Part One
Strategic Analysis
© 2007 John Wiley & Sons
Copyright © 2007 John Wiley & Sons, Inc. All rights reserved. Reproduction or translation of this work beyond that permitted in
Section 117 of the 1976 United States Copyright Act without the express written permission of the copyright owner is unlawful.
Requests for further information should be addressed to the Permissions Department, John Wiley & Sons, Inc. The purchaser
may make back-up copies for his/her own use only and not for distribution or resale. The Publisher assumes no responsibility
for errors, omissions, or damages, caused by the use of these programs or from the use of the information contained herein.
Chapter 2 - External and Customer Analysis PPT 2-1
Chapter Two
External and Customer Analysis
© 2007 John Wiley & Sons
Chapter 2 - External and Customer Analysis PPT 2-2
The Role of External Analysis
StrategicDecisions
Strategic Decisions
•• Where
Whereto
tocompete
compete
External •• How
Howto
tocompete
compete
External
Analysis
Analysis
© 2007 John Wiley & Sons
Identification
Identification
•• Trends/future
Trends/futureevents
events Analysis
Analysis
•• Threats/opportunities
Threats/opportunities •• Information-need
Information-needareas
areas
•• Strategic
Strategicuncertainties
uncertainties •• Scenario
Scenarioanalysis
analysis
Chapter 2 - External and Customer Analysis Figure 3.1 PPT 2-3
Strategic Uncertainties
Strategic Uncertainties Strategic Decisions
• Will a major firm enter? • Investment in a product market
• Will a tofu-based dessert • Investment in a tofu-based product
product be accepted?
• Will a technology be • Investment in a technology
replaced?
• Will the dollar strengthen • Commitment to off-shore
against an off-shore manufacturing
© 2007 John Wiley & Sons
currency?
• Will computer-based
• Investment in a new system
operations be feasible with
current technology?
• How sensitive is the market • A strategy of maintaining price
to price? parity
Chapter 2 - External and Customer Analysis PPT 2-4
Strategic Uncertainties
••Performance
Performanceimprovements?
improvements?
What
What will
will the
the ••Competitive
Competitivetechnological
technological
developments?
future
future demand?
demand? developments?
••Financial
Financialcapacity
capacityof
ofhealth
healthcare
care
industry?
industry?
© 2007 John Wiley & Sons
Chapter 2 - External and Customer Analysis PPT 2-5
Customer Analysis
Segmentation
• Identification of customers groups that respond
differently from other groups to competitive offerings.
Thus, a successful segmentation strategy requires the
conceptualization, development, and evaluation of a
competitive offering.
© 2007 John Wiley & Sons
• Who are the biggest customers? The most profitable?
The most attractive potential customers?
Chapter 2 - External and Customer Analysis Figure 2.2 PPT 2-6
Examples of Approaches to
Defining Segments
Customer Characteristics
• Geographic
• Type of organization
• Size of firm
• Lifestyle
© 2007 John Wiley & Sons
• Sex
• Age
• Occupation
Chapter 2 - External and Customer Analysis Figure 2.3 PPT 2-7
Examples of Approaches to
Defining Segments
Product-Related Approaches
• User type
• Usage
• Benefits sought
• Price sensitivity
© 2007 John Wiley & Sons
• Competitor
• Application
• Brand loyalty
Chapter 2 - External and Customer Analysis Figure 2.3 PPT 2-8
Segmentation
How should segments be defined?
– Benefit Segmentation
– Price Sensitivity
– Loyalty
© 2007 John Wiley & Sons
– Applications
– Multiple Segments versus Focus Strategy
Chapter 2 - External and Customer Analysis PPT 2-9
The Loyalty Matrix: Priorities
Low
Low Moderate
Moderate Loyal
Loyal
Loyalty
Loyalty Loyalty
Loyalty
Customer Medium High Highest
Customer
© 2007 John Wiley & Sons
Low
Non-customer
Non-customer to High Zero
Medium
Chapter 2 - External and Customer Analysis Figure 3.4 PPT 2-10
Customer Analysis
Customer Motivations
• What elements of the product/service do customers value most?
• What are the customers’ objectives? What are they really buying?
• How do segments differ in their motivation priorities?
© 2007 John Wiley & Sons
• What changes are occurring in customer motivation? In customer
priorities?
Chapter 2 - External and Customer Analysis Figure 3.2 PPT 2-11
Customer Motivation Analysis
Identify
Identify
Motivations
Motivations
Group
Groupand
and
Structure
Structure
Motivations
Motivations
Assess
Assess
Motivation
Motivation
Importance
© 2007 John Wiley & Sons
Importance
Assign
AssignStrategic
Strategic
Roles
Rolesto
toMotivations
Motivations
Chapter 2 - External and Customer Analysis Figure 2.6 PPT 2-12
The Customer as Active Partner
• Encourage Active Dialogue
• Mobilize Customer Communities
• Manage Customer Diversity
• Co-creating Personalized Experiences
© 2007 John Wiley & Sons
Chapter 2 - External and Customer Analysis PPT 2-13
Customer Analysis
Unmet Needs
• Why are some customers dissatisfied? Why are some changing
brands or suppliers?
• What are the severity and incidence of consumer problems?
• What are the unmet needs that customers can identify? Are there
© 2007 John Wiley & Sons
some of which consumers are unaware?
• Do these unmet needs represent leverage points for competitors?
Chapter 2 - External and Customer Analysis Figure 2.2 PPT 2-14
Key Learnings
• External analysis should influence strategy by identifying opportunities,
threats, trends, and strategic uncertainties. The ultimate goal is to improve
strategic choices – decisions as to where and how to compete.
• Segmentation (identifying customer groups that can support different
competitive strategies) can be based on a variety of customer
characteristics, such as benefits sought, customer loyalty, and applications.
• Customer motivation analysis can provide insights into what assets and
© 2007 John Wiley & Sons
competencies are needed to compete, as well as indicate possible SCAs.
• Unmet needs that represent opportunities (or threats) can be identified by
projecting technologies, by accessing lead users, and by systematic
creative thinking.
Chapter 2 - External and Customer Analysis PPT 2-15
Ancillary Slides
© 2007 John Wiley & Sons
Chapter 2 - External and Customer Analysis PPT 2-17
“Chance favors the prepared mind.”
- Louis Pasteur
© 2007 John Wiley & Sons
Chapter 2 - External and Customer Analysis PPT 2-18
“Far better an approximate answer to
the right question, which is often
vague, than an exact answer to the
wrong question, which can always be
made precise.”
- John Tukey,
© 2007 John Wiley & Sons
Statistician
Chapter 2 - External and Customer Analysis PPT 2-19
“If you don’t know where you are
going, you might end up
somewhere else.”
- Casey Stengel
© 2007 John Wiley & Sons
Chapter 2 - External and Customer Analysis PPT 2-20
