Transcript Market Analysis - my study support

Learning Unit 3
• Discuss the steps that may be followed to analyse the industry
• Identify and discuss the elements of an industry analysis
• Identify and discuss the seven dimensions included in a market
analysis
• Understand the different portfolio models.
• Why do market analysis?
• Establish how attractive a market (segment) is to a company.
If you know – Make decisions on investment.
• Also need to understand the market DYMANICS.
• Identify key success factors
• Trends
• Opportunities
• Threads
• This can all help analyse the market…………………..More $$$
• Important because:
• Determines attractiveness of market
• Dynamics which helps determine the business future in the market
• Competitive structure of an industry
Porters Five Forces Model
• Dimensions of Market Analysis
Seven Dimensions………
• Portfolio Analysis
Market growth-market share matrix (BCG Matrix)
• Key success factors of industry
Market attractiveness-enterprise strength model
• Risk analysis - Risk matrix
• Porters Generic Strategy Model
• Market analysis builds on customer and competitor analysis.
• Help you to: Enter a new market, launch a new product or
service or to start a new business.
• Another aim of market analysis: Get a full understanding of
the dynamics of the market.
• To identify trends, threats, opportunities, changes, success
factors.
•
• NOW: 7 dimensions of market analysis …………………
•
•
•
•
•
•
•
Actual and potential market size
Market growth
Market profitability
Cost structures
Distribution systems
Trends and developments
Key success factors.
•
•
•
•
Actual size must be determined
Detailed analysis of customers that use industry products
Doing competitor analysis
Looking at published reports.. Government, financial statements,
market research reports.
• Ask yourself: What is industry size, what is industry potential
size.
• Look at lifecycle of industry, or of segments.
• Seek out markets that have high growth in which you can persue
your objectives.
• RISK……..Look at it carefully, make informed decisions.
• Risk is associated with high growth markets.
To many competitors in market
Competitor can enter with superior product at low cost
Success factors can change, you can adapt
Technology can change
Market doesn’t grow as expected
Your Business resources can keep up with growth
Not adequate distribution channels available
• Def: The expenses that a firm must take into account when
manufacturing a product or providing a service
Determine the cost components of each value-added activity
within the industry
• Also anticipate possible changes in industries cost structure.
•
•
•
•
•
•
•
•
Ask the following questions:
1. What are alternative distribution systems?
2. What are the trends?
3. What channels are growing, and what new ones have
emerged?
Who has the power in the channel?
Examples: Tupperware – direct channel / Avroy Shlaine
Ackermans / Pep – Own outlets.
Others types: E-commerce, convenience stores and petrol
stations, Category store like: Mr Price Home….
• Info we just did: distinguish trends and foresee future
developments.
• Identify: High growth and Low growth
• Lots of things can happen: New businesses open, old ones fail,
new competitors enter, some make it, some don’t……
• = TURBULENT
• Technology influence, competitive arena will change.
• Look at repositioning towards new growth…. New key success
factors of the industry?
Market Growth – market share matrix
BCG Matr
• Stars are units with a high market share in a fast-growing
industry.
• Generate enough cash to be self sustaining
• Strong compared to competition
• Need heavy investment to maintain growth
• Will slow down in growth and become Cash Cow
•
•
•
•
•
•
•
Low Growth
High Share
Mature businesses
High profit margins
Successful businesses
Little need for investment.
Can become stars……. But must generate strong cash flows
continually over time.
• PROBLEM CHILD
•
•
•
•
•
High growth / Grow quickly
Use high amounts of cash
Low Share
Requires a lot of cash to maintain in the market.
They have potential, require substantial investment to grow
market share.
•
•
•
•
•
•
•
Low growth
Low market share
Business are a cash trap
Business = Unattractive
Enough cash – Break even
Not worth investing in
Should be sold off!
• “These are characteristics or conditions in a particular industry that
have a significant impact on the performance of the organisation in
that industry.”
p. 58 Text book :
•
•
•
•
•
•
•
Image of the org among consumers
Product knowledge of the sales force
Marketing knowledge of the sales force
Advertising and sales promotion activities
Research and development activities
Service elements
Research and manufacturing process of product
•
•
•
•
•
•
•
•
•
•
Organisation size to exploit economies of scale
Customer financing
Physical distribution activities
Location
Technical skills of tech department
Quality control
Management of production activities
Effectiveness of purchase department
Labour relations
Technical sophistication of equipment
It’s about what makes you SUCCESSFUL in your industry
You need to FIT into the industry with the Key success factors = you
will not make it.
CLOSE FIT = help you make it!
• Risk assessment = identify process safety risks and determining
the most cost effective means to reduce risk.
• How ? Rank your risk = risk ranking
•
Look at the Risk Matrix p. 62 text book.
• Illustrates the relationship between risk of environmental factors
affecting a business area. = profits
• Always keep in mind:
•
•
•
•
•
Changing technology
New competitors
Unavailability of raw materials or spare parts
Changes in consumer demand / consumption patterns
Changes in legislation
• = THINGS IN THE EXTERNAL ENVIRONMENT
• Operating at a lover cost level than competitors
• Be in better position to be competitive
• Still offer value for money to customers.
• When use this?
• Increase your market share at low cost strategy
• Product or service that differs from the normal way of doing
business.
• Value of Uniqueness of the product
• It can be = service levels, technology….
• Differentiation allows you to charge a premium price
• Helps you cover the costs of the “uniqueness”.
• Very important part in your business.
• Concentrate on a focussed segment of market place to get
either a cost advantage or differentiation.
• If you focus correctly in your business you will have:
• = Customer Loyalty
• What do when you focus?
• Restrict of activities to a section of the market by delivering
good or services at a lower cost to that segment. Thus =
differentiating.
• Entering a new market with a new product – Experian
• Please read through, understand.