write about 2 business models and 2marketing strategies that its provided on the file. just need a short
introduction and 1000words per 1 model/strategy. Total around 4000 words.
Business models/Marketing strategy
Introduction
Marketing strategy is a plan aiming at a goal of increasing sales and having a comparative
advantage over the competitors. On the other hand, a business model is an actual representation
of an organization of all interrelated architectural and financial designed by a business institution
for both present and future guiding to reach a specific goal. Business models and marketing
strategies nowadays are becoming more and more important in any business field. They are
serving, as a core management discipline in the present world business is it in a financial or
accounting organization. The thesis of this essay is to find out what are the characteristics of a
good business model. It entails finding its importance in the field of business, the challenges that
are faced when coming up with a business model. In addition, the discussion will discuss the
diversified different types of marketing strategies. The importance of marketing strategies and
what difference they bring in an organization will also be given.
Discussion
- Business Models
1.1. SWOT Analysis
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SWOT analysis has been defined by Yean Ying, Min & To Phuong (2009, p. 1105) as a strategy
tool that is aimed at determining a company’s competitive advantaged. Ding-Hong, Tie-Dan &
Chang-Yuan (2014, p. 68) argue that SWOT analysis is a tool that is aimed at analyzing a
company’s strengths and opportunities against the threats and weaknesses. This tool is important
as it can help practitioners determine the best ways possible to assist their organization to
become competitive in the market. The motive behind this toll is to analyze a company’s
prospects with paying attention to the bigger picture in mind (Everett 2014, p.58). For this tool to
be certain effective information need to be acquired. This information ranges from internal to
external factors that affect the business either positively or negatively Milosevic (2010, p.78).
The internal information assists the practitioners to spot the strengths and weaknesses the firm
establishes in its operations. The external factors are critical to ensuring that a company analyzes
its threats and opportunities in the external environment.
Strengths are essentially factors that give a firm a competitive edge. Weaknesses, on the
other hand, are factors or elements that are harmful if certain competitors to use them against the
respective firm (Ying, Min & To Phuong 2009, p.1110). Opportunities are those favorable
situations that can bring competitive advantages. Lastly, threats are unfavorable circumstances
that tend to diminish the competitive advantage of a firm. The use of SWOT analysis best sits
when assessing the services provided by a project. In addition, the tool is indispensable to
determine the relationship between project stakeholders. In emphasis, the toll is indispensable in
digging dip a problem in a company. The tool is applicable in intense situations that require the
immediate solution to emerging issues. The emerging issues can include a drastic fall in profit
(Ying, Min & To Phuong (2009, p. 1109). The tool can also be used to determine where change
is possible. The effectiveness of the tool can be measured easily. The tool is effective if it clearly
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sports the strengths, weaknesses, opportunities, threats of a company. Furthermore, the
performance of the tool is measured by the extent at which the recommendations given by the
tool assist the organization to become competitive advantage (Ying, Min & To Phuong 2009,
p.1106). In simper terms, the performance of the tool is determined by the extent at which the
opportunities are exploited together will the strengths to outweigh the repercussions of threats
and weaknesses.
The SWOT analysis is characterized with strengths and limitations. One of the strengths
is that the tool is simple to perform. In addition, the tool has practicability (Everett 2014, p.79).
A practitioner will find that collecting external and internal factors as well as comparing them to
determine a firm’s competitive advantage is very simple. The other strength of the tool is that it
is simple to understand. Notably, it gives all the four dimension of a firm using understandable
format. Every factor is described individually (Ying, Min & To Phuong 2009, p.1115). It is being
observed that the SWOT analysis tool is indispensable when identifying future goals. The tool
assists practitioners to predict where the company will be in the future when it excels in
manipulating its strengths and opportunities to fight its weaknesses and threats. Another
observance pertinence of the tool is that it provides opportunities for further analysis. The tool
allows the use of other models such as Blue Ocean Strategy and PEST analysis.
However, the SWOT analysis is short to limitations. Many critics argue that the toll is
never serious. Its simplicity makes it a low-grade evaluation tool. One of its drawbacks is that it
is cumbersome to read through. This is since it has excessive lists of strengths, threats,
weaknesses, and opportunities. In addition, the tool is argued to have no prioritization of factors.
In this regard, the tool is said to give each factor an equal measure. This is not true as Everett
(2014, p.58) argue because some factors have more pressure on the firm than others. Another
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drawback of the tool is that it broadly describes its factors. This creates confusion in some cases.
