IINSTITUTE OF MANAGEMENT SCIENCESMARKETING STRATEGY

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PAK - AIMS

Contents1 ] INTRODUCTION..................................................................................................................42 ] A SITUATION ANALYSIS......................................................................................................4

The Macro Environment.......................................................................................................5DEEP-LIST analysis...........................................................................................................5

An Industry Analysis............................................................................................................5Mission/Goals & Objectives..................................................................................................6Segmentation & Target Market............................................................................................6Marketing Mix......................................................................................................................7PLC/CLC/ILC.........................................................................................................................7Portfolio Analysis.................................................................................................................8KSF...................................................................................................................................... 8USP...................................................................................................................................... 8Market Analysis...................................................................................................................9

Market Share:...................................................................................................................9Sales:...............................................................................................................................9Growth Rates:..................................................................................................................9Competitive Analysis........................................................................................................9Product Attribute Analysis..............................................................................................10

SWOT ANALYSIS.................................................................................................................10Ansoff Matrix......................................................................................................................11

Ansoff’s Product-Market Expansion Grid.........................................................................12Financial Analysis..............................................................................................................12

Market Share..................................................................................................................12Sales Analysis.................................................................................................................12Ratio Analysis.................................................................................................................12Common Ratios..............................................................................................................13Analysis of Financial Statements....................................................................................13Example: Income Statement..........................................................................................14Break Even Analysis.......................................................................................................14Computing Break Even...................................................................................................15Break Even Point............................................................................................................15Formula For Calculating BEP IN UNITS............................................................................15

Break Even Point in Dollars............................................................................................15Break Even Plus Profits...................................................................................................16Break Even plus Profits...................................................................................................16

Over All Work Sheet...........................................................................................................163 ] Problem Identification......................................................................................................17

IDENTIFICATION OF MAIN PROBLEM...................................................................................17IDENTIFICATION OF SUB PROBLEM....................................................................................17

4 ] Alternatives to the Main Problem.....................................................................................175 ] EVALUATION OF EACH ALTERNATIVE...............................................................................186 ] Selection of Best Alternative............................................................................................187 ] IMPLEMENTATION.............................................................................................................188 ] RECOMMENDATION/S.......................................................................................................18

1 ] INTRODUCTION In the introduction you will give a short synopsis of the case. Inform the reader what industry does the company belongs, what the time of the

case, who are the key players, what issue is at hand. Remember not to reveal any hard facts in the introduction part as they have to be

utilized in the upcoming steps. Usually an introduction would include the following: Time of case Industry of operations Time of establishment of company Key People Important dates if any in the case Size of company Main Line of business of the company. Geographic Area (e.g. Region, Country or City in which operations are being held) Others Remember: NO HARD FACTS.

2 ] A SITUATION ANALYSISElements of Situational Analysis

Macro Environmental Analysis DEEP-LIST Analysis

Industry Analysis Mission Goal Objectives Segment and Target Market Marketing Mix PLC/CLC/ILC Portfolio Analysis KSF’s USP’s Market Analysis

Market Share Sales Growth Rates

SWOT analysis Ansoff Matrix Competitive Analysis Financial Analysis Strategic Analysis

The Macro Environment

DEEP-LIST analysis

Demographic Ecological Economic Political Legal Informational Social Technological

Give the factors of the above that affect the case only

An Industry Analysis

Solutions From Porter’s 5 Forces Model.

By analyzing this model you will have to identify either a industry is Attractive Unattractive Moderate.

Remember these Five forces can have the following effects. Either a force e.g.

Bargaining power of suppliers can be HIGHER OR LOWER. If it is Higher, then it is NEGATIVE FOR THE COMPANY. If it is LOWER, then it is POSITEVE FOR THE COMPANY.

So a force that is Negative A Force that is Positive for the company. A Force can also have a Moderate (~) effect

Analysis Continued. You will evaluate these five forces and see how many are positive, Negative or

Moderate. Then At the end, you will after looking at the positive and negative forces,

give conclusion about the ATTRACTIVENESS OF THE INDUSTRY. Remember that an unattractive industry does not means that profitability will also be

Negative. A company can make profits even in an unattractive industry and vise versa.

e.g. Nishat Mills is making a profit, although the Textile industry of Pakistan is UNATTRACTIVE.

