VMEdu Welcomes You to the Post-Capitalism Era

It has been said that we are exiting the post-capitalism era, and we weren’t even aware of it. We can thank this monumental shift to advancements in technology. Many terms have been thrown around in regards to what sort of economy we have ventured into—such as the sharing economy or frictionless economy—but what path are we really following?

In a recent article we discussed what exactly the frictionless economy is. The frictionless economy centers around companies that provide platforms on which suppliers and buyers can do business directly. Uber, Etsy, and Fiver are just a few of the hundreds of companies that have sprung up in the last decade offering people the ability to be a “self-entrepreneur.”

According to Alex Chriss, vice president and general manager at Intuit, “What we find so exciting about this trend is it’s solving what has traditionally been the number one challenge any entrepreneur or small business owner faces: finding customers. We’ve seen millions of small businesses struggle to find their next customer – and this struggle has set a bar, a hurdle for entrepreneurs to jump over. Technology is lowering this bar.”

But what about the sharing economy? Companies such as Airbnb and City CarShare allows owners to rent out something that they are not using. This has generally been sharing a house, car, or bike, but the only constant in technology is change, so this sharing could expand to new avenues. Each sharing-economy styled company provides users with ratings or reviews, so that trust is built on both sides of the transaction.

So, which economy are we really entering? One thing that we have learned from technology is that there are no limits. So, why would we limit ourselves by believing that we are entering just one sort of new economy? It seems to be that we are entering various economies that will create branches rather than one straight path. VMEdu gives professional trainers and educators the ability to be a part of both the frictionless AND sharing economy, with its Learning Management System (LMS). The VMEdu Authorized Content Partner (V.A.C.P.) program is one of the finest adult learning platforms available. The V.A.C.P. program is for anyone looking to create online adult learning courses for any subject and in any language.

As a partner, you can create and upload your courses with the user-friendly VMEdu Course Builder. You can also run the courses on your website for free. Course materials can include videos, test questions, flashcards, glossaries, case studies and more.

Once your courses are uploaded via the VMEdu Course Builder you have the option to sell them to the VMEdu network of more than 750 Authorized Training Partners (V.A.T.P.s) in 50+ countries. Having the support of such a strong network will help you reach a larger number of potential consumers in a shorter amount of time.

The V.A.C.P platform gives you the ability to sell your own courses, do business directly with customers that have been provided for you, and be your own boss in addition to hosting your courses on your own website to share with your contacts. This program equips you for whichever future economy becomes our reality.

To know more, please visit: www.SMstudy.com

All about GE-McKinsey Matrix

The GE-McKinsey Matrix was developed in response to the shortcomings of the BCG Matrix, which does not account for a number of factors. It was originally used for a visual representation of GE’s 150 business units to determine which business units were doing well, which needed support, and which should be discontinued. However, the matrix can also be applied to a product portfolio. It evaluates each product on two parameters, market attractiveness and product position, which are the labels of the axes on the matrix.

Market attractiveness and product position are determined by a weighted score for all the relevant factors that contribute to each. There are three levels for each parameter—high, medium, and low—giving the matrix nine boxes in total. The placement of each product on the matrix determines the strategy to be used for the product. A-6 shows the GE-McKinsey Matrix.

Products that fall above the diagonal line are high performers, or are those with potential for either growth or cash flow. These are the products on which a company should focus. Products that fall below the diagonal line are those that typically drain a company’s resources, with small returns and little potential for growth. These products should be analyzed thoroughly to determine which can benefit from selective investment in order to move them above the diagonal, and which need to be discontinued.

The factors used to determine market attractiveness are market growth, market size, opportunity to differentiate product and/or services from others in the market, profitability, intensity of competition, risk to returns, pricing trends, entry barriers, demand variability, distribution structure, and technological developments. The factors involved in determining product position are strength of assets and competencies, customer loyalty, cost position relative to competitors, distribution strength, record of technological or other innovation, relative brand strength, market share, and access to financial and other investment resources.