Ying, Min & To Phuong (2009, p.1105) argue that mush of what it is given by the tool are just
opinions and not facts. Everett (2014, p.68) adds that a tool is a confusing tool since it lacks a
recognizable method to distinguish between strengths, opportunities, threats, and weaknesses.
One instance in which SWOT analysis was used effectively was when Teys Australia
was experiencing falling profits (Milosevic 2010, p.98). The top management carried a quick
analysis to determine what was affecting the organization despite that the company is one of the
biggest meat processing companies on the Australian land. The management got that its strengths
include a strong brand, efficient production methods, and accessibility to global markets. The
analysis also found that the firm had the weaknesses of vagaries of weather, animal disease
outbreaks, fluctuating on major world currencies (Ying, Min & To Phuong 2009, p.1125). On
top of that, the company found out that it had the opportunities to enjoy a larger market share in
Japan and Indonesia. However, it observed that the threats ranged from the growth of the poultry
industry, disease outbreaks, and climatic conditions. Therefore, it came to find that outbreak of
diseases and climatic conditions were the major cause if decreasing profits. Thus is devised to
use the government and its resources to do research to find cures for major cattle-related diseases
(Milosevic 2010, p.145). Currently, the company is one of the major exporters of beef to Japan,
Taiwan, and Indonesia. In conclusion, the SWOT analysis has fund four pillars of seizing and
maintaining competitive advantage (Everett 2014, p.78).
- Build on strengths
- Minimization of weaknesses
- Seizure of the opportunities
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- Counteract threats
1.2. PESTEL Analysis
The PESTEL model is the different version of the SWOT analysis. This is because it entirely
deals with external forces. The PEST analyzes the political, economic, technological, and social
factors in the external environment of a firm (Kader, Noor, Wilson & Mohammad 2014, p.67).
These external factors are known to affect the activities and performance of a firm. The model
engages in collecting and portraying information that deals with external factors which affect or
might have affected the firm. The importance of this model is that it needs a firm to create both
opportunities and threats for an organization. The practitioners need to know the instances when
to use the tool (Gregorić 2014, p.562). These situations are best favorable when finding the
current external factors that influence the organization.
The analysis is also applicable to identify external factors that may alter in the future. The
other instance when the model is applicable is when the company wants to manipulate changes
(opportunities) to shield against them (threats) better than competitors would do (Kader, Noor,
Wilson & Mohammad 2014, p.68). The idea behind the analysis is that if a project is better
placed than that of competitors, the company will be able to respond to changes more effectively.
The political aspects can include both internal and external factors. The internal factors deals
refer to those political aspects that are within the firm such as personal interest in the
implementation of the projects. The eternal political factors include those factors that a firm
cannot control such as governmental regulations. The economic factors include the macro and
micro-economic events that relate to the function of an organization. The internal
microenvironment engages in verifying the viability of an activity in the organization
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developments (Zalengera, Blanchard, Eames, Juma, Chitawo & Gondwe 2014, p.316). The
macro-economic include the unavoidable government taxes, inflation, and unemployment. The
sociological factor includes taking into consideration all events that affect the market and
community socially. Technological factors involve taking into considerations all issues that
affect the technology of the firm.
The performance of the PEST analysis can be evaluated by observing the extent at which a firm
responds to the external factors (Kader, Noor, Wilson & Mohammad 2014, p.70). For instance, it
assists a firm to product development. Carrying out a proper appraisal of the external factors, a
firm can balance the outcome of each to see if it will unleash the product to the market. The other
dimension in measuring the performance of the PEST analysis is by looking how an
organizational change has been experienced developments (Zalengera, Blanchard, Eames, Juma,
Chitawo & Gondwe 2014, p.326). For instance, when a firm wants to change one function of the
department, the tool can be very helpful in identifying the hidden aspects that SWOT analysis,
for instance, cannot find.
However, there are certain limitations and advantages associated with the PEST analysis.
