Cruise and Sales Managements

1908 Words Jul 21st, 2012 8 Pages
Marketing Strategy – Chapter 5 – Strategic Position Assessment

Strategic position assessment: provides the basic information about the sources of value in the business and the drivers that create value in the business. The SPA should be done at two levels: The corporate level should focus on the value potential of the company’s portfolio of businesses. The unit level should focus on the value and drivers of the individual markets and products. Each business is assigned one for the five strategic objectives: 1. Divest: closed or sold 2. Harvest: capable of generating healthy CF with limited growth opps. 3. Maintain: mature markets with acceptable share and further share-building activities do not generate a (+) NPV.
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Market attractiveness: defined as a market where the average competitor consistently earns a return above its cost of capital a. The most important factors determining the attractiveness of the market are: i. Size of the market: big markets offer firms more opportunity to grow. ii. Market growth: it is easier to grow if the market in which the firm is operates in also growing iii. Competitive structure of the market: the five elements are 1. Intensity of direct competition characterized by excess production capacity, standardized products or services, many competitors, low growth 2. Buyer power: buying pressure is a function of price sensitivity and negotiating power 3. Threat of new entry: major barrier to entry are patents, economies of scale, high capital requirements, strong brands, threat of retaliation, access to distribution channels 4. Threat from substitutes: types of substitutes are alternate products, new products, elimination of need, generic substitution, abstinence 5. Power of suppliers: supplier power is likely to be high when few suppliers are available, suppliers have unique products or strongly differentiated brands, switching costs are high, suppliers can threaten to integrate forward, large number of small customers with weak negotiation power. iv. Cyclicality of the
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