Strategic Business Analysis and Market Growth Models

Strategic Methods for Accessing Information

Three key ways to assess changes in a company are (1) PEST analysis (political, economic, social, and technological), (2) scenario analysis, and (3) trend analysis. In answering this question, the clear distinction between PEST and SWOT should be demonstrated.

The PEST analysis provides insights into trends that may be important to an industry or an economy. PEST has variations, including:

• PESTLE (PEST + legal and environment)
• STEP (social, technology, economy, and politics)
• PESTILI (PEST + industry analysis)
• STEEPLED (PEST + ecological or environmental, ethical, demographic, and legal)

The PEST analysis provides a foundation for other analyses, such as trend analysis. While PEST focuses on external environmental factors that affect the business, SWOT analysis focuses on both internal and external factors.

Trend and Scenario Analysis

Trend analysis uses market information to process information. It is based on multiple regressions, and data analysis is carried out to identify trends. Forecasting is often complex, but trend analysis does provide a detailed outlook of possible trends.

Scenario analysis focuses on ongoing trends and highlights two or more possible outcomes, relates the scenarios to existing and probable strategies, and then estimates scenario probabilities by incorporating multidimensional and hierarchical decisions.

Understanding the Product Lifecycle

The product life-cycle is an econometric model that describes changing purchase behavior in a market over time. It allows strategists to match the types of market behavior described in the product life-cycle to different generic strategies to achieve competitive advantage.

The model is a continuum with products generally passing in an orderly manner through the following stages:

• Initial stages of development
• Introduction
• Growth
• Maturity
• Ultimate decline

SME Strategies in Mature Markets

What strategies should smaller and medium-sized companies focus on in a mature market? Smaller brands should focus on the following approaches:

• Gaining Scale: Become more efficient by gaining scale—this can be achieved through buying smaller rivals or entering alliances with other companies.
• Improving Processes: Smaller brands can also seek to gain efficiencies by improving processes and materials.
• Differentiation: Products should be differentiated from the market leaders to prevent them from being perceived as 'me-too' products. One way to achieve this is to identify niches where the leader is unable to do well.