One of the advantages is that the tool is important it encourages the development of strategic
thinking (Kader, Noor, Wilson & Mohammad 2014, p.72). It enables the concerned parties to
think strategically on how to deal with a project. The other advantage is that it may raise
awareness of the potential threats to a project. It also assists an organization to identify
opportunities. Not only does the tool enable the form to identify opportunities, but it also assists
the organization to exploit the opportunities (Zalengera, Blanchard, Eames, Juma, Chitawo &
Gondwe 2014, p.346). In emphasis, it assists an organization to anticipate future difficulties to
take actions on how to avoid or minimize them. Notably, one of the disadvantages is that the tool
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is entirely external. It only deals with external factors. It ignores the place of internal factors such
as the place of the employee in the production line. The other limitation of the model is that it
requires constant updating for it to remain relevant. The other observable feature of the model is
that is based on assumptions. Much of what it says cannot be verified. Most of the
recommendations given by the tool are rigid. It, therefore, becomes a problem for the projects of
a firm to anticipate developments (Zalengera, Blanchard, Eames, Juma, Chitawo & Gondwe
2014, p.336). This is as far as the business environment is ever changing. The last noted
disadvantage of the tool is that it allows its users to over-simplify the information that is used.
Therefore, it creates the possibility of missing the most important data.
The use of the PEST analytical tool assisted a firm to a scenario. The tool was used by Wal-
Mart Australia to identify its potential threats for the external environments (Kader, Noor,
Wilson & Mohammad 2014, p.72). The supermarket observed that political factors such as heavy
taxation and currency fluctuations. The supermarket also found that economic facts such as high
inflation rate and higher consumer debt in Australia made to unable to diversify its operations
(Zalengera, Blanchard, Eames, Juma, Chitawo & Gondwe 2014, p.366). In addition, the
company realized that social factors such as an emphasis on safety by the Australians made it
unable to unleash new products due to fear of rejection. The technological factor that Wal-Mart
assessed was that ecological factors such as sustainability made to lose its role on sustainability.
With that information in mind, Wal-Mart was able to differentiate the existing products
(rebranding) to attract customer attraction (social factor) to make sales to counter heavy
government taxes (political) (Shilei & Yong 2009, p.2097). In addition, by product
differentiation, Wal-Mart was able to increase sales to diversify its operations (technological) to
remain competitive in the market (economic).
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- Marketing strategy
2.1. Blue Ocean Strategy
Definition
This concept works based on developing uncontested market space rather than
competing with substitute opponents selling similar goods or services in the market (Chan
&Mauborgne 2011, p. 105). In other words in Blue Ocean marketing strategy, demand is created
rather than competing over the limited demand, which makes competition eventually
unnecessary. This explains the reason for the revival of circus industry despite the long-term
decline of the industry, which now is doing incredibly well profit wise (Mohamed 2009, p.28).
The concept is distinct to another model because it does not encourage direct competition with
rival firms. Relatively, the model advice on the importance of using skill to create a strong
image/brand. Čirjevskis, Homenko & Lačinova (2010, p.162) argues that the modern companies
are not able to leverage their activities such that they want to achieve competitive advantage by
using price strategies to outdo each other. The author attested that the most significant weapon to
win in the market is the one that is focused on attracting as many customers as possible.
Therefore, there is a need to come up with an innovative strategy to deal with the competition in
the market.
Aims and Objectives of Behind Concept of Blue Ocean Strategy
The main objective of this concept is to enhance national development in nations worldwide
by transforming local public sectors, states, low costs that cut across ministries, agencies, NGOs,
and municipalities at large (Mohamed 2009, p.29). The model is important to ensure that most of
the projects formulated by organization go through the implementation stage. The model
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assumes that a firm can best utilize the available resources to make it competitive in the market
(Chan &Mauborgne 2011, p.107). The intention here is not to engage in cutthroat competition
with rival firms, but to create a strong brand that other competitors can hardly challenge.
Requirements Favoring the Concept Usage
To discover the ‘Blue Ocean’ primarily the entrepreneurs should discover the five action
frameworks to break the trade-off and eventually come up with a new curve. There are certain
framework key questions that favor this concept usage (Mohamed 2009, p.38). One of the
questions is related to elimination. Elimination, in this case, implies that the company identifies
the factors that have existed in the organization that lowers its competitive advantage. In
addition, the company needs to remove such factors. The other question relates to creation (Chan
& Mauborgne 2011, p.115). In this particular occasion, the company identifies which products
that can capture the market share in the market. The third question is associated to reduction
strategies. Reduction entails that a company identifies what it should reduce below its level
standard.
Measurement of ‘Blue Ocean’ Strategy performance
This strategy uses various approaches to measuring performances (Mohamed 2009, p.48).
These approaches include developing a strategic canvas approach. It also gives a map of key
performance indicators (KPI’s) which involves comparing one’s company with that of the
competitors (Dr.Hilarly,2010), The straight forward approach. Blue ocean development analysis
here uses (ERCC) grid meaning elimination, reduction, and rise (Chan & Mauborgne 2011,
p.121). The above measures are important to ensure that a firm gauges the extent it has excelled
in making its brand strong.
