Make Performance Improvement Strategic

 Have you ever wondered if your performance improvement interventions are aligned with corporate strategy?

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Strategic Marketing: Environmental Analysis

 

Alexey Cherkasov

Following Mission and Goals as a Part of Strategic Marketing today I’m gonna describe the next step of the strategic marketing – the environmental analysis.

When you analyze the external environment of the company, you have to consider the current state and development prospects of the most important factors and environmental objects for the organization.

Among them it is worth to mention the following:

• Industries
• Markets
• Suppliers
• Competitors
• Political environment

Analysis of the external environment is aimed at identifying changes, trends, opportunities and threats. One of the most common and successful tools for external analysis is PEST analysis.

PEST analysis (sometimes referred to as STEP) is a marketing tool designed to identify the political (P), economic (E), social (S) and technological (T) aspects of the external environment that affect the company’s business. The political aspects must be studied in consequence of the fact that it regulates the authorities that determine the organization’s environment, including obtaining key resources for its functioning.

PESTAnalysis

You need to study the economic aspects due to the fact that it is responsible for the allocation of resources at the state level. The social aspect is considered in terms of determining consumer preferences. The technological aspect is studied in order to identify trends in technology and their development.

There is another type of PEST analysis, the so-called PESTLE analysis. PESTLE analysis is an enhanced with two factors (Legal and Environmental) version of PEST analysis. Sometimes other formats are used, for example, SLEPT analysis (plus the legal factor) or STEEPLE analysis: socio-demographic, technological, economic, environmental, political, legal, and ethnic factors. The geographical factor may also be taken into account.

The results of the PEST analysis should be presented in the form of a matrix. There you assign certain weight to each of the factors. They allow to assess the external economic situation.

Another valuable tool in analyzing the external environment of the company is the methodology developed by the American economist, Professor of Business Administration at Harvard Business School, Michael Porter. This technique was developed and described in 1979.

The model of the five forces applies to all industries, since it covers relationships that are fundamental to any commercial activity: between buyers and sellers; sellers and suppliers; competing sellers; supply and demand.

The methodology identifies five forces that determine the level of competition, and, consequently, the attractiveness of doing business in a particular industry. Porter’s five forces include:

• Threat of substitute products
• Threat of new entrants
• Bargaining power of suppliers
• Bargaining power of buyers
• Rivalry among existing competitors

Let us examine each of the five forces separately.

Threat of substitute products

Based on the model of M. Porter, substitute products have an impact on the competitive situation in the industry. There are companies whose activities are carried out in other industries that produce completely different products. And the consumer can consider them as a replacement for the company’s products.

In this case we are talking about competitive pressure. It influences pricing. Provided that the substitute products are cheaper and consumers agree to use them. Then there is a need to reduce prices, which puts the company in a rather unpleasant situation.

Porter Five Forces

Thus, the following key factors can be identified:

• consumer propensity to purchase substitute products
• comparison of the price and quality of products-substitutes
• cost of switching to a substitute product for the consumer

Threat of new entrants

According to the model of M. Porter, the pressure from the new competitors that enter the same market depends on the existing barriers, as well as on the actions of the players in this market.

There are the following entry barriers to new markets:

• entry barriers (licenses, patents, copyrights, etc.)
• need for product differentiation costs
• brand value
• switching costs or non-refundable (recessed) costs
• starting costs for new players
• access to distribution
• cost advantage
• advantages in position on the knowledge acquisition curve
• expected response actions of old players
• reaction of the government and / or other market regulators

Every Market has its Barriers

Bargaining power of suppliers

The power of supplier companies primarily depends on the nature of the materials market, on the existing choice, as well as on the amount of costs in terminating cooperation. With a large selection of similar products, suppliers have minimal power in the market.

Suppliers are also limited in power when their consumer belongs to the unique industry. Thus, their existence depends on the success of companies in this market. In the case when suppliers offer unique products, and switching to an alternative is either impossible or associated with very high costs, suppliers have a very large market power.

In this case the suppliers have power over the consumers and set their prices. Key factors of power of suppliers:

• comparison of the cost of switching suppliers and the cost of switching companies
• degree of differentiation of raw materials
• availability of supplier substitutes
• comparison of supplier concentration and company concentration
• comparison of the cost of raw materials and the selling price of the company’s product

Bargaining power of buyers

Buyers are endowed with very large market power. In most cases they are well aware of the prices, characteristics, quality and other attributes of products. Buyers’ power is growing with the growth of substitute products on the market.