Advantages and disadvantages of GE-McKinsey Matrix:

Advantages:

  • This matrix takes into account a number of factors that the BCG Matrix does not.
  • It is visually easy to understand and provides more options to place a product as compared to the BCG Matrix, due to the inclusion of the “low” level on both axes.
  • It is conceptually similar to the BCG Matrix, so anyone who is familiar with the BCG Matrix can easily use the GE-McKinsey Matrix.

Disadvantages:

  • This matrix does not take into account the synergies between various products. Discontinuing one might adversely impact another.
  • The scoring of the various factors using the weights is subjective and leaves the tool open to bias.
  • It does not help in allocating the relative investments for each product.

Should You ask Permission to Market?

Everyone despises commercials. It’s true, don’t even try to deny it! There is not one single person who would rather listen to a commercial than jam out to a new song. But we put up with them. Sort of.

Some people turn the volume down while a commercial is on the radio or take out the trash while they wait for their favorite television show. Yet, this form of conventional mass media marketing actually works. People hear a commercial about Tide laundry detergent, they may tune it out, but when they go to the grocery store, they select Tide because they have heard the name.

As defined by Marketing Strategy, book one in the SMstudy® Guide, conventional mass media marketing is “print advertising (newspaper, magazine, insert, or run of paper), mass mailers, television (network, cable, or syndicated), radio (national, local, satellite, or podcast), and out of home advertising (billboards, street furniture e.g. bus shelters, transit, alternative, e.g. stadiums).”

Conventional mass media marketing is also referred to as interruption marketing, or put more simply, marketing that interrupts.

But we have stepped into a new age, the age of the internet, which has given rise to fragmented new age marketing. “Since the late 1990s, with the increasing popularity of the internet and, more recently, smartphones, many options now exist for advertisers to reach a global audience using digital media marketing methods such as mobile phone apps, Google, Facebook, Twitter, LinkedIn, YouTube, QR codes, gamification, and proximity marketing (e.g. Foursquare),” states SMstudy.

Fragmented new age marketing is also referred to as permission marketing, or put more simply, where people have to give you permission to market to them.

According to Krista Neher, content marketer for Boot Camp Digital, “Most online marketing is permission marketing, where people have to give you permission to market to them. People choose to follow you on Twitter, subscribe to your email or visit your website. They make the choice to connect with you (and allow you to market to them) because you provide great content. You must be interesting or useful for people to agree to your interruption marketing, or they will just ignore you. Permission marketing is about providing value so that people choose to view your marketing.”

So, should you stop putting marketing dollars towards interruption marketing? No, because as previously stated, it does work. But by putting an emphasis on permission marketing a company can ensure that their time and money is not being wasted. Conventional mass media marketing is not a sure deal, while fragmented new age marketing is.

Neher provides some guidelines to follow so you can successfully incorporate permission marketing into your marketing strategy.

  • Change your mindset: Stop thinking about selling, and start thinking about how you can create value for the people that you want to reach (in a way that links to your business and marketing strategy).
  • Change your message: Your message can’t be so advertising-ish. Your message must be something that people actually want to read (again, while at the same time growing your business).
  • Evaluate all of your channels: What is interesting is that even traditional marketing works better when it meets the difficult bar of both selling your product and being interesting to your customers.

This is an exciting time to be a marketer. The possibilities are endless as long as you follow one simple rule, show them, don’t tell them. But don’t forget conventional mass media marketing in the process. There is still a use for it. Interruptive and permission marketing can run parallel, it’s all about how you position your brand.

As noted by SMstudy, “With all of these options, many marketers find it beneficial to use an integrated approach to marketing by leveraging the strengths of various types of media.” Good luck fellow marketers, it’s a brave new world.

