Marketing strategy
Order Instructions:
You have to write about 2 business models and 2 marketing strategies that its provided on the file. just need a short introduction and 1000 words per 1 model/strategy. Total around 4000 words.
SAMPLE ANSWER
Introduction
Marketing strategy is a plan aiming at a goal of increasing sales and having a comparative advantage over the competitors. On the other hand, a business model is an actual representation of an organization of all interrelated architectural and financial designed by a business institution for both present and future guiding to reach a specific goal. Business models and marketing strategies nowadays are becoming more and more important in any business field. They are serving, as a core management discipline in the present world business is it in a financial or accounting organization. The thesis of this essay is to find out what are the characteristics of a good business model. It entails finding its importance in the field of business, the challenges that are faced when coming up with a business model. In addition, the discussion will discuss the diversified different types of marketing strategies. The importance of marketing strategies and what difference they bring in an organization will also be given.
Discussion
- Business Models
- SWOT Analysis
SWOT analysis has been defined by Yean Ying, Min & To Phuong (2009, p. 1105) as a strategy tool that is aimed at determining a company’s competitive advantaged. Ding-Hong, Tie-Dan & Chang-Yuan (2014, p. 68) argue that SWOT analysis is a tool that is aimed at analyzing a company’s strengths and opportunities against the threats and weaknesses. This tool is important as it can help practitioners determine the best ways possible to assist their organization to become competitive in the market. The motive behind this toll is to analyze a company’s prospects with paying attention to the bigger picture in mind (Everett 2014, p.58). For this tool to be certain effective information need to be acquired. This information ranges from internal to external factors that affect the business either positively or negatively Milosevic (2010, p.78). The internal information assists the practitioners to spot the strengths and weaknesses the firm establishes in its operations. The external factors are critical to ensuring that a company analyzes its threats and opportunities in the external environment.
Strengths are essentially factors that give a firm a competitive edge. Weaknesses, on the other hand, are factors or elements that are harmful if certain competitors to use them against the respective firm (Ying, Min & To Phuong 2009, p.1110). Opportunities are those favorable situations that can bring competitive advantages. Lastly, threats are unfavorable circumstances that tend to diminish the competitive advantage of a firm. The use of SWOT analysis best sits when assessing the services provided by a project. In addition, the tool is indispensable to determine the relationship between project stakeholders. In emphasis, the toll is indispensable in digging dip a problem in a company. The tool is applicable in intense situations that require the immediate solution to emerging issues. The emerging issues can include a drastic fall in profit (Ying, Min & To Phuong (2009, p. 1109). The tool can also be used to determine where change is possible. The effectiveness of the tool can be measured easily. The tool is effective if it clearly sports the strengths, weaknesses, opportunities, threats of a company. Furthermore, the performance of the tool is measured by the extent at which the recommendations given by the tool assist the organization to become competitive advantage (Ying, Min & To Phuong 2009, p.1106). In simper terms, the performance of the tool is determined by the extent at which the opportunities are exploited together will the strengths to outweigh the repercussions of threats and weaknesses.
The SWOT analysis is characterized with strengths and limitations. One of the strengths is that the tool is simple to perform. In addition, the tool has practicability (Everett 2014, p.79). A practitioner will find that collecting external and internal factors as well as comparing them to determine a firm’s competitive advantage is very simple. The other strength of the tool is that it is simple to understand. Notably, it gives all the four dimension of a firm using understandable format. Every factor is described individually (Ying, Min & To Phuong 2009, p.1115). It is being observed that the SWOT analysis tool is indispensable when identifying future goals. The tool assists practitioners to predict where the company will be in the future when it excels in manipulating its strengths and opportunities to fight its weaknesses and threats. Another observance pertinence of the tool is that it provides opportunities for further analysis. The tool allows the use of other models such as Blue Ocean Strategy and PEST analysis.