Analysis Continued. You will evaluate these five forces and see how many are positive, Negative or

Moderate. Then At the end, you will after looking at the positive and negative forces,

give conclusion about the ATTRACTIVENESS OF THE INDUSTRY. Remember that an unattractive industry does not means that profitability will also be

Negative. A company can make profits even in an unattractive industry and vise versa.

e.g. Nishat Mills is making a profit, although the Textile industry of Pakistan is UNATTRACTIVE.

Mission/Goals & Objectives

Find any explicit or implicit statement of the firms mission. Goals and Objectives:

Look for the expressed or implied goals and objectives of the firm The importance of this is that after your analysis you can have a good picture

of either the company is really achieving/following its mission/goals and objectives or not.

Segmentation & Target Market

Segments Dealing in: Demographics Geographic

Industry Competitors

Internal Rivalry

Bargaining Power Of Suppliers

Bargaining Power Of

Buyer

Threat Of New

Entrants

Threat Of Substitutes

Psychographics Media Graphics

Define the appropriate Target market that the firm seeks to pursue. Customer Profiling

Marketing Mix

Here you have to give details of the Marketing Mix. Use the 7 P’s Model.

The 4 Hard P’s The 3 Soft P’s are:

People Processes Physical Evidence

PLC/CLC/ILC

ILC: Industry Life Cycle CLC: Company Life Cycle PLC: Product Life Cycle

Portfolio Analysis

The BCG Matrix Though this is a portfolio analysis that is meant to analyze different

businesses in the entire portfolio, but we will use this model for our product analysis.

Identify where the Product/ Products of the company fall in this matrix.

KSF

This part will identify the KSF’s of the business or in other words the KEY SUCCESS FACTORS

KSF’s are thing that are important while operating in an industry. Remember you have to list the factors for the industry and NOT the internal company factors.

These are the Key Factors for Success for any business operations in an INDUSTRY.

USP

The Unique Selling Preposition helps identify the main differentiation upon which the company is banking upon.

The USP’s have to be identified so that the Positioning strategy of the company can be analyzed.

Market Analysis

Market Share:

Look at Quantitative or Qualitative information that describes the past and current market Share position

Sales:

Sales Growth rates or Sales figures will be plugged here. This will help you to analyze the next point.

Growth Rates:

You will analyze the TRENDS in the patterns of Growth or Decline of the above two factors.

Competitive Analysis

Here you can analyze the Share Analysis of different competitors or the Product Attribute Analysis

Competitive Analysis

Market Share, Mind Share, and Heart Share

Market Share Mind Share Heart Share

2000 2001 2002 2000 2001 2002 2000 2001 2002Competitor A 50% 47% 44% 60% 58% 54% 45% 42% 39%Competitor B 30 34 37 30 31 35 44 47 53Competitor C 20 19 19 10 11 11 11 11 8

Product Attribute Analysis

Competitor A.

Attribute Importance( L/M/H )

Rating(1-5)

Impact

Price

Quality

Features

Benefits

Style

Overall Rating:

Remarks:

SWOT ANALYSIS

Here look at the strengths/weaknesses/opportunities/threats Remember

Opportunities and Threats are External Strengths and Weaknesses are Internal.

THE SWOT MATRIX

Quantitative Assessment of Elements within the SWOT Matrix

Ansoff Matrix

Ansoff’s Product-Market Expansion Grid

Financial Analysis.

Financial Analysis includes analysis like Market Share Sales Analysis and Trends. Ratio Analysis Break Even Analysis Analysis of Financial Statements

Market Share

Previously you have computed the Market Share of the Firm and also in the competitive analysis the Shares of competitors

Now you have to give a comparative situation by merging the both the previously done analysis.

Use a Tabular form to do this.

Sales Analysis

Here you can use Tables or Graphs to present the sales analysis of the company and its competitors or substitutes.

Be Creative over here

Ratio Analysis

Financial Ratios determine the relationship between two variables, and with the help of company ratios and industry ratios we can undergo a comparative analysis for the operating of our firms.