For more interesting articles visit http:://www.SMstudy.com

Sources:

Krista Neher, “Permission Vs. Interruption Marketing,” content writer at Boot Camp digital. http://bootcampdigital.com/permission-vs-interruption-marketing/

PESTEL Analysis

Market analysis can serve as a flashlight to help you get a glimpse of what might be ahead for you and your business. As a part of this, PESTEL Analysis is used to examine macro-environmental factors that are sources of opportunities and threats, and therefore positively or negatively impact the organization, its customers and suppliers.

There are six factors to PESTEL analysis: Political, Economic, Social, Technological, Environmental and Legal.

Political Factors—These factors describe how the government and the political system may influence the company’s Corporate Strategy.

Examples of Political Factors:

  1. Government incentives for industrial development in certain regions may impact decisions related to location of factories.
  2. The annual financial budget of the government may significantly impact a company financially. For example, a parts supplier in the rapid transit industry setting revenue projections for a particular geographic region must consider the current political position and the expected government financial support for transportation and infrastructure improvements.

Economic Factors—These factors are related to the economic structure and policies of an economy and its interaction with other economies. They influence how businesses operate and grow.

Examples of Economic Factors:

  1. Interest rates for borrowing may impact funding and investment decisions of a company.
  2. Inflation rates impact input costs (that is, salaries, cost of raw materials, property costs) and should be considered when planning the Marketing Strategy.

Social Factors—These factors reflect the social and cultural state, attitudes and behaviors prevalent in a market. Changes in these factors may impact the demand for a particular product or product category.

Examples of Social Factors:

  1. An aging population creates a growing market for products targeting senior citizens.
  2. A growing trend toward nuclear families necessitates services such as day-care facilities for children.

Technological Factors—These factors describe the technologies and R&D efforts that are relevant to a company and the ecosystem within which such technologies function. They may help the company gain sustainable advantage in its market through product or process innovation.

Examples of Technological Factors:

  1. A faster mobile network enables real-time video conferencing with the company’s field sales force.
  2. An increase in Internet availability and the growth and efficiency of e-commerce and its distribution channels enable more people to shop online.

Environmental Factors—These factors are related to the ecological environment and include aspects such as climate change, deforestation and pollution, among others, which may affect how some companies function.

Examples of Environmental Factors:

  1. The appliance industry manufactures CFC-free refrigerators to prevent further damage to the ozone.
  2. Automobile manufacturers reduce vehicle emissions in order to decrease air pollution.

Legal Factors—These factors are related to the legal and regulatory framework of the market in which a company operates or is planning to enter. Companies need to adhere to the laws and regulations that exist in their markets, irrespective of how restrictive they may be. At the same time, the legal framework may also give rise to additional opportunities.

Examples of Legal Factors:

  1. Laws that mandate the use of bike helmets provide a boost to helmet manufacturers.
  2. In several countries, anti-monopoly laws make it difficult for large companies to acquire competitors.

On the pathway to success, you will find these factors may be a benefit or an obstacle, but without a detailed and comprehensive PESTEL analysis you end up stumbling in the dark.

The New Wave in Digital Marketing

For roughly a decade technology has been facilitating the brushstrokes to paint an ever clearer picture of consumer behavior. Over time, analytics has helped solve the mysteries of the where, the when and the how often as it pertains to clicks, views or anything else online for that matter. In the process, the human behind the consumer data has been neglected.  The time has come to treat them like real people again.

The next new wave in marketing (there’ve been two so far according to reliable sources) will be marked by a return to the personal touch. There exists an emerging opinion that a continuation down the path of the science of analytics will not yield the desired results. And if anything, at some point it becomes a liability and deterrent to constructing strong enduring relationships with customers. The kind built on trust, respect and understanding. Or so believes Jahia, a leading User Experience Platform for Digital Transformation.

They state: “Building 1:1 customer relationships means relating in the most appropriate way for each customer. It is vital to find the right balance in communicating just enough – too much and they are annoyed, too little and they feel forgotten (or forget you).”

