Page 29 - (DK) The Business Book

START SMALL, THINK BIG 27

The apparel market is a competitive
sector with a host of finely delineated
fashion brands. Speedo’s market
positioning is built around producing
high-performance, technical products.

based on such data, even though
managers may disagree, the market
map cannot be “wrong”—it simply
represents, for better or worse,
how the brand is perceived. The
challenge for management is to use
the map, and knowledge of internal
strengths and weaknesses, to plan
the appropriate strategic response.
Both SWOT analysis and market
mapping allow a company to better
understand itself, its market, and,
offerings, for example) and the Perceived as a technical most importantly, the competition.
tactics (moving from conservative performance product, Speedo, Equally, being aware of weaknesses
to sporty, for example) that will for example, needs to ensure that can help avoid costly strategic
help the company to achieve its marketing reflects that view; mistakes, such as producing overly
that strategic goal. a campaign that promotes Speedo ambitious products or making an
Market analysis such as this may, as a fashionable label would risk entry into a crowded market
for example, have helped luxury confusing customers and could position. An appreciation of the
Singaporean tea shop TWG Tea damage the brand. opportunities and threats of the
to identify an opportunity in the The key to successful market market, and the relative and
market. Launched in 2008, TWG mapping is market research. While shifting positions of competing
targets a slightly older, wealthier it can be useful to compare internal products, is essential to long-term
customer base than coffee shops and external perceptions of a successful strategic planning. To
and other “lifestyle” cafés. TWG product, and the products of the plan where you are going, it helps
has opened new locations across competition, it is the customers’ to know where you are—and where
the world, based on studying the views that matter most. When your competitors are too. ■
competition, identifying a market
gap, and designing its products Albert Humphrey leaders and politicians. He also
and services to fill that gap. undertook research to identify
Born in 1926, Albert Humphrey why corporate planning failed,
Internal focus was educated at the University by holding interviews with more
As a company grows it might of Illinois, US, and at the than 5,000 executives at over
choose to draw up a map including Massachusetts Institute of 1,100 companies. As a result of
just its own products. Analysis of Technology (MIT), where he the findings, he invented SOFT
the results can help identify any gained a master’s degree in analysis: “what is good in the
overlap between different products Chemical Engineering. He later present is Satisfactory, good in
(informing decisions about which went on to earn an MBA the future is an Opportunity; bad
products to drop, and which to from Harvard University. While in the present is a Fault, and bad
working with the Stanford in the future is a Threat.” Fault
concentrate research and
Research Institute (now SRI was later softened to the more
development and marketing spend,
International) between 1960 and acceptable Weaknesses, and
for example). It can also be used
1970, Humphrey came up with Satisfactory became Strengths.
to ensure that the company’s
the Stakeholder Concept, which The now-ubiquitous acronym
marketing message stays on track, has since been used by business SWOT was born.
helping to avoid strategic drift.