Part One © 2007 John Wiley & Sons Strategic Analysis Copyright © 2010 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 Chapter - External and Customer Analysis PPT 2-1 Chapter Two © 2007 John Wiley & Sons External and Customer Analysis Chapter - External and Customer Analysis PPT 2-2 The Role of External Analysis StrategicDecisions Decisions Strategic Whereto tocompete compete •• Where Howto tocompete compete •• How External External © 2007 John Wiley & Sons Analysis Analysis Identification Identification Analysis Analysis Trends/futureevents events •• Trends/future Threats/opportunities •• Threats/opportunities •• Information-need Information-needareas areas •• Scenario Scenarioanalysis analysis Strategicuncertainties uncertainties •• Strategic Chapter - External and Customer Analysis Figure 2.1 PPT 2-3 © 2007 John Wiley & Sons Strategic Uncertainties Strategic Uncertainties Strategic Decisions • 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? • • 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 Chapter - External and Customer Analysis PPT 2-4 Strategic Uncertainties ••Performance Performanceimprovements? improvements? © 2007 John Wiley & Sons What What will will the the future future demand? demand? Chapter - External and Customer Analysis ••Competitive Competitivetechnological technological developments? developments? ••Financial Financialcapacity capacityof ofhealth healthcare care industry? industry? PPT 2-5 Customer Analysis © 2007 John Wiley & Sons Segmentation • Identification of customer groups that respond differently from other groups to competitive offerings Thus, a successful segmentation strategy requires the conceptualization, development, and evaluation of a targeted competitive offering • Who are the biggest customers? The most profitable? The most attractive potential customers? Chapter - External and Customer Analysis Figure 2.2 PPT 2-6 © 2007 John Wiley & Sons Examples of Approaches to Defining Segments Customer Characteristics • Geographic • Type of organization • Size of firm • Lifestyle • Sex • Age • Occupation Chapter - External and Customer Analysis Figure 2.3 PPT 2-7 © 2007 John Wiley & Sons Examples of Approaches to Defining Segments Product-Related Approaches • User type • Usage • Benefits sought • Price sensitivity • Competitor • Application • Brand loyalty Chapter - External and Customer Analysis Figure 2.3 PPT 2-8 Segmentation How should segments be defined? – Benefit Segmentation – Price Sensitivity © 2007 John Wiley & Sons – Loyalty – Applications – Multiple Segments versus Focus Strategy Chapter - External and Customer Analysis PPT 2-9 The Brand Loyalty Matrix: Priorities © 2007 John Wiley & Sons Customer Customer Non-customer Non-customer Chapter - External and Customer Analysis Low Low Loyalty Loyalty Moderate Moderate Loyalty Loyalty Medium High Highest Low to Medium High Zero Figure 3.4 Loyal Loyal PPT 2-10 Customer Analysis © 2007 John Wiley & Sons Customer Motivations • What elements of the product/service customers value most? • What are the customers’ objectives? What are they really buying? • How segments differ in their motivation priorities? • What changes are occurring in customer motivation? In customer priorities? Chapter - External and Customer Analysis Figure 3.2 PPT 2-11 Customer Motivation Analysis © 2007 John Wiley & Sons Identify Identify Motivations Motivations Group Group and and Structure Structure Motivations Motivations Chapter - External and Customer Analysis Assess Assess Motivation Motivation Importance Importance Assign AssignStrategic Strategic Roles Roles to to Motivations Motivations Figure 2.6 PPT 2-12 © 2007 John Wiley & Sons The Customer as Active Partner • Encourage Active Dialogue • Mobilize Customer Communities • Manage Customer Diversity • Co-creating Personalized Experiences Chapter - External and Customer Analysis PPT 2-13 Customer Analysis © 2007 John Wiley & Sons 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? Chapter - External and Customer Analysis PPT 2-14 © 2007 John Wiley & Sons 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, by ethnographic research, and by interacting with customers Chapter - External and Customer Analysis PPT 2-15 © 2007 John Wiley & Sons Ancillary Slides Chapter - External and Customer Analysis PPT 2-16 “Chance favors the prepared mind.” © 2007 John Wiley & Sons - Louis Pasteur Chapter - External and Customer Analysis PPT 2-17 © 2007 John Wiley & Sons “Far better an approximate answer to the right question, which is often vague, than an exact answer to the wrong question, which can always be made precise.” - John Tukey, Statistician Chapter - External and Customer Analysis PPT 2-18 “If you don’t know where you are going, you might end up somewhere else.” © 2007 John Wiley & Sons - Casey Stengel Chapter - External and Customer Analysis PPT 2-19 ... analysis Strategicuncertainties uncertainties •• Strategic Chapter - External and Customer Analysis Figure 2. 1 PPT 2- 3 © 20 07 John Wiley & Sons Strategic Uncertainties Strategic Uncertainties Strategic. . .Chapter Two © 20 07 John Wiley & Sons External and Customer Analysis Chapter - External and Customer Analysis PPT 2- 2 The Role of External Analysis StrategicDecisions Decisions Strategic. .. customers Chapter - External and Customer Analysis PPT 2- 15 © 20 07 John Wiley & Sons Ancillary Slides Chapter - External and Customer Analysis PPT 2- 16 “Chance favors the prepared mind.” © 20 07 John