However, the SWOT analysis is short to limitations. Many critics argue that the toll is never serious. Its simplicity makes it a low-grade evaluation tool. One of its drawbacks is that it is cumbersome to read through. This is since it has excessive lists of strengths, threats, weaknesses, and opportunities. In addition, the tool is argued to have no prioritization of factors. In this regard, the tool is said to give each factor an equal measure. This is not true as Everett (2014, p.58) argue because some factors have more pressure on the firm than others. Another drawback of the tool is that it broadly describes its factors. This creates confusion in some cases. Ying, Min & To Phuong (2009, p.1105) argue that mush of what it is given by the tool are just opinions and not facts. Everett (2014, p.68) adds that a tool is a confusing tool since it lacks a recognizable method to distinguish between strengths, opportunities, threats, and weaknesses.
One instance in which SWOT analysis was used effectively was when Teys Australia was experiencing falling profits (Milosevic 2010, p.98). The top management carried a quick analysis to determine what was affecting the organization despite that the company is one of the biggest meat processing companies on the Australian land. The management got that its strengths include a strong brand, efficient production methods, and accessibility to global markets. The analysis also found that the firm had the weaknesses of vagaries of weather, animal disease outbreaks, fluctuating on major world currencies (Ying, Min & To Phuong 2009, p.1125). On top of that, the company found out that it had the opportunities to enjoy a larger market share in Japan and Indonesia. However, it observed that the threats ranged from the growth of the poultry industry, disease outbreaks, and climatic conditions. Therefore, it came to find that outbreak of diseases and climatic conditions were the major cause if decreasing profits. Thus is devised to use the government and its resources to do research to find cures for major cattle-related diseases (Milosevic 2010, p.145). Currently, the company is one of the major exporters of beef to Japan, Taiwan, and Indonesia. In conclusion, the SWOT analysis has fund four pillars of seizing and maintaining competitive advantage (Everett 2014, p.78).
- Build on strengths
- Minimization of weaknesses
- Seizure of the opportunities
- Counteract threats
- PESTEL Analysis
The PESTEL model is the different version of the SWOT analysis. This is because it entirely deals with external forces. The PEST analyzes the political, economic, technological, and social factors in the external environment of a firm (Kader, Noor, Wilson & Mohammad 2014, p.67). These external factors are known to affect the activities and performance of a firm. The model engages in collecting and portraying information that deals with external factors which affect or might have affected the firm. The importance of this model is that it needs a firm to create both opportunities and threats for an organization. The practitioners need to know the instances when to use the tool (Gregorić 2014, p.562). These situations are best favorable when finding the current external factors that influence the organization.
The analysis is also applicable to identify external factors that may alter in the future. The other instance when the model is applicable is when the company wants to manipulate changes (opportunities) to shield against them (threats) better than competitors would do (Kader, Noor, Wilson & Mohammad 2014, p.68). The idea behind the analysis is that if a project is better placed than that of competitors, the company will be able to respond to changes more effectively. The political aspects can include both internal and external factors. The internal factors deals refer to those political aspects that are within the firm such as personal interest in the implementation of the projects. The eternal political factors include those factors that a firm cannot control such as governmental regulations. The economic factors include the macro and micro-economic events that relate to the function of an organization. The internal microenvironment engages in verifying the viability of an activity in the organization developments (Zalengera, Blanchard, Eames, Juma, Chitawo & Gondwe 2014, p.316). The macro-economic include the unavoidable government taxes, inflation, and unemployment. The sociological factor includes taking into consideration all events that affect the market and community socially. Technological factors involve taking into considerations all issues that affect the technology of the firm.
The performance of the PEST analysis can be evaluated by observing the extent at which a firm responds to the external factors (Kader, Noor, Wilson & Mohammad 2014, p.70). For instance, it assists a firm to product development. Carrying out a proper appraisal of the external factors, a firm can balance the outcome of each to see if it will unleash the product to the market. The other dimension in measuring the performance of the PEST analysis is by looking how an organizational change has been experienced developments (Zalengera, Blanchard, Eames, Juma, Chitawo & Gondwe 2014, p.326). For instance, when a firm wants to change one function of the department, the tool can be very helpful in identifying the hidden aspects that SWOT analysis, for instance, cannot find.
