There are a range of strategic planning techniques you can use to analyse a business, its environment, its products and services, threats and opportunities, and so on. They include:
PESTLE (PEST, PESTEL, PESTELE, STEEPLE)
Above source: ECMS
This analysis is usually the place to start. It identifies the current
- Ethical and
- Legislative factors
…impacting a business.
Once you have completed this, you can categorise the findings into opportunities or threats for your SWOT analysis.
- PEST is a shortened analysis that just looks at Political, Economic, Social and Technological factors.
- PESTELE (or STEEPLE) adds a further factor, Ethical. They are both the same thing with the letters rearranged.
- PESTLE and PESTEL are also interchangeable – the last two letters are just switched around.
Above source: Wordstream
A SWOT analysis looks at the Strengths, Weaknesses, Opportunities and Threats of a business.
This identifies the internal strengths and weaknesses of the organisation and the external opportunities and threats.
Internal analysis focuses on all aspects of resources and operations. Of prime importance will be areas such as product range, brand names, market share, relationships with customers.
External environmental analysis identifies the features and trends that create opportunities for, and threats to, the organisation – that is, the political/legal, economic, socio-cultural and technological aspects of the external environment, which also include ethics and the natural or ecological environment.
In addition to these macro-environmental factors there are a range of micro-environmental factors, including competitors, suppliers, distributors, the media and the general public.
Environmental analysis involves collecting information about the external environment, forecasting and anticipating change, identifying environmental opportunities and threats and assessing the impact of environmental factors on decision making and all aspects of marketing activities.
External analysis will identify potential constraints, challenges, opportunities and threats that are usually out of the control of the organisation. This analysis will help to create the potential to avoid threats and take advantage of opportunities. It will also identify features of the environment that should be monitored and forecast (Source: OUBS, ‘Managing Marketing’, 2011).
TOWS takes your SWOT analysis further.
Like a SWOT analysis, it focuses on the four areas: Strengths, Weaknesses, Opportunities and Threats.
However, it is not the same as a SWOT because the idea is to match up the Strengths with Opportunities and the Threats with Weaknesses.
Above source: Lucidity
The main purpose of a TOWS Analysis is to:
- Reduce threats
- Take advantage of opportunities
- Exploit strengths
- Remove weaknesses
A well thought out TOWS can not only provide you with detail of your SWOT, but also some data to make a decision about your overall direction (Source: Lucidity)
Above source: OUBS, ‘Managing Marketing’, 2011
Ansoff’s matrix identifies four broad classifications of strategies – market penetration, market development, product development and diversification. This remains a useful model for highlighting potential opportunities and strategic directions for an organisation, emphasising competitiveness, profitability (or achievement of other objectives) and the level of risk involved.
PORTER’S 5 FORCES
Above source: Business To You
Porter’s Five Forces is a framework for analysing a company’s competitive environment. Porter identified five undeniable forces that play a part in shaping every market and industry in the world, with some caveats. They are:
- Competition in the industry
- Potential of new entrants into the industry
- Power of suppliers
- Power of customers
- Threat of substitute products (Source: Investopedia)
THE FOUR Ps
Above source: Neil Patel
The four Ps of marketing are the key factors that are involved in the marketing of a good or service. They are the product, price, place, and promotion of a good or service. Often referred to as the marketing mix, the four Ps are constrained by internal and external factors in the overall business environment, and they interact significantly with one another (Source: Investopedia).
- Product – the core benefits and features that the consumer receives, including packaging, branding and additional services.
- Price – typically the money paid for the product. May also include other forms of exchange, such as barter (barter involves the exchange of goods and services for other goods and services).
- Place (or distribution) – the means by which the product is made available to the customer. This may be through intermediaries such as supermarkets or through direct delivery to the customer. Convenience is increasingly something that adds value for customers.
- Promotion – is the way in which the product and other elements of the marketing mix are communicated to customers through a range of media. This includes personal selling, advertising, publicity and sales
- Other elements – there have been a number of additions to the four Ps over time. In particular a fifth P of people is often included. This reflects the dominance of service organisations in many economies and the fact that employee attitudes and behaviours are a major cause of customer satisfaction/dissatisfaction for many marketing transactions (Source: OUBS, ‘Managing Marketing’, 2011)
A sixth and seventh ‘P’ can be added to make the 7 Cs –
- Physical evidence
This was the original model in fact, as devised by E. Jerome McCarthy and published in 1960 in his book Basic Marketing. A Managerial Approach.
Above: From Dave Chaffey’s book: Digital Marketing: Strategy, Implementation and Practice, on SmartInsights.com.
Yet another P, ‘Partners’ is often recommended for businesses to gain reach online (although some say that this should be a part of ‘Place’).
The 4 Cs
There are two models that may be referred to as the four Cs –
- The 4Cs to replace the 4Ps of the marketing mix: Consumer wants and needs (Product); Cost to satisfy (Price); Convenience to buy (Place) and Communication (Promotion) – Lauterborn, 1990
- The 4Cs for marketing communications: Clarity; Credibility; Consistency and Competitiveness – Jobber and Fahy, 2009
Often when you hear someone talk about the 4 Cs, it’s the first of the above two. You can analyse the 4 Cs like this:
Above source: SmartInsights.com
Above source: SmartInsights.com
You would expect this just to be an extension of the 4 Cs but it is not. It stands for:
The 5 Cs serves as a comprehensive check-up of all the key areas of your business and helps you adjust your strategy based on what’s working and what isn’t. You can see more of a break down of each area here.
Above source: OUBS, ‘Managing Marketing’, 2011
The PLC describes the life of a product in terms of its cash sales and profits as a series of stages. Usually this is shown as four major stages through which products move: introduction, growth, maturity and decline. It may also include the new product development phase prior to introduction.
Above adopted from Rothaermel’s (2013) ‘Strategic Management’, p.91 by StrategicManagementInsight.com
VRIO framework is the tool used to analyse firm’s internal resources and capabilities to find out if they can be a source of sustained competitive advantage.
VRIO analysis stands for four questions that ask if a resource is: valuable? rare? costly to imitate?
Above source: The Power MBA
A BCG analysis means using the Boston Consulting Group’s growth share matrix (commonly referred to as the BCG matrix). This is a business tool that reviews a company’s product portfolio or SBUs (strategic business units) to help them decide in what to invest, what to discontinue, and which products to develop further.
Products or services are grouped as stars, question marks, cows or dogs.
- Cash cows (low growth, high market share)
- Stars (high growth, high market share)
- Question marks (high growth, low market share)
- Dogs (low growth, low market share)
STP marketing model
Above source: Smart Insights
The STP marketing model stands for: Segmentation, Targeting, Positioning.
It is typically used to analyse and guide marketing communications. The goal of the model is to deliver more relevant messages to commercially appealing audiences. Click here for an example essay that includes STP analysis.