy it from him.

27. Intensity of Competitive Rivalry
 For most industries, the intensity of competitive
rivalry is the major determinant of the competitiveness
of the industry.
 Sustainable competitive advantage through innovation
 Competition between online and offline companies

28.  Level of advertising expense
 Powerful competitive strategy
 Flexibility through customization, volume and variety

29. COMPETITIVE ANALYSIS OF TATA
NANO USING PORTER FIVE
FORCES ANALYSIS

35. The Art, Science and craft of decision making

36. Business Strategy

37. Corporate Culture

38. Corporate Culture
 The beliefs and values shared by people who work in
an organization
 how people behave with each other
 how people behave with customers/ clients
 how people view their relationship with stakeholders

39.  people’s responses to energy use, community
 involvement, absence, work, ethic , etc
 how the organization behaves to its employees –
training, professional development etc

40. Corporate Culture
 May be reflected in :-
 attitude and behaviour of the leadership
 attitude to the role of individuals in the workplace –
open plan offices , team based working etc
 logo of the organization
 the image it presents to the outside world

41. Nike
 What corporate culture do
you think the following
businesses have managed to
develop ?

42. Strategic Planning

43. Strategic Planning
- First stage of strategic
planning may involve:
future thinking :
 thinking about what
the business might need
to do 10-20 yrs ahead.
Strategic intent :
Taking time to think &
 thinking about key
strategic themes that reflect may be more
will inform decision important than many
making. businesses allow time
for…..!!!

44. Strategic Planning
 The vision :
 communicating to all staff where the organization is
going and where it intends to be in future
 allows the firm to set goals
 Aims and objectives :
 Aim– long term target
 Objectives – the way in which you are going to
achieve the aim.

45. Analysis

46. SWOT
 Strengths - identifying existing organisational
strengths
 Weaknesses – identifying existing organisational
weaknesses
 Opportunities – what market opportunities might
there be for the organisation to exploit.
 Threats – where might the threats to the future comes
from ?

47. PEST
 POLITICAL :- local ,national and international
political developments – how will they affect the
organisation and in what ways.
 ECONOMICAL :- what are the main economic issues –
both nationally and internationally that might affect
the organisation ?

48.  SOCIAL:- what are the developing social trends that
may impact on how the organization operates and
what will they mean for future planning?
 TECHONOGICAL:- changing technology can impact
on competitive advantage very quickly !!!

49. Evaluation

50. Evaluation
 Data from sales, profit etc
used to evaluate the
progress & success of the
strategy and to inform of
changes to strategy.
 Information from a
wide variety of
sources can help
to measure & inform the
impact & direction
of strategy…

52. Boston Consulting Group Matrix
 BCG matrix was created by Bruce Henderson for the
Boston Consulting Group in 1970. How’s it helpful ?
 Helps corporations analyzing their product lines or
business units.
 Optimum allocation of resources

53.  Serves as an analytical tool for :
 Brand marketing
 Product management
 Strategic management
 Portfolio analysis

54. BCG Matrix revolves around two topics :
•Market growth
•Market Share

55. Market Share
 Market share signifies the percentage of total market
being serviced by a company.
 Relative Market Share (RMS) :
 Business unit sales this year
Leading rival sales this year
 RMS indicates cash generation, higher the share more
cash generation.

56.  Brands share 20 %, competitors share 40 %, ratio of
share 1 : 2
 RMS signifies :
 Profit
 Brand positioning (relative)
 Future direction
 Expected effective marketing strategies
 Cost advantage ( lead on experience curve)

58. Market Growth Rate
 Market growth rate is used as an indicative measure of
a market’s attractiveness.
 MGR :
 Individual sales this year – individual sales last year
Individual sales last year
 Growing market requires huge investment for
increased activity : cash consumption.

59.  Market growth signifies :
 Expansion
 Opportunity
 Brand position than just cash flow
 Future potential : market maturity
 Growth analysis
 Market strength

61. BCG Growth – Share Matrix
 It is a portfolio planning model which classifies
company’s business units into four categories :
 Stars
 Question marks
 Cash cows
 Dogs
 It is primarily based on the combinations of market
share and market growth relative to the next best
competitor.

63. STARS
High growth rate, High market share
 Stars are leaders in business
 Require heavy investment to remain in large
marketshare
 Leads to large amount of cash consumption and cash
generation
 Attempts should be made to hold the marketshare
otherwise the Star will become the next cash flow

64. CASH COWS
Low growth, high market share
 They are foundation of the company and often the
stars of yesterday
 They generate more cash than required
 They extract the profits by investing as little as
possible
 They are located in an industry that is mature, not
growing or declining.

65. DOGS
low growth, low market share
 Dogs are the cash traps
 Dogs lack potential to bring in much cash
 Number of dogs in an enterprise should be minimized
 Business is situated at a declining stage

66. Question Mark
High growth, low market share
 Most businesses start of as question marks
 They will absorb great amount of cash if the market
share remains unchanged
 Questions marks have the potential to become star
and eventually cash cow but can also become a dog
 Investment should be high for question marks

68. Example : Apple Inc.(2011)
 Apple is renowned worldwide for its product
innovation and investment in R & D.
 Products include I phone, I pod, I tune music store,
Mac OS X, Mac mini, Mac software, Apple Macs,5th
generation I pod, etc.

69. Figures for FY ending Dec 2011
Apple products Growth rate(%) Market share(%)
I phone 48 28
I pod (star) 28 60
Apple I tunes 7.6 82
Mac OS X 31.7 0.09
Mac Software 32 0.01
Apple Macs -- --

71. Limitations
 BCG Matrix uses only two dimensions and overlooks
many other factors.
 The framework assumes that each business unit is
independent of the others.
 The matrix depends heavily upon the breadth of the
definition of the market.

72.  Problems of getting data on market share and market
growth.
 High market share does not mean profits all the time.
Business with low market share can be profitable too