However, there are certain limitations and advantages associated with the PEST analysis. One of the advantages is that the tool is important it encourages the development of strategic thinking (Kader, Noor, Wilson & Mohammad 2014, p.72). It enables the concerned parties to think strategically on how to deal with a project. The other advantage is that it may raise awareness of the potential threats to a project. It also assists an organization to identify opportunities. Not only does the tool enable the form to identify opportunities, but it also assists the organization to exploit the opportunities (Zalengera, Blanchard, Eames, Juma, Chitawo & Gondwe 2014, p.346). In emphasis, it assists an organization to anticipate future difficulties to take actions on how to avoid or minimize them. Notably, one of the disadvantages is that the tool is entirely external. It only deals with external factors. It ignores the place of internal factors such as the place of the employee in the production line. The other limitation of the model is that it requires constant updating for it to remain relevant. The other observable feature of the model is that is based on assumptions. Much of what it says cannot be verified. Most of the recommendations given by the tool are rigid. It, therefore, becomes a problem for the projects of a firm to anticipate developments (Zalengera, Blanchard, Eames, Juma, Chitawo & Gondwe 2014, p.336). This is as far as the business environment is ever changing. The last noted disadvantage of the tool is that it allows its users to over-simplify the information that is used. Therefore, it creates the possibility of missing the most important data.
The use of the PEST analytical tool assisted a firm to a scenario. The tool was used by Wal-Mart Australia to identify its potential threats for the external environments (Kader, Noor, Wilson & Mohammad 2014, p.72). The supermarket observed that political factors such as heavy taxation and currency fluctuations. The supermarket also found that economic facts such as high inflation rate and higher consumer debt in Australia made to unable to diversify its operations (Zalengera, Blanchard, Eames, Juma, Chitawo & Gondwe 2014, p.366). In addition, the company realized that social factors such as an emphasis on safety by the Australians made it unable to unleash new products due to fear of rejection. The technological factor that Wal-Mart assessed was that ecological factors such as sustainability made to lose its role on sustainability. With that information in mind, Wal-Mart was able to differentiate the existing products (rebranding) to attract customer attraction (social factor) to make sales to counter heavy government taxes (political) (Shilei & Yong 2009, p.2097). In addition, by product differentiation, Wal-Mart was able to increase sales to diversify its operations (technological) to remain competitive in the market (economic).
- Marketing strategy
- Blue Ocean Strategy
Definition
This concept works based on developing uncontested market space rather than competing with substitute opponents selling similar goods or services in the market (Chan &Mauborgne 2011, p. 105). In other words in Blue Ocean marketing strategy, demand is created rather than competing over the limited demand, which makes competition eventually unnecessary. This explains the reason for the revival of circus industry despite the long-term decline of the industry, which now is doing incredibly well profit wise (Mohamed 2009, p.28). The concept is distinct to another model because it does not encourage direct competition with rival firms. Relatively, the model advice on the importance of using skill to create a strong image/brand. Čirjevskis, Homenko & Lačinova (2010, p.162) argues that the modern companies are not able to leverage their activities such that they want to achieve competitive advantage by using price strategies to outdo each other. The author attested that the most significant weapon to win in the market is the one that is focused on attracting as many customers as possible. Therefore, there is a need to come up with an innovative strategy to deal with the competition in the market.
Aims and Objectives of Behind Concept of Blue Ocean Strategy
The main objective of this concept is to enhance national development in nations worldwide by transforming local public sectors, states, low costs that cut across ministries, agencies, NGOs, and municipalities at large (Mohamed 2009, p.29). The model is important to ensure that most of the projects formulated by organization go through the implementation stage. The model assumes that a firm can best utilize the available resources to make it competitive in the market (Chan &Mauborgne 2011, p.107). The intention here is not to engage in cutthroat competition with rival firms, but to create a strong brand that other competitors can hardly challenge.
Requirements Favoring the Concept Usage
To discover the ‘Blue Ocean’ primarily the entrepreneurs should discover the five action frameworks to break the trade-off and eventually come up with a new curve. There are certain framework key questions that favor this concept usage (Mohamed 2009, p.38). One of the questions is related to elimination. Elimination, in this case, implies that the company identifies the factors that have existed in the organization that lowers its competitive advantage. In addition, the company needs to remove such factors. The other question relates to creation (Chan & Mauborgne 2011, p.115). In this particular occasion, the company identifies which products that can capture the market share in the market. The third question is associated to reduction strategies. Reduction entails that a company identifies what it should reduce below its level standard.