Common Ratios

Ratio Formula

Current Ratio Current AssetsCurrent Liabilities

Acid Test Ration or Quick Ratio

Current Assets- InventoryCurrent Liabilities

Inventory Turn Over Cost of Goods SoldAverage Inventory

Total Asset UtilizationROA

Net SalesTotal Assets

Profit Margin On Sales EBITSales

ROI EATTotal Assets

ROE Net Income Shareholders Equity

Analysis of Financial Statements

Most commonly three statements are analyzed: Balance Sheet Income statement Cash Flow Statement

Example: Income Statement.

Sales 3,600

Cost of goods sold 2,700

Gross Profit 900Less operating expense:

Selling expenses 40

General & Administrative 60 100

Gross Operating revenue 800

Less Depreciation 250

Net operating income 550

Less other expenses 50

EBIT 500

Less Interest expenses 200

Earning Before Tax 300

Less federal and state income tax (40%) 120

Earnings After Taxes (EAT) 180

Break Even Analysis

Break even point is that level of sales in either units or sales dollars at which a firm covers all the costs of investing in a project.

It is the level at which total sales revenue just equals the total costs necessary to achieve these sales.

Computing Break Even

Three values are required to calculate the BEP. Selling price per unit Level of Fixed Cost (TFC) Variable cost per unit produced (VC)

Break Even Point.

Formula For Calculating BEP IN UNITS

Fixed CostsContribution Margin

FCSP-VC

Break Even Point in Dollars

FC1 – VC SP

Break Even Plus Profits.

FC + ProfitSP- VC

In terms of Sales Dollars

Break Even plus Profits.

FC + P1 – VC SP

Over All Work Sheet

Environment Relevant Issues

Case Impact(Favorable/Un fav)

Case ImportanceImp/ Un imp

General EnvtSocial ___________ ____________ ____________Economic ___________ ____________ ____________Political ___________ ____________ ____________Legal ___________ ____________ ____________Technological ___________ ____________ ____________

Operating EnvtInternational ___________ ____________ ____________Suppliers ___________ ____________ ____________Competition ___________ ____________ ____________Customers ___________ ____________ ____________Labor ___________ ____________ ____________

Internal EnvtOrganizational ___________ ____________ ____________Marketing ___________ ____________ ____________Financial ___________ ____________ ____________Personnel ___________ ____________ ____________Production. ___________ ____________ ____________

3 ] Problem IdentificationIDENTIFICATION OF MAIN PROBLEM

Remember to distinguish the Symptoms from the problem! Problems are identified in terms of

Time Impact.

i.e. if the time to solve the problem is less, and if not solved the impact will be very high, it is the Main Problem

IDENTIFICATION OF SUB PROBLEM

Sub Problems have to be identified, so you will only list them over here. The treatment to the sub problems will be dealt at the last stage of case analysis. List a maximum of three (3) sub problems over here.

4 ] Alternatives to the Main Problem Give at least three (3) viable alternatives over here that can solve the main problem These alternatives can also be your strategies that you wish to implement.

5 ] EVALUATION OF EACH ALTERNATIVE Here you have to evaluate each individual alternative separately. You will look at the Cost and Benefits of each alternative, or in other words

the Pro’s and Con’s. To do this you will use the following Table.

Alternative #1: ____________________

Pro’s Con’s

Analyze & Record the Problems & Core Element.

Major Problem Or IssueDescription f Problem or Issue:

Evidence that this is a major problem:Facts:Symbols or other effects:Opinions:Assumptions:

1. .2. .3. .

4. .5. .6. .

6 ] Selection of Best Alternative This is the solution to your problem. Here you will after having performed an analysis on all the alternatives, select one

alternative that: Has more Pro’s then Con’s Solves the problem completely Is your final Solution for the case

7 ] IMPLEMENTATION Implementation means to bring the best suited alternative to the practical form. Here you will give details in how will you implement the alternative. Basically you will answer the following:

What to do? When to do it? How to do it? Who will be responsible for the implementation? Costs (if you can give the implementation costs)?

8 ] RECOMMENDATION/S These usually help or rectify all the sub problems that you have solved. Recommendations can be given in bullet form or they can be given in

paragraph form as well. You might want to give recommendations to each of the sub problems that

the company is facing.