The Individual Entrepreneur Chapter Three(3) Chapter Three(3)
Chapter 3
Transcript of Chapter 3
External and Customer Analysis PPT 3-1
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Copyright © 2005 John Wiley & Sons, Inc. All rights reserved. Reproduction or translation of this work beyond that permitted in Section 117 of the 1976 United States Copyright Act without the express written permission of the copyright owner is unlawful. Requests for further information should be addressed to the Permissions Department, John Wiley & Sons, Inc. The purchaser may make back-up copies for his/her own use only and not for distribution or resale. The Publisher assumes no responsibility for errors, omissions, or damages, caused by the use of these programs or from the use of the information contained herein.
Part Two
Strategic Analysis
External and Customer Analysis PPT 3-2
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External and Customer Analysis
Chapter Three
External and Customer Analysis PPT 3-3
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“To be prepared is half the victory.”
- Miguel Cervantes
External and Customer Analysis PPT 3-4
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The Role of External Analysis
External
Analysis
External
Analysis
Strategic Decisions• Where to compete
• How to compete
Strategic Decisions• Where to compete
• How to compete
Analysis• Information-need areas
• Scenario analysis
Analysis• Information-need areas
• Scenario analysis
Identification• Trends/future events
• Threats/opportunities
• Strategic uncertainties
Identification• Trends/future events
• Threats/opportunities
• Strategic uncertainties
Figure 3.1
External and Customer Analysis PPT 3-5
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External Analysis
• Should be Directed and Purposeful• Should NOT be an End In Itself• Should be Motivated by a Desire to Affect
Strategy, Generate, Evaluate and Select Strategic Options
• Should Contribute to the Investment Decision• Is an Exercise in Creative Thinking from the
Perspectives of Customer, Competitor, Market and Environment
• Often Needs to be Continuous
External and Customer Analysis PPT 3-6
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Investment Decision
• Should existing business area be liquidated, milked, maintain, or a target for investment?
• What growth directions should receive investment?
• Should there be market penetration, product expansion, or market expansion?
• Should new business areas be entered?
External and Customer Analysis PPT 3-7
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Strategic Options
• What are the value propositions?• What are the key success factors (KSF)?• What assets and competencies should be
created, enhanced or maintained?• What strategies and programs should be
implemented in functional areas?• What should be the positioning strategy,
segmentation strategy, distribution strategy, brand-building strategy, etc.
External and Customer Analysis PPT 3-8
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Strategic Uncertainties
• Focus on specific unknown elements that will affect the outcome of strategic decisions.
• Most strategic decisions will be driven by a set of these strategic uncertainties.
• “On what does that depend?” will usually generate additional strategic uncertainties.
External and Customer Analysis PPT 3-9
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Strategic Uncertainties
What will thefuture demand?
What will thefuture demand?
• Performance improvements?
• Competitive technological developments?
• Financial capacity of health care industry?
• Performance improvements?
• Competitive technological developments?
• Financial capacity of health care industry?
External and Customer Analysis PPT 3-10
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Strategic Uncertaintiesvs. Strategic Decisions
Strategic Uncertainties• Will a major firm enter?• Will a tofu-based dessert
product be accepted?• Will a technology be
replaced?• Will the dollar strengthen
against an off-shore currency?
• Will computer-based operations be feasible with current technology?
• How sensitive is the market to price?
Strategic Decisions• Investment in a product market• Investment in a tofu-based product
• Investment in a technology
• Commitment to off-shore manufacturing
• Investment in a new system
• A strategy of maintaining price parity
External and Customer Analysis PPT 3-11
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Customer Analysis
Segmentation
• Who are the biggest customers? The most profitable? The most attractive potential customers? Do the customers fall into any logical groups based on needs, motivations, or characteristics?
• How could the market be segmented into groups that would require a unique business strategy?
Figure 3.2
External and Customer Analysis PPT 3-12
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Judging a Segmentation Strategy
1. Can a competitive offering be developed and implemented that will be appealing to the target segment?
2. Can the appeal of the offering and the subsequent relationship with the target segment be maintained over time despite competitive responses?
3. Is the resulting business from the target segment worthwhile, given the investment required to develop and market an offering tailored to it?
External and Customer Analysis PPT 3-13
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How Should Segments be Defined?
Customer Characteristics• Geographic• Type of organization• Size of firm• Lifestyle• Sex• Age• Occupation
Figure 3.3
External and Customer Analysis PPT 3-14
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How Should Segments be Defined?
Product-Related Approaches• User type• Usage• Benefits sought• Price sensitivity• Competitor• Application• Brand loyalty
Figure 3.3
External and Customer Analysis PPT 3-15
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The Loyalty Matrix: Priorities
LowLoyaltyLow
Loyalty
ModerateLoyalty Moderate
Loyalty
LoyalLoyal
CustomerCustomer
Non-customerNon-customer
Medium
Lowto
Medium
High
Highest
Zero
High
Figure 3.4
External and Customer Analysis PPT 3-16
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Customer Analysis
Customer Motivations
• What elements of the product/service do customers value most?
• What are the customers’ objectives? What are they really buying?
• How do segments differ in their motivation priorities?
• What changes are occurring in customer motivation? In customer priorities?
• Are there any “Hot Buttons” whose salience and impact on the market are significant and growing?
Figure 3.2
External and Customer Analysis PPT 3-17
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Customer Motivation Analysis
IdentifyMotivations
IdentifyMotivations
Group andStructure
Motivations
Group andStructure
MotivationsAssess
MotivationImportance
Assess MotivationImportance
Assign StrategicRoles to Motivations
Assign StrategicRoles to Motivations
Figure 3.6
External and Customer Analysis PPT 3-18
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The Customer as Active Partner
• Encourage Active Dialogue
• Mobilize Customer Communities
• Manage Customer Diversity
• Co-creating Personalized Experiences
External and Customer Analysis PPT 3-19
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Customer Analysis
Unmet Needs
• Why are some customers dissatisfied? Why are some changing brands or suppliers?
• What are the severity and incidence of consumer problems?
• What are the unmet needs that customers can identify? Are there some of which consumers are unaware?
• Do these unmet needs represent leverage points for competitors?
Figure 3.2
External and Customer Analysis PPT 3-20
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Identifying Unmet Needs
• Conduct Market Research• Use The Ideal Experience• Use Creative Thinking
1. Separate ideation from evaluation.2. Approach the problem from different mental
and physical perspectives.3. Have a mechanism to take the most
promising ideas and improve them until they turn into potential winners worth trying.
External and Customer Analysis PPT 3-21
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Key Learnings
• External analysis should influence strategy by identifying opportunities, threats, trends, and strategic uncertainties. The ultimate goal is to improve strategic choices – decisions as to where and how to compete.
• Segmentation (identifying customer groups that can support different competitive strategies) can be based on a variety of customer characteristics, such as benefits sought, customer loyalty, and applications.
• Customer motivation analysis can provide insights into what assets and competencies are needed to compete, as well as indicate possible SCAs.
• Unmet needs that represent opportunities (or threats) can be identified by projecting technologies, by accessing lead users, and by systematic creative thinking.