Measurement of ‘Blue Ocean’ Strategy performance
This strategy uses various approaches to measuring performances (Mohamed 2009, p.48). These approaches include developing a strategic canvas approach. It also gives a map of key performance indicators (KPI’s) which involves comparing one’s company with that of the competitors (Dr.Hilarly,2010), The straight forward approach. Blue ocean development analysis here uses (ERCC) grid meaning elimination, reduction, and rise (Chan & Mauborgne 2011, p.121). The above measures are important to ensure that a firm gauges the extent it has excelled in making its brand strong.
Strength of Blue Ocean strategy
A blue ocean strategy is a crucial tool used in diagnosing whether one’s business has developed a comparative advantage proposition and supporting business models. It has made most businesses grow at a high rate since they can be able to diverse their energy from irrelevant competitions. In addition, the strategy is simpler to use (Čirjevskis, Homenko & Lačinova 2010, p.172). The model gives some of the mechanisms that can be adopted by firms to make them competitive in the market. These include product differentiation and increased advertisements.
Limitations of blue ocean strategy
One of the limitations is that the model is unfeasible. The model is viewed as unfeasible since it is claimed no group was used since it is not stated how many companies failed as a result of using this strategy (Čirjevskis, Homenko & Lačinova 2010, p.171). It is argued that rather than Blue Ocean becomes a theory; it attempt to backup the already existing frameworks. This statement implies that Blue Ocean draws assist form other models such SWOT analysis and PESTEL analysis. The model has no any established methods of testing its recommendations. Another limitation of the model is that it is easily manipulated since each factor seems to contradict each other (Chan &Mauborgne 2011, p.127). The final limitation of the model is that is assuming that marketing success will come as just a matter of course. This is not true on the market situation. Gaining market share is a strenuous activity that takes a considerable time to perfect it.
Applications of Blue Ocean Strategy
China mobility is one of the instances the Blue Ocean strategy was implemented perfectly. China CEO Wang Jianzhou said that China market has been adapting the ocean market strategy, and that is why they have no worries of their rivals whatsoever, Starwood. In an interview Robin Pratt vice president, ‘six sigma’ said how they are taking systematically in applying the concept, TATA Motors (Čirjevskis, Homenko & Lačinova 2010, p.178). They have adopted the skills of differentiation and low cost as it is stated in Blue Ocean Strategy. Another instance where the application of the Blue Ocean strategy was effectively used was experienced by Casella Wines in Australia. The company decided to make new wines drinking rules (Chan &Mauborgne 2011, p.131). The final product that was unleashed was Yellow Tai. The brand became highly recognizable on the Australian land. However, the price remained the same even with the unleashing of the Yellow Wine.
- Michael Porters Competitive Positioning Strategies
Definition of concept
The three porter’s generic strategies target as he had written in 1980 comprised of; cost leadership, differentiation, and focus. The basis of this concept is to describe how an organization or a company does to have a competitive advantage in the market (Grigore 2014, p.32). According to this strategy, a company has a choice of choosing one of the three or gain the risk of wasting its economic resources. Porter’s strategy was designed to combine and interact cost minimization strategy, market focus strategy and finally product differentiation strategy. According to Porter’s strategy, a company is comprised of major segments and there exists two major types of competitive advantage. One of the segments is oriented towards the minimization of costs (Lombana 2011, p.33). The other segment is designated to affect product differentiation. One requirement for a company to gain a competitive advantage is that it has to make an effort of picking a scope ahead of its competitors at least five times.
