Marketing Analysis Tools for Business
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Todays world all businesses around the world become intense competition. Companies have to find their own strongest strategies by using effective marketing tools in order to survive in the business competition. By doing that, there are many marketing tools such as SWOT analysis, PEST analysis, BCG matrix, 4P s, Porter's five forces, etc. The main purpose of using these is to help the companies create and enhance their strategies so that their business performance will be improved. On this assessment, it will illustrate SWOT analysis and PEST analysis which give an understanding how they work through the business companies.
To begin with SWOT analysis, it is one of the most important marketing tools that is used for analysing the business situations and strategic plannings. It is also useful for determining the new strategies by analysing the internal and external factors (Bartolomei, 2010). This strategy is beneficial for various organisations or businesses. Besides, SWOT analysis is divided into two categories which are examining on the both internal and external factors. Internal factors consist of strengths (S) and weaknesses (W), while external factors comprise opportunities (O) and threats (T) (Novicevic, Harvey, Autry and Bond lll, 2004). Thus, SWOT analysis plays a crucial key in the companies strategies to succeed. There are many examples that support conducting SWOT analysis with the companies.
To begin with the first example, Zahorsky (n.d.) claimed that there are plenty of businesses have capability to aware of their inner-performance while the outer-performance are not well enough. Hence, SWOT analysis is very useful for them to examine their companies especially for small businesses. In addition, it is effective to look for the companies growth, comprehend their structure, and improve the competitive marketing and advertising.
The second example is Vanichakul (2004), who is the lecturer in Thailand's university, explained that SWOT analysis could be used to create the strategic planning and analyse the current situation in order that the organisations would minimise the weaknesses and threats whereas they would maximise the strengths and opportunities. However, he also gave an example that in Thailand the majority of organisations especially schools and universities applied SWOT analysis to not only create their new strategic planning but also determine their performance so as to improve their organisations consecutively.
The third example is about Mcdonalds case study (The Time 100, 2009). It was discussed about SWOT analysis which could be used for multiplying the opportunities in strategic business marketing because of the different demands of each customer. Another thing, of which the companies should do, was the regular customers record. Furthermore, the strengths and weaknesses of Mcdonald were referred to brand loyalty, serving time, tastes, convenient food and the quality of food. While the opportunities and threats were referred to its competitors, target groups, menu and facilities.
The fourth example is Tasmeen (2009) provided the case study of Ford by conducting SWOT analysis and considering the internal and external environment factors which influenced on Ford s performance. Additionally, the Interpublic Group of Companies was scrutinised the structure, procedures, histories and products by using SWOT analysis so as to enhance its strategic plannings (Aarkstore, 2010). Moreover, The Ashley Furniture Industries was also examined by SWOT analysis. Following this, the result of it included the history, employees, main competitors, essential product and services (Companiesandmarkets, 2010).
However, there are several advantages and disadvantages for this marketing tool. Firstly, SWOT analysis is useful for businesses because of increasing the strengths of companies and reducing the weaknesses of companies. Furthermore, the analysis of opportunities and threats is to analyse the external factors, which the companies sometimes cannot control. From these reasons, SWOT analysis will enhance the image of companies and lead to the effective business performance. Secondly, SWOT analysis will help the companies to create new strategies. Due to a better business performance, the companies should aware of their weak points and build their own strong points so as to have their efficient future plans. It is certainly true that SWOT analysis is easy to adapt with a variety of situations such as selection, prioritizing important orders, facing to the unexpected problems, analysis the cause and effect of problems, generating the new project, enhancing the work effectiveness and creating the acquisition of knowledge. Besides, Bartolomei s article (2010) supported that the benefits of SWOT analysis are to provide and help the companies to forecast the causes and effects more explicitly.
On the other hand, there are some arguments that against the advantages. For instance, there are many misunderstanding of SWOT analysis which causes problems about the quality of information such as skills, experiences, and the researchers. Another example is SWOT analysis should be repeated doing intermittently in order to examine the changes of situations and factors. Moreover, people who take responsibility for SWOT analysis could not have the bias due to avoiding the distorted information. (Novicevic, Harvey, Autry and Bond III, 2004)
This part is going to discuss about PEST analysis, which is one of the marketing tools. Companies or organisations use this tool to analyse the external factors including political (P), economic (E), social (S) and technological (T) factors that are difficult to control. However, it also has impacts on the organisational or business performance. In addition, according to Haughey s thinking (n.d.), PEST analysis is the significant part of conducting a strategic planning of project. Firstly it will analyse political factors such as tax rate, labour laws, law enforcement, trade policy and charging fee as well as the certain situation of politics. Secondly, for economic factors, it will consider economic crisis, economic growth, interest rates, exchange rates, inflation and deflation. Thirdly, in term of social factors, it will pay attention to the social value, the social aspects, cultures, believes and medical cares, population growth, longer life period, unemployed rate, crime rate and safety. Finally, the last factor, which is about technologies, will illustrate conducting Research and Development (R&D), mechanization or industrialization, the development of technological motivations and the technological changes.
There is an example that conducting PEST analysis with a company, which is one of the tourism industries in the UK, namely Simply Travel. According to the article, PEST analysis was influenced on the customers needs (123HelpMe, 2011).
Another example is UNISON, which is the biggest public sector trade union in the UK, conducts PEST analysis in order to reach the demand of its staff and determination. Following the article, it is clearly revealed that the Migrant Workers Participation Project had a good impact on the alien employees outside Britain by using PEST analysis (The Times 100, 2010).
Nevertheless, there are many benefits if the companies use PEST analysis. For instance, the companies will be aware of the extensive firm s factors. Not only does it motivate the firms to improve their strategic planning, but the firms also are cautious their risks if they need to gain more profit as well. Besides, the companies will be indicated their opportunities so that they will enhance their effective performances.
Despite the fact that PEST analysis will help the companies to understand and create the up-to-date marketing strategic planning, it also has some limitations that affect its actions. For example, the dramatic change in the competitive market leads to the difficult companies situation in the future. Having a lot of information might be problem for finding the real useful information. Many people believe that PEST analysis uses for analysing the macro external environment and it is associated with others components such as their own companies, businesses and competitors (CMI, 2005).
To conclude, it is obviously true that every marketing tool has not only many advantages but also many disadvantages. However, it is better to use SWOT analysis simultaneously because PEST analysis can be shown only the external factors. Therefore, SWOT analysis will be covered the internal factors analysis. Additionally, there are some suggestions that the companies should use other tools such as PRIMO-F analysis, Porter's five forces in the same time (Morrison, 2010). Although, using both of PEST and SWOT analysis are beneficial, the companies should updated their information in order to avoid obsolete information. Consequently, the companies will be able to understand their performance, improve their strategic planning and compete with their other competitors.
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