Marketing Environment and Porters Five Forces

Résumé du document

Marketers need to constantly scan the environment for changes in the marketplace. There are a number of ways of doing this. PEST involves examining the Political, Economic, Socio-Cultural and Technological factors that influence a company in its operations. It is essentially a macro study of the environment. Porters five forces examines the competitive structure of an industry. This will be looked at separately as a topic in its own right. In this section of the course, we will review the micro/macro approach to environmental analysis. The marketing environment is composed of the forces and actors that affect a company's ability to operate effectively in providing products and services to its customers. The micro-environment consists of the actors in the firm's immediate environment that affects its capabilities to operate effectively in its chosen markets. The key forces are suppliers, distributors, customers, competitors, the public and the company itself.

Extraits

[...] How micro/macro differs to other methods of scanning the environment. Examples of micro/macro in practice. Porters Five Forces The performance of a company will be influenced by the structure of the industry in which it operates, as this affects the level of competition in that market. There are five main forces in an industry that affect the level of competition: Threat of new entrants Power of buyers Power of suppliers Threat of substitute products Rivalry among existing competitors Porters Five Forces . [...]

[...] Porters Five Forces . cont Bargaining Power of Suppliers Suppliers are in a strong position if there are only a few powerful suppliers of raw materials and the marketer depends on them. This can lead to high prices. If however, there are many suppliers, the marketer may be able to force prices down by playing them off one against each other Porters Five Forces . cont Threat of Substitute Products Where there are a lot of actual and potential substitutes for a product, the industry segment is usually unattractive. [...]

[...] This will be looked at separately as a topic in its own right. In this section of the course we will review the micro/macro approach to environmental analysis. Micro and Macro The marketing environment is composed of the forces and actors that affect a company's ability to operate effectively in providing products and services to its customers. The MICROENVIRONMENT consists of the actors in the firm's immediate environment that affects its capabilities to operate effectively in its chosen markets. The key forces are suppliers, distributors, customers, competitors, publics and the company themselves. [...]

[...] Porters Five Forces . cont Rivalry among existing competitors Competitive rivalry reaches its peak typically where there are many equal sized competitors, where market growth is slow and where products or services cannot be differentiated significantly. Intensive competition in a market can drive down profit levels and make a market segment unattractive. If the market growth is slow, competition is more aggressive for any possible gains in market share. Other factors that influence rivalry among competitors include, the storage or fixed costs, diverse competitors, high strategic stakes and high exit barriers. [...]