As I mentioned recently in the article “How Information Finds You: Hyper-relevant Content Marketing,” there is a refinement process occurring in digital marketing that emphasizes the use of high-quality content and a marketing strategy that employs the smartest possible implementation based on what is known about the viewer/consumer. This is the future of digital marketing due to several factors, including the phenomena of “peak content”. A more nuanced marketing approach that acknowledges the human being on the other side of the conversation is where everyone should be headed.

Again from Jahia: “The right relationship is not the same for every brand or every customer. It depends on both the product or service you offer and each customer’s individual preferences. The core of that relationship is giving the customer the feeling that they have as much control over the relationship as you do. That includes giving them transparency into what data you keep about them and how you use it — this is the beginning of trust.”

In addition, for the sake of a company’s longevity, to manage and use consumer data responsibly will set any marketer ahead of the curve; soon enough federal regulation will catch up and kinder practices will be required by law. By setting up a marketing system that respects privacy AND manages to market in an informed, logical manner is a vanguard move.

Jahia notes: “Very soon, this privacy and usage standard will not be simply the voluntary action of ethical companies. Emerging legal regulations will make it mandatory as it catches up with the digital revolution. This has already begun to be legislated in European courts. The courts determined that there is a ‘right to be forgotten’. This is just the beginning of the what is to come in the next few years. The courts are recognizing that individual’s privacy rights need to be respected, even on the internet. No enterprise can afford to be behind in this area.”

Creative ways to cultivate real relationships with customers will be the mandate for marketers and sales professionals in the coming months and years. Systematizing that cultivation with a hyper-relevant content strategy is only a portion of what the future will require; the rest will rely on the sales and marketing teams’ skill, intuition and ability to empathize with consumers.

In 2016, the big data boom will settle into the tasteful, refined use of the data to provide value and relevance to the public. Now that we have a clear picture, what marketers do with it matters.

For more intersting articles on sales and marketing, visit www.smstudy.com/articles

Sources:

Discovering Third Wave, Jahia, Feb. 10, 2016. https://www.jahia.com/files/live/sites/jahiacom/files/Discovering%20Third%20Wave%20of%20DX.pdf

The Millennial Impact

Snapchat, the quick and fleeting photo messaging application, has become increasingly alluring for companies wanting to dip their toes in the “Ephemeral Marketing” waters.  Truthfully, the app had a rocky start entering the digital marketing world, but companies such as McDonald and Chat Sports have now mastered the art.

Snapchat launched in 2012 and currently has 50 million users sending more than 400 million picture or video messages (“Snaps”) per day. That is 46 snaps a second. It’s no wonder companies and marketers want to utilize the app!

Snapchat has several features that are useful in marketing a brand or product. You can send pictures or videos to your followers, but the media will only be visible for up to 10 seconds and then it will disappear, as per Snapchat rules. So, the trick is to use the medium effectively considering the time constraints. Companies have also found the story feature to be very convenient, even if it may sometimes require a workaround. Since users can post snaps to their story, but only users that follow a company can actually see the company’s story, social media strategists put on their thinking caps.

One example of social media “assistance” was used by the American fast-food restaurant McDonalds. McDonalds wanted to employ Snapchat to promote a new product, but they had yet to expand their follower base. The company turned to Twitter, another social media platform, to release a photo from their Snapchat account with the words “stay tuned” written in French fries. This generated a curiosity that in turn built their user base. McDonalds then snapped several pictures on their Snapchat story to ensure their product was seen by all of their followers.

Another example comes from Chat Sports. Chat Sports took a different route in order to grow their following.  The company sent a snap to their followers announcing the opportunity to win free baseball tickets if they could get five of their friends to add “ChatSports” on the app. This expanded their base and also provided the company with the capability to reach their target audience.