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Strength of Blue Ocean strategy
A blue ocean strategy is a crucial tool used in diagnosing whether one’s business has
developed a comparative advantage proposition and supporting business models. It has made
most businesses grow at a high rate since they can be able to diverse their energy from irrelevant
competitions. In addition, the strategy is simpler to use (Čirjevskis, Homenko & Lačinova 2010,
p.172). The model gives some of the mechanisms that can be adopted by firms to make them
competitive in the market. These include product differentiation and increased advertisements.
Limitations of blue ocean strategy
One of the limitations is that the model is unfeasible. The model is viewed as unfeasible
since it is claimed no group was used since it is not stated how many companies failed as a result
of using this strategy (Čirjevskis, Homenko & Lačinova 2010, p.171). It is argued that rather
than Blue Ocean becomes a theory; it attempt to backup the already existing frameworks. This
statement implies that Blue Ocean draws assist form other models such SWOT analysis and
PESTEL analysis. The model has no any established methods of testing its recommendations.
Another limitation of the model is that it is easily manipulated since each factor seems to
contradict each other (Chan &Mauborgne 2011, p.127). The final limitation of the model is that
is assuming that marketing success will come as just a matter of course. This is not true on the
market situation. Gaining market share is a strenuous activity that takes a considerable time to
perfect it.
Applications of Blue Ocean Strategy
China mobility is one of the instances the Blue Ocean strategy was implemented
perfectly. China CEO Wang Jianzhou said that China market has been adapting the ocean market
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strategy, and that is why they have no worries of their rivals whatsoever, Starwood. In an
interview Robin Pratt vice president, ‘six sigma’ said how they are taking systematically in
applying the concept, TATA Motors (Čirjevskis, Homenko & Lačinova 2010, p.178). They have
adopted the skills of differentiation and low cost as it is stated in Blue Ocean Strategy. Another
instance where the application of the Blue Ocean strategy was effectively used was experienced
by Casella Wines in Australia. The company decided to make new wines drinking rules (Chan
&Mauborgne 2011, p.131). The final product that was unleashed was Yellow Tai. The brand
became highly recognizable on the Australian land. However, the price remained the same even
with the unleashing of the Yellow Wine.
2.2. Michael Porters Competitive Positioning Strategies
Definition of concept
The three porter’s generic strategies target as he had written in 1980 comprised of; cost
leadership, differentiation, and focus. The basis of this concept is to describe how an
organization or a company does to have a competitive advantage in the market (Grigore 2014,
p.32). According to this strategy, a company has a choice of choosing one of the three or gain the
risk of wasting its economic resources. Porter’s strategy was designed to combine and interact
cost minimization strategy, market focus strategy and finally product differentiation strategy.
According to Porter’s strategy, a company is comprised of major segments and there exists two
major types of competitive advantage. One of the segments is oriented towards the minimization
of costs (Lombana 2011, p.33). The other segment is designated to affect product differentiation.
One requirement for a company to gain a competitive advantage is that it has to make an effort of
picking a scope ahead of its competitors at least five times.
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Aims and Objectives of Michael Porters Competitive Positioning Strategies
The aim of the model is to find the competitive rivalry in the market. By identifying the
degree of competitive rivalry in the market, a company drafts mechanism on how to counteract
it. The degree of rivalry may be high, for instance, due to the presence of high exists costs. The
model also aims at observing the threat of new entrants. The company must be aware of the
newcomers in the market to come up recommendations on how to deal with them (Lombana
2011, p.36). The threat of new entrants may be high due to government-driven obstacles. The
other function of the model is to identify the threats of substitutes. The threat of substitutes is
brought by such factors as brand loyalty, switching costs, and trends. The fourth factor of the
model is the determination of the bargaining power of suppliers. Suppliers have power in the
market when they are small in numbers (Grigore 2014, p.34). The last factor addressed by the
model is the bargaining power of consumers. Consumers have power when the there are close
substitutes, or there are different companies in the market that offer the same products.
Requirements and Conditions that Favor Competitive Strategy
This particular strategy works efficiently when the cost of production is quite costly. The
model is mainly used when it comes in minimizing the cost. The model is also pertinent in a
situation where the particular product is well developed, and no similar products can rival it due
to its uniqueness (Grundy 2009, p.213). When a company focuses entirely on a particular
segment that is demanded by customers, this leads to a quality product thus enhances loyalty to
customers making it difficult to compete.
