Step 2: Analyze Market Position

situation analysis: market assessment

The Situation Analysis undertakes an assessment of your marketing strengths and capabilities. The analysis has eight components. You may review all eight or a combination of analytical components as it relates to your business.

First download and print this section of the Market Planning Model as a guide.

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analyze market position

Assess Your Marketing Experience

How would you define your current marketing experience? Are you a prospector, defender, analyzer or reactor?

This will determine how best to execute your marketing strategy. A prospector takes many risks, explores new marketing opportunities, and thinks out-of-the-box on new concepts and developments.

A reactor on the other hand assumes little risk. They will take action only when the market or competition forces their hand.

Your business experience may fall under any one of these modes. But if you are looking to grow your business, you may need to move up the marketing experience chain.

Review marketing model:
Section Cc

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analyze market position

Analyze Your Macro-Environments

The macro-environments that can impact your business include:

  • change in demographics: i.e., baby-boom market near retiring; millenials moving to digital
  • change in technology: i.e., e-technology, mobile technology, AI
  • changes in political structure or business regulations
  • changes in economics: i.e., interest rate drops; pending inflation
  • change in socioculture: i.e., environmental products; going green

You cannot control the macro-environments. You can only revise your business strategy to take advantage of macro-environmental changes.

Marketing managers will often perform a scenario analysis on macro-environmental changes. Their objective is to measure the probability that an event will occur that can impact their business plans.

Review marketing model:
Section Dd

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analyze market position

Analyze Your Competition

The competitive analysis includes both primary and secondary competitors:

  • the competitor growth and size
  • the competitor share of the market
  • the competitor strength and weakness
  • the competitor's possible behavior when you make market moves

Factors that can impact your competitive position include:

  • Barriers of market entry and exit:
    the stronger the barriers, the less likely that new entrants or existing competitors coming into or exiting the market.

    The weaker the barriers, the more likely you will face new players that can play havoc on your marketing position.

    A prime example are Internet plays. There are zero barriers to entry or exit. Internet leaders are constantly battling upstarts that challenge their online position.

  • The strength of your suppliers / buyers:
    what prevents your suppliers or buyers from moving forward or backward in the chain to compete in your market

    Could these players become a competitor?

  • industry rivalry:
    for example, the threat of a "Amazon" moving into your market may force a shift in your product strategy to stay competitive.

    Review marketing model:
    Section Ee

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analyze market position

Analyze The Value Chain Activities

This component applies to mid- to larger-size companies with complete integrated business infrastructures.

Briefly, mid- to large-size businesses operate in a value chain. Most notably:

  1. in-bound logistics
  2. operations
  3. out-bound logistics
  4. marketing and sales
  5. service

The objective is to strengthen your core competency within the value chain and out-source other value chain activities to gain competitive advantage.

Auto manufactures are a prime example. Almost all of their in-bound logistics are outsourced to auto part manufacturers using just-in-time operations and logistics. The auto manufactures focus their resouces on engineering and marketing.

Review marketing model:
Section Ff

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analyze market position

Access Your Internal Capabilities

This requires a SWOT analysis, meaning:

  • S=Strength: clearly define your company's strengths. It could be your product line, sales force, location, operation efficiency or other.

  • W=Weakness: in comparison, you need to outline your company weakness. This too may by your product line, sales force, location, operation efficiency or other.

  • O=Opportunities: list the opportunities that may be available under a strategic play. This could include a product line expansion, opening a new market, streamlining an operation for better efficiency, etc.

  • T=Threats: in comparison, you need to also list the potential threats. This may include price competition, new competition from a major player, etc.

    Review marketing model:
    Section Gg

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analyze market position

Appraise the Corporate Structure

Generally referred to as the 7-S Framework. A strong corporate structure allows you to implement a successful marketing plan. The determinants:

  1. Structure:
    single management
  2. System:
    budgeting, etc.
  3. Style:
    vision, etc.
  4. Staff:
    training, etc.
  5. Skills:
    new capabilities vs. old capabilities
  6. Shared Values:
  7. Strategy:
    Review marketing model:
    PDF: section Hh

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analyze market position

Segmentation Profitability

Are you making money? Most likely if you are still in business. But if you were to segment your markets or products in another way, would that segment be profitable?

Segmentation profitability allows you to analyze the following:

  • Where do you hold the competitive position?
  • Which segments are most profitable?
  • Which segments should be strengthen?
  • Which segments should be discontinued?

    Completing a segmentation profitability will pin-point areas that support a marketing decision and strategy.

    Review marketing model:
    Section Ii

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analyze market position

Life Cycle Analysis

There is a generic life cycle that all businesses follow:

  • Cycle 1: Introduction or Emerging Markets
    This is when a business first comes into the market. The market is fairly new and needs to be developed.

  • Cycle 2: Growth
    This is the period when the business begins experiencing rapid growth. The business will expand its operations, hire new people, and move into new markets and territories.

  • Cycle 3: Maturity
    This is when the business begins to mature. Competitors have entered the market to challenge the market leader. To stay competitive, the business tightens its operations, increases productivity, and sheds unprofitable operations.

  • Cycle 4: Decline
    This is when the business begins to decline due to competitive pressures or changes in the market.

There are different marketing strategies that work for different life-cycles. Understanding your business cycle will help define your marketing play.

Review marketing model:
Section Jj

Helpful Tools

Some helpful forms business owners:

exit planning module
selling your business summary sheet
valuation calculators