There are several other ways for companies to market their brand or product on the app. The NBL snapped behind the scenes videos to promote  games. Taco Bell and GrubHub used the app to send snaps with discount offers. But you better be quick if you want to grap the offer; customer only has ten second to take a screenshot of the coupon before it disappears. Companies have even promoted their live events by urging users to send videos of their experience and send it to the company for free tickets.

As stated in Marketing Strategy, book 1 in the SMstudy Guide®, “It is a fact that people now spend more time on the Internet, via smartphones, tablets, or computers, than they spend on conventional mass media, such as television, radio, or newspapers. This is especially true for the thirty-year-old and younger market segment. Since sales and marketing is most successful when it meets the demands of consumers, this change in consumer preferences is significantly altering the sales and marketing landscape for established companies. Businesses are discovering that conventional mass media marketing has limited effectiveness and some customer segments are not even reachable using these traditional media forms. “

A study done by re/code gets to another reason why companies are so keen on Snapchat. Out of the 50 million Snapchat users, 84 percent are Millennials. If Millennials are your target,  then where else would you want to be! Contrary to popular belief, this doesn’t mean that Millennials have a short attention span, it’s that the attention that is given needs to be quick and genuine which is exactly what Ephemeral Marking promotes.

You are So Annoying! Not You, SMstudy, I am on the Phone

It seems that there are some dangers with “going native.”

The U.S. Federal Trade Commission (FTC) has increased its oversight of native advertising online and on smartphones. The most recent company running afoul of this intensified supervision is Lord & Taylor, who just settled with the governmental body over charges that “it deceived consumers through paid article in an online fashion magazine and paid Instagram posts,” according to the FTC.

Part of Lord & Taylor’s problem were efforts to produce and publish native advertising. “Native advertising is a form of online advertising that blends in with its surroundings,” according to Digital Marketing, book two of the SMstudy® Guide. The FTC’s charges identified activities among which were “a seemingly objective article in the online publication Nylon and a NylonInstagram post, without disclosing that the posts actually were paid promotions for the company’s 2015 Design Lab clothing collection.” Here was an attempt to blend in with the surrounding content that seems to have blended in all too well.

“While native advertising can be perceived as annoying, it can also be an effective tool if properly used,” asserts the SMstudy®Guide, and the FTC is addressing both points: annoying and proper. What is the proper use of native advertising? The FTC’s actions against Lord & Taylor has resulted in an agreement between the two entities that is open to comment until April 14, 2016. This means the public can become part of defining what is proper.

While that discussion is going on, another facet of technology-driven changes in advertising will definitely become part of the dialogue: using the smartphone. “Unlike traditional marketing in public spaces–such as billboards, magazines, and television–the smartphone is a highly personal space for the consumer and requires an entirely different engagement model,” says Christina Desmarais in an opinion piece for Inc. magazine online.

With personal engagement comes personal offense. The reaction of the consumer becomes less “Do you really think that little of your customers?” and more “What type of girl do you think I am!”

Those who wish to use native advertising will need to develop a keen sensibility as marketing becomes more personal and the natives become more restless.

 

For more interesting information and articles about Sales and Marketing visit SMstudy.com.

“Lord & Taylor Settles FTC Charges It Deceived Consumers Through Paid Article in an Online Fashion Magazine and Paid Instagram Posts by 50 ‘Fashion Influencers’” (3/15/16) Federal Trade Commission. Retrieved on 3/24/16 from https://www.ftc.gov/news-events/press-releases/2016/03/lord-taylor-settles-ftc-charges-it-deceived-consumers-through

An overview of the SMstudy® Guide is available at http://www.smstudy.com/SMBOKGuide and a free course on Digital Marketing is available at http://www.smstudy.com/Certification/Digital-Marketing-Associate.

The agreement will be subject to public comment for 30 days, beginning today and continuing through April 14, 2016, after which the Commission will decide whether to make the proposed consent order final. Interested parties can submit comments electronically by following the instructions in the “Invitation To Comment” part of the “Supplementary Information” section.

