Three Step Matrix in Strategic Marketing Essay
Three Step Matrix in Strategic Marketing
Strategic marketing comes into place to standardize the marketing practice, ultimately satisfying the customer needs through increasing company’s competitive advantages. The base of any corporate to develop the winning strategically needs close monitoring in the internal and external environment. There are many instances where some company failure due to not been able to monitor the market situation adequately but in other instance we also can see the growth of company due to innovation, diversification and became the market leader. So for well understood of the marketing behaviour we have to see their strategy. So to be the market leader or winning in the market place needs right decision at right time using right technology, which ultimately creates the Sustainable Competitive Advantage (SCA).
To be a sustainable winner the company have to invest in R&D function, have to study market environment, have to study the competitors, have to study the changes in strategic move of the industry, have to study the customers behaviour etc. For well understood of the market situation to take strategic movement there are many models implemented by different company. The Boston Consulting Group’s (BCG) four cell matrix, GE/McKinsey’s multifactor matrix, Robinson’s directional policy matrix, Sheth and Frazier’s financial model, Capron and glazer’s technology portfolio model are some of the models which have implemented for the assessment of market situation. However, the use of single matrix is not sufficient to know the true picture of the market situation. Therefore, Yin-Ching Jan has proposes a three-step matrix method for strategic marketing management.
Step 1: Industry Perspective Matrix
The industrial perspective matrix is basically using to see the external market environment, through which a company can find the opportunity and threats. From this matrix the company can assess the market and can classify as high opportunity – high threats (HOT MARKET), high Opportunity-Low Threats (NICHE MARKET), LOW Opportunity- High Threats (MERCHANDISE MARKET) and Low Opportunity-Low Threats (DEGENERATE MARKET). HOT Market means where many company compete each other to get advantaged from the high level of market opportunity, Products such as tablet PCs have huge opportunities but with the ease of new entry, it challenges major threats too.
Like as the NICHE market has a unique features that allow many competitors due to its high opportunity but less threats, many people come to market seeing the high level of opportunity, but after all when many people start coming it became a strong competition after all. In the degenerate there are low opportunities and threats but still have competition from the rivalry, real estate market these days’ falls into Degenerate market category as it has slumped hugely in the past few years. If company unable to invent new products, consumer will be lost. Noodles can fit into Merchandise market, where the opportunities are low and threats are high.
Competitive Position Matrix
The objectives of the competitive position matrix are to assess the strength and weakness of the company and find out the possible strategy. Basically ROA is the tool which gives the figures of the advantage which is used to set indicators. Also we also see the profit margin to see whether it is leading or not. So analysis of the ROA and profit margin gives insight for the competitive position matrix. There are four cell in the diagram which shows the status of the company based on CPM i.e. Leader, Nicher, Penetrator and follower. Higher the ROA and Profit margin is Market leader, Higher the ROA and lower the Profit is Penetrator, in this situation company basically low the price to expand the market share Low ROA and Low ROA is Follower and in this circumstances they are following the market leader and last but not least high Profit margin and Low ROA is stand for Nicher, where market opportunity is high and investment might be high so even though they have high rate of profit return but less as expected ROA.
Market Situation Matrix
Market situation matrix is a combination of industry matrix and competitive matrix. Analyzing it a manager can take a decision about the company. For example when a company is in hot market it has to invest more to increase its share in the market because many competitors are preparing to enter in that market. Like as in Nicher, there is need to expand the market aggressively and innovation is crucial to maintain its leadership position. Three step matrix: Nepali Product: Every year Television channels are increasing in Nepal and most of their market is the same and their strategy are the same. Some of the televisions are still under process of establishment. So here opportunity seems high and the threats is seems high as well so the market of TV Channel is now at HOT stage.
So as a growing market there are always uncertainties of the risk of failure. we can see some channel are out of the competition now, they are failure and some are still leading , but now no one can say that who is going to win the game. So this opportunity is leading many threats even though there is high opportunity, so in this regards one TV channel have to increase the investment to win the game. The leaders now is Kantipur TV , it has also get high returns , now NEWS 24, ATV , Mountain TV are following KTV, so it is the time to think innovatively to keep the high market share of KTV
University/College: University of Arkansas System
Type of paper: Thesis/Dissertation Chapter
Date: 20 October 2016
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