M.Porters five forces analysis.

The questions of marketing.

1. General characteristics of the power school .

The power school of Mincsberg we can characterize as the construction of strategy as the speech process. Strategy formation, according to this approach, is defined by imperious and political forces, whether it be processes in the organisation or its action in an environment. Strategy arising thus, as a rule, have spontaneous character and the position or dodge, instead of prospect take the form.

The micropower considers strategy creation as the interaction which is based on methods of belief, negotiations, and sometimes and direct confrontation, in the form of politics tricks round crossed interests and the formed coalitions, any of which does not possess dominating positions during the long period of time.

The macropower considers the organisation as aspiring to the well-being by means of the control over actions of other agents of the market or by cooperation with them. Thus the companies lean both against strategic maneuvering, and on collective strategy in various sorts network structures and alliances.

2. The external environment of the organization.

The external environment is typically made up of things , situations, and events that occur outside of an organization, (usually beyond the organizations control), and affects the organization in either a positive or negative way. Some of these external things, situations, and events that affect the organization in a positive or negative way may include the following.

· Demographics: these include the social, economical and cultural changes like population age, ethnicity, education level and economic class. Such changes affect the customer preference and the mass market trends;

· economy

· government interference

· Political issues: all organizations have to abide by the legal system, new laws and regulations are constantly added due to the political or social changes. Compliance can result in additional cost, developing new technology, additional taxes or legal fees.

· Social issues or customers: they are the end-users of the product and services, the most critical aspect of the environment.

· Competition: its comprises of the related industries with similar products or services, their geographic locations and markets;

· Environment issues: every organization uses certain raw materials to manufacture its product or service, any disruption in its supply, changes in cost of materials etc can have an adverse effect.

M.Porters competition Model.

           The Rivalry.

For the majority of branches, it is the defining factor influencing level of a competition in branch. Sometimes players compete aggressively, sometimes there is not price competition in innovations, marketing, business models etc.

· Quantity of competitors

· Level of growth of the market

· Criteria of saturation of the market

· Input barriers in branch

· Barriers of an exit from branch

· Distinctive lines of competitors

· Level of expenses of competitors on advertising

· Ambitions of the first persons and shareholders of competitors

In pursing an advantage over its rivals, a firm can choose from several competitive moves:

· Changing prices;

· Improving product differentiation;

· Creatively using channels of distribution;

· Exploiting relationships with suppliers.

SWOT analysis.

SWOT analysis (alternately SWOT Matrix) is a structured planning method used to evaluate the Strengths, Weaknesses, Opportunities, and Threats involved in a project or in a business venture. A SWOT analysis can be carried out for a product, place or person. It involves specifying the objective of the business venture or project and identifying the internal and external factors that are favorable and unfavorable to achieve that objective. The technique is credited to Albert Humphrey, who led a convention at the Stanford Research Institute (now SRI International) in the 1960s and 1970s using data fromFortune 500 companies.

Setting the objective should be done after the SWOT analysis has been performed. This would allow achievable goals or objectives to be set for the organization.

· Strengths: characteristics of the business, or project team that give it an advantage over others

· Weaknesses: are characteristics that place the team at a disadvantage relative to others

· Opportunities: external chances to improve performance (e.g. make greater profits) in the environment

· Threats: external elements in the environment that could cause trouble for the business or project

Identification of SWOTs is essential because subsequent steps in the process of planning for achievement of the selected objective may be derived from the SWOTs.

First, the decision makers have to determine whether the objective is attainable, given the SWOTs. If the objective is NOT attainable a different objective must be selected and the process repeated.

Users of SWOT analysis need to ask and answer questions that generate meaningful information for each category (strengths, weaknesses, opportunities, and threats) in order to maximize the benefits of this evaluation and find their competitive advantage.

The design school.

The design school characterizes as the formation of strategy as the process of comprehension. All also has begun with it. The end of 50th years of the XX-th century. The SWOT-analysis and thought on necessity of conformity of internal potential of the organisation to possibilities of its environment Here was born. Strategy formation should be the thought over process of conscious thinking. Responsibility for the control over strategic process and its conscious character is assigned to the head who is the strategist. The model of construction of strategy should remain enough simple and informal. Strategy should be unique: the best, received as a result of individual modelling. Modelling process is considered finished when strategy is formulated as prospect. Only after the unique, ripened, clear and simple strategy is definitively formulated, process of its introduction begins.

M.Porters five forces analysis.

Porter five forces analysis are a technique for the analysis of branches and development of strategy of the business, developed by Michael Porter at the Harvard business school in 1979.

Five forces of Porter include:

· Rivalry;

· Threat of new entrants;

· Supplier power;

· Buyer power;

· Threat of substitutes.