Desmarais, Christina. (2/29/2016) “Why Everything You Know about Marketing is Obsolete” Inc. Retrieved on 3/24/16 from http://www.inc.com/christina-desmarais/why-everything-you-know-about-marketing-is-obsolete.html

Sales Training Program: The Foundation of Corporate Sales

A salesperson is the one who doesn’t think in term of sales rather believes in building a business.  A set of unique personal attributes along with approach to work makes a complete salesperson. It is always difficult to recruit and retain productive salespeople.

So, Sales training is essential for new sales team members as well as experienced professionals to hone their skills to deliver results. As the various Aspects of Sales and Marketing change over time, it is necessary for the corporate sales team to receive training on a regular basis. Sales training keeps the corporate sales team up-to-date about changes in the market, new sales techniques, gaps in existing processes, and changes in the industry with respect to PESTEL factors.

The corporate sales team is the company’s first point of contact with its customers.  Therefore, sales training for corporate sales team should be comprehensive and cover the entire range of processes, tools, and skills required from prospecting to closure.  And in designing sales training programs, the requirements and experience levels of the sales team members are taken into consideration.  If sales training does not match the team’s level of proficiency, it will not be effective and, its value may be questioned by the team.

Sales training should impart the following to the corporate sales team:

  • Knowledge of sales processes: Sales training teaches the corporate sales team about the various processes involved in the sales cycle—prospecting, lead generation, qualification, needs assessment, presentation, and closure. For example, CRM training is essential for a sales team to learn how to plan sales activities by using a customer database to develop target lists and identify customer needs and customer potential for specific products and services.
  • Knowledge of the industry, market, and target segment: This includes knowledge about competitors, understanding of the target segments, knowledge of macro-environmental factors that affect the industry, and knowledge of industry practices. For example, a supplier of manufacturing equipment needs to understand the production processes of its customers which will allow them to provide definite product recommendations to its customers to improve productivity, eliminate waste, or reduce manufacturing costs.
  • Soft Skills: Soft Skills or People Skills are the personal traits that define an individual’s ability to communicate and interact with others. The six critical soft-skills for sales person are communication, flexibility, teamwork, positivity, time management and confidence. Soft skills help the corporate sales team develop and maintain good relationships with prospects and customers.
  • Knowledge of tools and marketing resources: In addition to understanding the CRM system, sales personnel need to be aware of existing marketing resources such as presentation templates, e-mail templates, videos and other internal and external marketing assets that can be used during the sales process. For example, In L’Oreal a gap was seen in product knowledge within its sales team, so they carry out an e-learning program for empowering their team.
  • Motivation: Motivating the corporate sales team is necessary to prevent lags and burnout. Motivational training is more important for existing corporate sales team members than new ones because of their longer exposure to achieving sales targets. For example, Best Buy Company used Path to Excellence initiative. Best Buy awarded sales force badges to ones who implemented concepts taught in training and badges led to four distinct levels of recognition, ranging from bronze to platinum.
  • Business values and ethics: A corporate sales team that demonstrates good business values and ethics will have a significant effect on the success of the organization. The corporate sales team must be trained on business values and ethics, irrespective of their experience prior to joining the company.

There are various modes of delivering sales training to the corporate sales team:

  • Classroom Training:  An instructor in a lecture hall or classroom typically conducts classroom training. This provides a setting for participants to learn new skills and concepts, and to practice and demonstrate the learned skills.
  • E-learning:  In e-learning situations, training is delivered through electronic media and allows sales team to brush up their product knowledge. E-learning can be provided through instructor-led virtual sessions, using on-demand content stored in a central repository, or through online forums for collaborative learning.
  • Libraries/Repositories:  Corporate sales team can use industry reports, sales books, research data, and other texts to increase knowledge about the industry and to improve existing sales processes.
  • On-the-Job Training: For effective real world training, new sales team members are paired with senior sales team members to learn actual sales processes. On-the-job training is traditionally the most commonly used mode of sales training. In Walgreens, “Well Experience” training was given in pharmacy environment to get a hands-on experience. They used games like merchandise scavenger hunts for sales team to familiarize with new store layouts.