Aims and Objectives of Michael Porters Competitive Positioning Strategies
The aim of the model is to find the competitive rivalry in the market. By identifying the degree of competitive rivalry in the market, a company drafts mechanism on how to counteract it. The degree of rivalry may be high, for instance, due to the presence of high exists costs. The model also aims at observing the threat of new entrants. The company must be aware of the newcomers in the market to come up recommendations on how to deal with them (Lombana 2011, p.36). The threat of new entrants may be high due to government-driven obstacles. The other function of the model is to identify the threats of substitutes. The threat of substitutes is brought by such factors as brand loyalty, switching costs, and trends. The fourth factor of the model is the determination of the bargaining power of suppliers. Suppliers have power in the market when they are small in numbers (Grigore 2014, p.34). The last factor addressed by the model is the bargaining power of consumers. Consumers have power when the there are close substitutes, or there are different companies in the market that offer the same products.
Requirements and Conditions that Favor Competitive Strategy
This particular strategy works efficiently when the cost of production is quite costly. The model is mainly used when it comes in minimizing the cost. The model is also pertinent in a situation where the particular product is well developed, and no similar products can rival it due to its uniqueness (Grundy 2009, p.213). When a company focuses entirely on a particular segment that is demanded by customers, this leads to a quality product thus enhances loyalty to customers making it difficult to compete.
Approaches used in Measuring porters Competitive Strategy Performance
Cost Leadership Approach
This simply means that a company is enjoying more profit by producing at a lower cost and even if there is a price war, the company still gets profits while its rivals suffer losses. The company can have the privilege to enjoy this if there is accessibility to the capital required. When a company can obtain capital investment in both assets and raw material, this blocks other rivals since not many can afford such an investment. Furthermore, it ensures continuity in profit enjoyment, high level of expertise in the manufacturing process (Grundy 2009, p.223). This is meant to ensure that a company enjoys minimal cost because of the qualified and experienced workforce and efficient distribution channels. To attain a minimum cost possible, a company requires its means of transporting products.
Differentiation Approach
This approach mainly entails developing products that offer unique attribute and at the same time valued by consumers. Companies that enjoy this approach they have the following strengths; access to leading scientific research, high level of skills developed products and creative team (Grigore 2014, p.43). It also enjoys a strong sales team with the ability to communicate efficiently that markets products to the consumers.
Focus Approach
Here, a company concentrates on a particular narrow segment and tries to it’s best to perfect it so as to win the consumers loyalty thus able to beat their competitors of the similar product (Grundy 2009, p.225). By this, it considers itself to have performed.
Strengths of Michael Porters Competitive Positioning Strategies
With the help of this strategy, companies have been able to run their companies while producing at a minimum cost, which makes it not to collapse due to profits enjoyment. Companies have been able to lower price to powerful buyers (Grundy 2009, p.232). Companies can comfortably lower prices to defend substitutes without incurring any loss, customer loyalty. In addition, companies can discourage potential entrants in the market. The customers become more attached to differentiating attributes thus reducing threats on substitutes. Brand loyalty has been known to keep customers from potential rivals. A company can focus develops competencies (Grigore 2014, p.43). For instance, buyers have less power to negotiate because of fewer alternatives of similar goods, specialized products protect against substitutes. Finally, proper use of the tool can make rivals firms unable to meet differentiation-focused customer wants.
Limitations of Michael porters Competitive Positioning Strategies
Porters stated that use of more than one strategy would result in failure of the organization. Hence, there is no clear future direction trajectory. It is mentioned that differentiation strategy will be costly which clearly contradicts with that of cost minimization cost (Grundy 2009, p.236). Research writings of Davis state that companies were applying a hybrid strategy perform better than those adopting the generic strategy. Grundy (2009, p.237) challenged Porters by arguing that application of two strategies will result in more competitive. After eleven years, Porter revised his thinking and saw that hybrid strategy can exist (Grigore 2014, p.46). The two focal objectives of low-cost leadership and differentiation clash with each other leading to no direction. Porter had a primary belief in his concept about the invalidity of hybrid business strategy. He argued that the highly prone and turbulent market conditions would not allow the survival of concrete business strategies, since long-term establishment will depend on the ability and the quick responsiveness towards the market and environmental conditions.
Examples of How Concept have been appropriately used
Influencing and thinking in the United States of America and other countries towards health care deliveries (Grundy 2009, p.253). The strategy helps business managers and marketers to look at business powers between different types of departments and enhance the attractiveness and maximum profit.
Reference list
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