Key factors of bargaining power of buyers:

• buyer concentration to the level of company concentration
• degree of dependence on existing distribution channels
• number of buyers
• comparison of customer switching costs and company switching costs
• availability of information for buyers
• availability of existing substitute products
• price sensitivity of buyers
• product uniqueness

Rivalry among existing competitors

With the exception of monopolistic markets, competition exists in any of the industries. In some cases, struggle is weakly expressed, but sometimes the competition is intensified. Here are some cases:

• The presence of a large number of competitors or their approximate equality in terms of size and strength
• Slow growth of the industry, exacerbating the struggle for market share
• The product or service lacks differentiation or switching costs. Fixed costs are high or products are perishable, encouraging lower prices
• Significant growth in production capacity leading to overproduction and lower prices
• Exit barriers are high enough
• Competitors have different strategies and their “individuality.” They are constantly ahead of each other in the process of competition, adhere to various ideologies of competition.

The technique developed by Michael Porter has one key message: in order to lead the market and confront the competitive forces described, you need to develop a strategy that confronts all five competitive forces. This will not only protect the company from competitors, but also ensure a reliable competitive position in the market.

When developing this model, M. Porter emphasized that out of five competitive forces in the industry, only one factor dominates, which determines the organization’s strategy. It is worth paying attention to the factor on which the organization can influence in order to change it.

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Sales Strategies Toolkit. Part 2

 

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Brand Strategy

 

WHAT IS A BRAND STRATEGY?

A Brand Strategy serves as a blueprint for all marketing activities in order to achieve stated business objectives. Disciplined observance of this key governing document will deliver a powerful, focused and consistent brand that will grow more valuable over time as brand promises are delivered and desired brand recognition accumulates.

BRAND STRATEGY PROCESS

The brand strategy will be reflected in the brief delivered at the end of the engagement which will generally feature: brand positioning, brand identity and key messaging.

90 DAYS+ (RUSH SERVICES AVAILABLE)

DISCOVERY

Employee Intake

Brand Study & Market Research

In-depth External Interviews and Surveys

DEVELOPMENT

Mission, Vision & Values Exercise

Management Discussion of Management Tools

Competitive landscape, SWOT, Porter’s 5 Forces etc.

DELIVERABLES

Brand Positioning Document

Key Messaging around Competitive Advantage

CREATIVE DIRECTION

Once a Brand Strategy is established, developing and executing Creative Direction can commence. Creative Direction or “Brandwork” encompasses defining and expressing the look, feel and sound of the Company. Brandwork refers to GENERATING new brand assets such as but not limited to:

• Brand Style Guide - Logo Protocol, Typography, Color Palette

• Brand Design Approach across Digital, Print and 3D spaces

• Photography & Supporting Images

STRATEGIC SERVICES

Marketing without Strategy is Dead. We help companies define goals, objectives and tactics, setting a framework for success. We also offer fresh perspectives and new ideas.

Strategic Consulting Services include but are not limited to:

• Digital Strategy

• Strategic Plan Development

• Marketing Plan Development

• Product Development

• Digital Strategies Ideation

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The 7 Strategic Phases of the Product Planning Process

 

Provided by the International Finance Corporation

The strategic phases of the product planning process is a sequential set of steps encapsulating a given product’s entire life cycle. The first step is ideation. The last step is plotting how to sunset a product. Many different skills, methods, tools, and stakeholders are involved in various aspects and phases.

The only true consistent figure in this process is product management. Product managers take the reigns as early as product definition and concept vetting. They bring it to life, nurture its growth, and ultimately put it to bed one final time.

Before diving headfirst into any of the strategic phases of the product planning process, it’s essential to understand all the steps. While mostly discrete activities, they do build on each other. A faulty foundation can result in a wobbly, flawed future.

1. Product Concept Development

This initial phase might be the most fun and creative stage in the product lifecycle, and it’s the most critical. Businesses come up with lots of ideas. So only the most promising projects must get the traction and resources they deserve.

So, once there’s an initial idea internal folks are excited about, it’s time to employ some of the available tools and techniques for some quick market validation. These tests give the team confidence they’re onto something with real promise.

A key step in this phase is product discovery. This process gives the product team a much deeper understanding of the problems potential customers face and the user personas the solution can target. Without a solid foundation of who the product is for and which of their pain points it solves, there’s little hope of finding product-market fit.

Armed with a good idea and a solid understanding of the key problem, the concept is then fleshed out while gathering additional information.

2. Competitive analysis

If a company has stumbled onto a great idea, there’s a high likelihood they’re not the only ones to have this epiphany. That’s why the next step is surveying the landscape. You do this to see how the product concept compares to what’s already available or under development.

The goal here is to understand the other options potential customers already have. Sometimes there will be a direct competitor with a relatively similar offering. There may be broader solutions that include similar functionality to the product in question. Just as importantly, an effective competitive analysis must include completely unexpected, less-than-elegant workaround solutions potential customers use to solve their pain points.