Sales training can be carried out using a combination of the above modes of training based on company requirements. Continuous sales training is recommended for the corporate sales team.

Brand Loyalty

Brand loyalty is a metric associated with brand perception in marketing. Brand perception refers to how prospective and current customers react to seeing or hearing about a company’s products or brands and how the company is perceived within the market.

Brand loyalty is reflected by how many customers purchase a brand repeatedly. It indicates the commitment that customers have towards a brand irrespective of the price offered by competitors of similar products and is the basis of a strong relationship between the brand and its customers. The underlying metrics for brand loyalty may be the percentage of repeat customers out of total customers, the frequency of repeat purchases, and the degree to which other brands are also purchased along with the brand under consideration. A high degree of purchase of other brands reveals a low brand loyalty for the brand under consideration. Another way to measure brand loyalty is to examine customer response to situations where a product variant is unavailable. If customers are loyal to a brand, they will either wait until the product becomes available or buy another product variant of the same brand.

Let’s illustrate the idea with some example. Some retail chains use payback / loyalty card to measure brand loyalty by frequency of a customer’s repeat purchase of products from their stores. As part of the loyalty program, these retail companies incentivize the loyal customers by offering cashbacks, payback points and other personalized discounts over and above the listed discounts. Some luxury car manufacturers have strong brand loyal customers who are ready to pay a premium price for a luxury car due to its perceived uniqueness and status. These set of customers are so brand loyal that they book their vehicles well in advance and are willing to wait several months for their order to be fulfilled and they will not accept substitutes.

To learn more about other brand perception metrics, refer Marketing Strategy, the first book of the SMstudy® Guide.

Tools for Exploring Opportunities and Threats

Before entering a new market, targeting a particular segment, or introducing a new product, it is necessary for any organization to explore opportunities and threats to decide which strategy to follow. The external factors that help a company achieve its goals are considered opportunities, while those that hinder a company`s efforts are considered threats.

 

The external environments that can affect the growth of a company make up two groups: the macro-environment and the micro-environment. A company has zero or little control over the macro-environmental factors. These can be the laws of the country of operation, environmental factors such as weather and climate, political situations, and so on. On the other hand, micro-environmental factors can be controlled by the company; these are the factors that have a more direct impact on the operations and success of the business.

 

Porter`s Five Forces for Industry Attractiveness, Market Analysis, Marketing Research, and PESTEL Analysis are some of the tools that organizations can use to explore opportunities and threats.

  • Porter`s Five Forces for industry attractiveness helps a company decide whether or not to enter an industry. If it already has a presence in a particular industry, then using this model enables a company to devise strategies to achieve and maintain profitability. The five forces are the Threat of New Entrants, Threat of Substitutes, Bargaining Power of Customers, Bargaining Power of Suppliers, and Competitive Rivalry.
  • The purpose of performing a market analysis is to understand the attractiveness of a market, identify patterns, and predict future events. David Aaker outlined the following dimensions of a market analysis: Market Size, Market Trends, Market Growth Rate and Profitability, Industry Cost Structure, Distribution Channels, and Key Success Factors.
  • Marketing research is conducted when the available information is not sufficient for understanding the external factors that can impact a company. Interviews, group discussions, and survey questionnaires are the primary ways to collect information for any research.
  • PESTEL Analysis is used to analyze Political, Economic, Social, Technological, Environmental, and Legal factors. It is an effective tool to measure the overall business environment of a market.

Analyzing opportunities and threats that are native to a particular market is an obligatory task for every organization. Success comes from strategies that take advantage of important opportunities and avert threats.