1. Strategic Marketing, 3rd edition
Chapter 3: Environmental and internal analysis: market information and intelligence

2. Structure A. INTRODUCTION 1. Overview and Strategy Blueprint
2. Marketing Strategy: Analysis &
Perspectives
B. WHERE ARE WE NOW?
3. Environmental & Internal Analysis:
Market Information & Intelligence
C. WHERE DO WE WANT TO BE?
4. Strategic Marketing Decisions,
Choices & Mistakes
5. Segmentation, Targeting
& Positioning Strategies
6. Branding Strategies
7. Relational & Sustainability
Strategies
E. DID WE GET THERE?
14. Strategy Implementation, Control
& Metrics
D. HOW WILL WE GET THERE?
8. Product Innovation & Development
Strategies
9. Service Marketing Strategies
10. Pricing & Distribution Strategies
11. Marketing Communications Strategies
12. International Marketing Strategies
13. Social and Ethical Strategies

3. Learning Objectives
To review the three areas of the Strategic Marketing Management Process (SMM)
To define the marketing environment and its components
To review the analytical models/frameworks that can be used in the external strategic analysis stage
To outline the purpose of internal analysis and review tools/frameworks to use in organisational analysis
To outline the outcome of the strategic marketing analysis

4. Strategic analysis is concerned with understanding the strategic position of the organisation in terms of its external environment, internal resources and competencies, and the expectations and influence of stakeholders

5. Strategic marketing management
The marketing strategy development process aims to answer a complete set of questions:
Where are we now?
Where we want to be?
How will we get there?
Did we get there?

6. Where are we now? Environmental and Internal Analysis
What are the major trends and probable changes in the marketing environment?
Who are the main competitors, and how we can differentiate our offerings from competition?
Who are the target customers, and what are their needs?
What competitive advantages and core competences do the organisation have? Can we sustain it?

7. The marketing environment
Company
Microenvironment
Suppliers
Customers
Distributors
Competitors
Macroenvironment
Political/Legal
Environment
Technological
Social
Economic

8. Macro (remote) environment: PESTLE model
Political Factors
Economic Factors
Socio-cultural Factors
Technological Factors
Legal Factors
Environment Factors
A framework that assists in analyzing the external (remote)
environment and identifying the existing opportunities & threats

9. Micro (competitive) environment: 5 forces model
The purpose:
Identify and analyse the key external forces that affect the organisation ability in achieving its goals and objectives
Assess the power of each factor and the likely response

10. Porter’s five forces for competitive analysis
POTENTIAL ENTRANTS
Threat of entrants
Competitive
Rivalry
BUYERS
SUPPLIERS
Bargaining power
Bargaining power
Threat of substitutes
SUBSTITUTES

11. Analysis of internal environment
The Purpose:
Appraise/audit the organisation resources and capabilities,
Assess the organisation competitive advantages
Identify the organisation major strengths and weakness

12. Analysis of internal environment
Two models to use:
Resource audit
financial resources,
human resources,
physical resources,
intangible resources
Porter’s Value Chain Model:
Help analysing Firm’s Competitive Advantage and Core Competencies

13. Value chain analysis: Identifying Competitive Advantage
Competitive advantage will arise through:
Providing buyer value comparable to competitors but performing value chain activities more efficiently – cost based advantage
and / or
Performing value chain activities in unique ways that create greater buyer value than competitors and hence command a premium price – differentiation based advantage

14. Strategic fit
‘Strategic Fit’ is the effective match and management of the environmental opportunities and threats while taking into account the organisation strengths and weaknesses

15. SWOT analysis
Integrates the internal and external environmental analysis
Not just a list of SWOT variables!
SWOT/TOWS Matrix can be helpful
SWOT/TOWS analysis is the alternative ways in which an organisation can use its specific strengths to capitalise on opportunities or to minimise threats and invest in available opportunities to overcome its weaknesses

16. SWOT (TOWS) matrix

17. Conclusion
Strategic marketing management (SMM) process covers 3 areas; strategic analysis, strategic choice and strategy implementation
Strategic analysis involves the collection and analysis of relevant types of information about the environmental forces and trends, and organisational resources and capabilities
External (macro) environment can be analysed using PESTLE model, while the micro environment could be examined using Porter Five forces model. The internal environment can be assessed using various models, most notably is the ‘value chain’ approach
The effectiveness of any marketing intelligence system is dependent on the frequency of collecting, interpreting, and disseminating the information required about the marketing environment & competition
SWOT analysis is an important foundation for producing realistic and meaningful strategic recommendations for the firm’s future directions