Portfolio Analysis and S.W.O.T Analysis

Tools for Strategic Marketing Planning

Strategic business units (SBUs) share three characteristics: Single business or collection of

businesses which can be managed separately

Has own set of competitors Has manager responsible for strategic

planning and profits

Strategic Business Units

The BCG MatrixThe Boston Consulting Group’s Growth-Share Matrix

Market-Attractiveness Portfolio Strategies

SWOT Analysis

“A widely used framework for organizing and utilizing the pieces of data and information gained from the situation analysis…”

Encompasses both internal and external environments

One of the most effective tools in the analysis of environmental data and information

Directives for a ProductiveSWOT Analysis

Separate Internal Issues from External Issues

Failure to understand the difference between internal and external issues is one of the major reasons for a poorly conducted SWOT analysis.

Socratic Advice: “Know thyself” “Know thy customer” “Know thy competitors” “Know thy environment”

The Elements of a SWOT Analysis

Strengths and Weaknesses (Internal) Scale and Cost Economies Size and Financial Resources Intellectual, Legal, and Reputational

Resources Opportunities and Threats (External)

Trends in the Competitive Environment Trends in the Technological Environment Trends in the Sociocultural Environment

SWOT Matrix: A four-cell array used to categorize information at the

conclusion of a SWOT analysis. Should be based on customer perceptions, not the

perceptions of the analyst. Elements with the highest total ratings should have

the greatest influence in marketing strategy. Focus on competitive advantages by matching

strengths with opportunities.

Analysis of the SWOT Matrix

The SWOT Matrix

SWOT-Driven Strategic Planning Four issues the marketing manager must

recognize: The assessment of strengths and weakness should look beyond

products and resources to examine processes that meet customer needs. Offer solutions to customer problems instead of specific products.

Achieving goals and objectives depends on transformingstrengths into capabilities by matching them with opportunities.

Weaknesses can be converted into strengths with strategicinvestment. Threats can be converted into opportunities withthe right resources.

Weaknesses that cannot be converted become limitations which must be minimized if obvious or meaningful to customers.

Effectiveness of Analysis Tools

Directives for a ProductiveSWOT Analysis

Stay Focused It is a mistake to complete one

generic SWOT analysis for the entire organization or business unit.

When we say SWOT analysis, we mean SWOT analyses.

Directives for a ProductiveSWOT Analysis

Search Extensively for Competitors Information on competitors is an

important aspect of a SWOT analysis. Look for all four types of competition:

Brand competitors Product competitors Generic competitors Total budget competitors

Directives for a ProductiveSWOT Analysis

Collaborate with other Functional Areas Information generated from the SWOT analysis can

be shared across functional areas. SWOT analysis can generate communication

between managers that ordinarily would not communicate. Creates and environment for creativity and innovation.

Examine Issues from the Customers’ Perspective Look for Causes, Not Characteristics Separate Internal Issues from External Issues

Directives for a ProductiveSWOT Analysis

Examine Issues from the Customers’ Perspective What do customers (and non-customers) believe about

us as a company? What do customers (and non-customers) think of our

product quality, customer service, price, overall value, convenience, and promotional messages in comparison to our competitors?

What is the relative importance of these issues as customers see them?

Taking the customers’ perspective is the cornerstone of a well done SWOT analysis.

Directives for a ProductiveSWOT Analysis

Look for Causes, Not Characteristics Causes for each issue in a SWOT

analysis can often be found in the firm’s and competitors’ resources.

Major types of resources: Financial, intellectual, human,

organizational, informational, legal, relational, reputational, etc

Quantitative Assessment ofElements Within the SWOT Matrix