Approaches used in Measuring porters Competitive Strategy Performance
Cost Leadership Approach
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This simply means that a company is enjoying more profit by producing at a lower cost and
even if there is a price war, the company still gets profits while its rivals suffer losses. The
company can have the privilege to enjoy this if there is accessibility to the capital required.
When a company can obtain capital investment in both assets and raw material, this blocks other
rivals since not many can afford such an investment. Furthermore, it ensures continuity in profit
enjoyment, high level of expertise in the manufacturing process (Grundy 2009, p.223). This is
meant to ensure that a company enjoys minimal cost because of the qualified and experienced
workforce and efficient distribution channels. To attain a minimum cost possible, a company
requires its means of transporting products.
Differentiation Approach
This approach mainly entails developing products that offer unique attribute and at the same
time valued by consumers. Companies that enjoy this approach they have the following
strengths; access to leading scientific research, high level of skills developed products and
creative team (Grigore 2014, p.43). It also enjoys a strong sales team with the ability to
communicate efficiently that markets products to the consumers.
Focus Approach
Here, a company concentrates on a particular narrow segment and tries to it’s best to perfect
it so as to win the consumers loyalty thus able to beat their competitors of the similar product
(Grundy 2009, p.225). By this, it considers itself to have performed.
Strengths of Michael Porters Competitive Positioning Strategies
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With the help of this strategy, companies have been able to run their companies while
producing at a minimum cost, which makes it not to collapse due to profits enjoyment.
Companies have been able to lower price to powerful buyers (Grundy 2009, p.232). Companies
can comfortably lower prices to defend substitutes without incurring any loss, customer loyalty.
In addition, companies can discourage potential entrants in the market. The customers become
more attached to differentiating attributes thus reducing threats on substitutes. Brand loyalty has
been known to keep customers from potential rivals. A company can focus develops
competencies (Grigore 2014, p.43). For instance, buyers have less power to negotiate because of
fewer alternatives of similar goods, specialized products protect against substitutes. Finally,
proper use of the tool can make rivals firms unable to meet differentiation-focused customer
wants.
Limitations of Michael porters Competitive Positioning Strategies
Porters stated that use of more than one strategy would result in failure of the organization.
Hence, there is no clear future direction trajectory. It is mentioned that differentiation strategy
will be costly which clearly contradicts with that of cost minimization cost (Grundy 2009,
p.236). Research writings of Davis state that companies were applying a hybrid strategy perform
better than those adopting the generic strategy. Grundy (2009, p.237) challenged Porters by
arguing that application of two strategies will result in more competitive. After eleven years,
Porter revised his thinking and saw that hybrid strategy can exist (Grigore 2014, p.46). The two
focal objectives of low-cost leadership and differentiation clash with each other leading to no
direction. Porter had a primary belief in his concept about the invalidity of hybrid business
strategy. He argued that the highly prone and turbulent market conditions would not allow the
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survival of concrete business strategies, since long-term establishment will depend on the ability
and the quick responsiveness towards the market and environmental conditions.
Examples of How Concept have been appropriately used
Influencing and thinking in the United States of America and other countries towards
health care deliveries (Grundy 2009, p.253). The strategy helps business managers and marketers
to look at business powers between different types of departments and enhance the attractiveness
and maximum profit.
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Reference list
Chan K. Mauborgne, R. (2011). Blue Ocean Strategy: FROM THEORY TO PRACTICE.
California Management Review. Vol. 47 Issue 3, p105-141. Retrieved from Database:
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Čirjevskis, A. Homenko, G. & Lačinova, V. (2010). NEW APPROACHES IN MEASUING
AND ASSESING VIABILITY OF BLUE OCEAN STRATEGY IN B2B SECTOR.
Journal of Business Management. Issue 3, p162-179
Ding-Hong P. Tie-Dan W. Chang-Yuan GAO. (2014). INTEGRATING NONHOMOGENEOUS
PREFERENCE STRUCTURES IN SWOT ANALYSIS TO EVALUATE MULTIPLE
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Research. 2014, Vol. 48 Issue 3, p110-163. 24p. Database: Business Source Complete
Everett, Robert F. (2014). A Crack in the Foundation: Why SWOT Might Be Less Than
Effective in Market Sensing Analysis. Journal of Marketing & Management. Issue
Special 1, p58-78.
Grigore, A. (2014). Book Publishing Business in Romania – An Analysis from the Perspective of
Porter’s Five Force Model. Review of International Comparative Management / Revista
de Management Comparat International. Vol.