This includes using spreadsheets for building product roadmaps, authoring code in a plain text editor, or building animations in PowerPoint. People often use the tools they already have at their disposal. Changing those behaviors may be just as important and challenging as taking on direct competitors.

3. Market Research

Still not done with homework! Now that the business has a handle on how its solution fits into the scene, it’s time to see if its differentiated approach to solving user problems holds up.

Market research typically involves both qualitative and quantitative research. Surveys and aggregated data can indicate trends, help calculate the total addressable market, and serve as valuable input to the prioritization process.

Meanwhile, qualitative research can help product teams get to the “why” at the heart of the solution. Using focus groups, interviews, and other in-depth research methods. These methods add both color and a sense of humanity to the research and development process. An added benefit is that they challenge assumptions.

4. Minimum Viable Product development

The tail end of the market research phase may also entail developing a Minimum Viable Product. An MVP is functional for gauging the reaction and interest of likely buyers. It only includes the most vital features and functionality based on the business’s understanding of which user stories customers need most. It is laser-focused on solving core problems.

During MVP definition and development, the team may begin employing prioritization frameworks. MVPs determine which items would deliver the most “bang for the buck” and must be in place for the initial product offering. Frameworks focused on core functionality versus product line expansion are a good fit at this time. Examples include the jobs-to-be-done framework, which ensures the business is building products customers actually want and use.

By getting something to the market quickly, the company can validate its concept and generate user feedback. This is crucial during these early stages. It serves to inform for adjustments to perform key tasks at launch, and the value proposition and messaging matches the offering.

5. Introduction and launch

With “Version 1.0” about to become a reality, it’s time to take this idea to market. Even if it still bears a “beta” label. The hard work of generating awareness and demand often starts well before the “download” link goes live.

The product marketing team should be generating demand and building some buzz for the offering in anticipation of the release.

Using A/B testing on different messaging and price points to build up a list of interested parties and validate the value proposition’s efficacy. Press and analysts are briefed in advance and given product demos. This seeds the media market with coverage when the grand unveiling occurs.

A robust mechanism for soliciting, collecting, aggregating, and analyzing user feedback must be in place at launch. Asses the first impressions and the efficacy of different campaign messages and tactics. The results inform plans and how to allocate resources for wider promotion and growth.

Employing product analytics and customer research, product teams can begin measuring product-market fit. If gaps are identified, they can be added to the product backlog in preparation for future prioritization and product roadmapping activities.

6. Product lifecycle

Mature products enter a new phase of existence. Typically, this is a cycle of iterative improvements and modifications. Interspersed with more significant expansions (or removal) of functionality and capabilities.

At this point, the product roadmap becomes indispensable. As processes mature, release cadences are established, and the focus shifts to enhancements and growth. KPIs, goals, outcomes, and objectives will evolve throughout the product lifecycle. It will shift based on both the success and struggles of the product as well as the organization.

While rarely boring, this is the most predictable and routine phase of the product lifecycle. Suppose the product continues to find traction and adequate growth while establishing profitability. This phase may last for years, if not decades assuming the product remains viable and there’s a persistent market for it.

To synchronize strategic objectives with resource allocation and development priorities, structure a product roadmap using themes. Themes are excellent to ensure efforts remain focused on what matters most. This method still gives the implementation team some latitude in an Agile development framework.

7. Sunset

All things must end. For some lucky product management professionals, this never happens on their watch. However, statistically, there’s a pretty good chance they’ll have to say goodbye to an entire product or major component at some point during their career.

This isn’t always a bad thing. In fact, it’s just an inevitable part of the strategic phases of the product planning process. It’s a phase in which you are retiring a product due to a superior offering’s arrival. Another reason is a dwindling need for a particular solution. This is because the problem is no longer acute enough to warrant a product.

But wrapping up a longstanding offering has many implications. Using a checklist can ensure all the aspects are properly addressed during the wind-down period.

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Discover the Power of Strategy Execution

 

Webinar Highlights

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• Global Expertise: Gain insights from senior consultants and trainers with over 125 years of combined consulting and training experience across various sectors, including private, public, and nonprofit organizations
• Certification Opportunity: Explore how you can become a certified Strategy Execution Professional (SEP), aligned with industry standards and best practices

Key Takeaways

• Harness the five critical imperatives for strategy execution success: 1. Leadership and Governance; 2. Creating a Performance Culture; 3. Aligning and Operationalizing Strategy; 4. Strategic Project/Portfolio Management; and 5. Performance Analysis, Reporting, and Informing
• Learn how to evaluate and strengthen existing strategic plans for maximum impact
• Infuse agility and innovation into your strategy implementation for exceptional results
• Master the art of clear communication and change management – keys to successful strategy execution
• Create a customized Strategy Execution RoadMap to help guide implementation in your organization’s unique needs

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