Marketing - crises and problems Essay Example | Topics and Well Written Essays - 2500 words

Marketing - crises and problems - Essay Example These factors, which may be supportive or constraining to the future development of the organization, provide the backcloth' against which the future strategies and plans must be formulated (Bennet, 1996). The model analyses the environment into four areas of focus. It should be used flexibly to reflect the nature of the relevant country/market environment. This means that for a large corporate, with a significant spread of operations, it is appropriate to separately map the different environments in which the various parts of the organization operate (Howe, 1986). The facts are normally identified by the senior management of the business from their personal knowledge and experience. Naturally this assumes that they have sufficient background in the environment to generate accurate data. If this experience does not exist external information sources would need to be used to supplement the existing knowledge of the business (Aaltonen and Ikavalko 2002). Even where knowledge is strong' it is prudent to validate key facts/assumptions and to compare alternative views of the future. The analysis should be used to identify: The issues that are dominant and are likely to exert the most pressure or influence on the future direction and prospects of the corporate. This is often achieved by using H/M/L (High/Medium/Low) categorization of each factor. Five Forces Model Industry mapping is a model that enables the competitive environment in which the organization operates to be analyzed. It was developed by Michael Porter and is often referred to as the Porter 5 Forces' model. It helps to identify the strength of the competitive forces that impact on the industry (Kotler and Armstrong 2005). Environmental Mapping' examined more generally the wider commercial context affecting all industries, this approach is focused on the specific industry in which the organization operates. Competition among existing firms - this is the natural competitive rivalry which exists between the various businesses operating within the industry marketplace (Bennet, 1996). Threat of new entrants - this is the potential likelihood of, and ease of, entry for new firms into the market. An example would be the entry of Japanese contractors into the UK construction market. Threat of substitute products or services - this is where a product or service, perhaps produced through a different technology, enters the market. An example would be the entry of compact discs into the audiotape/record market - providing the same product, music', through a different technology. Bargaining power of suppliers - this examines the relationship between businesses in the industry and the suppliers to those businesses. Where suppliers have a unique or restricted availability product they can exert a strong influence over prices and conditions of supply, therefore potentially putting pressures on the businesses purchasing their product/services. Bargaining power of buyers - this examines the relationship between businesses in the industry and the customers of those businesses. The purpose is to identify the relative strength of the business in the customer relationship (Bowman 1998; Porter, 1980, Appendix