Professor Patrick Mc Namee

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Analysing the Environment

• Professor Patrick Mc Namee

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External analysis

• Whats happening in the outside world?
• What can we not control?
• What would squash us?
• What unbelievable opportunities are there?
• How to go about it?

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A shocking change for CTNs

• 1989
• Forecourt stores
• 637

• 1989
• Forecourt stores
• 4,365

• Change
• 585

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Analyzing the Environment today and tomorrow

• Opinions
• versus
• Figures

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Peter Drucker in 1979

• As a result of demographics, the Soviet union
  thus faces internal problems for which communism
  has no answers. It will have to retrench either
  industrially or militarily, or it will have to
  reform the collective farm, which can hardly be
  done without political convulsion. It cannot
  escape the rising tensions between the population
  of a developed European Russia and the
  fast-growing populations of a developing Asian
  Russia. Within the next twenty five years the
  Soviet Union will be faced by the same kind of
  racial, ethnic religious and cultural tensions
  that have split asunder all other
  nineteenth-century empires since World War II.

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Forecasting

• Generic rules for superior leadership
• A error of 1 error in forecasting inflation is
  strategically irrelevant
• An error in forecasting the result of the Iraq
  situation may be disastrous

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Key environmental influences on particular
industries

• Industry Major
  Envir Issue
• Banking Economy - bad debts
• Personal computers Technology
• Defence Government
• European agric EU policies
• Lux consumer goods Disposable income
• Oil Political stability
• Branded drinks Promotion
• Alcohol Promotion
• Sugar Climate

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A three stage analysis

• Stage 1 Segment
• Stage 2 Analyse segment discussion
• Stage 3 Figures

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Actual segments

• Market niches - best and worst
• Customers - best and worst
• Competitors - what are they doing/intending?
• Industry competition - how awful?
• Technology - incremental or dramatic?
• Government - actions and intentions
• Economy - expectations
• International influences - what ?

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Distinctions
Industry
Market
Segment
Niche
Very cheap saloon Standard saloon Luxury
saloon High speed saloon Sports
car 4X4 People carrier
Sales Of Autos

• Output
• Of
• Autos

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Market niche analysis

• An opportunity to exploit change as
• Niches
• And
• Customer needs
• mutate

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Market niche analysis

• The best niches are those which are most likely
  to provide sustained superior returns
• Most likely
• Sustained
• Superior

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Superior niches

• Materiality
• Niche trends life cycle and growth rate
• Degree of Competition
• Scope for strategic manoeuvre
• Sales from niche
• Market share and RMS
• Profit from niche

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Analysing customers

• Who are the most important customer groups?
• Which customer groups are growing?
• Which new customers are coming along?
• What will our customers do in the future?
• How should we make our customer offer unique and
  non-replicable?
• Are there any customer groups we should forget
  about?

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Customers

• The best customers are those which are most
  likely to provide sustained superior returns
• Most likely
• Sustained
• Superior

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Distinctions
Industry
Market
Segment
Niche
Very cheap saloon Standard saloon Luxury
saloon High speed saloon Sports
car 4X4 People carrier
Sales Of Autos

• Output
• Of
• Autos

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Market niche analysis

• An opportunity to exploit change as
• Niches
• And
• Customer needs
• mutate

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Superior customers

• Size scale/scope/wealth
• Who is main person past behaviour guide to
  future
• How much do we sell to each customer?
• What is our customer strategy?
• What is our relationship?
• New customers of the future?

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Economic segment

• National economy
• Greater regional economy
• Global economy

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Economic segment

• World economy
• Inflation and interest rates
• GNP
• Current accounts
• Employment
• Oil price

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Economic segment

• Oil price
• World economy
• Inflation
• GNP
• Current accounts
• Employment
• Interest rates

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The technological segment

• Magnitude
• Industry position
• Rule maker - Baron
• Rule taker - Serf
• Rule breaker - Revolutionary

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Process of technological change

• Introduction
• Brand new market niches/customers
• Pioneers and early adopters
• Followers and later adopters
• Dinosaurs

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Government/Legal1. As an aid

• Buyer
• RD sustainer
• Protection
• Wage control
• Training
• Start up
• New opportunities

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Government/Legal2. As an impediment

• Web of regulation
• Consumer/employee rights
• Price control
• Environmental protection
• Monopoly
• Location
• A cost

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Government/legal

• National
• Greater regional
• Global

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Geographical Segment

• Globalization
• Products
• Markets
• Services
• Brands
• Production
• Financing
• Internet