marketing strategy is often thought about in terms of where the market is going and how best to satisfy the changing needs of the market. Rarely is time spent analyzing one's own company and its brands in addition to taking a proactive stance toward competitors.
The importance of doing that analysis is apparent in a well-known, but rarely followed, assessment by the ancient Chinese military strategist, Sun Tzu.
In The Art of War, he points to knowing both yourself (in this case, your organization) and your competition as essential to long-term advantage:
If you know the enemy and know yourself, you need not fear the result of a hundred battles. If you know yourself, but not the enemy, for every victory gained you will also suffer a defeat. If you know neither the enemy nor yourself, you will succumb in every battle.
When Sun Tzu spoke of knowing yourself, he wasn't referring to short answers along the lines of "yeah, we're good at X or Y." Rather, you need to truly know your organization's underlying capabilities and not rely on superficial assessments.
You need to examine whether you have strengths and weaknesses that support, or don't support, the benefits the market is looking for now and will be looking for in the future.
To that end, one way to analyze yourself is through the lens of a value chain.
Though the concept of a value chain can quickly get complicated for some people, a value chain essentially describes an organization's activities in transforming raw materials and components into finished products and services delivered to customers.
The point of taking this approach is to see whether you might have unique strengths or hidden weaknesses.
A simplified way of thinking about your value chain focuses on three primary activities:
- Upstream activities: those that your organization relies on, such as purchases of raw materials and inputs required for production
- Product design/manufacturing: what your organization does with the upstream activities to turn them into finished products
- Downstream activities: marketing, sales, and service
The analysis of those activities includes looking at things like the speed of producing goods and services, investments in capacity, labor force quality, and so on.
Now this view of a value chain (upstream, production, downstream) is simple, but you can make it far more complex if you want. In fact, you may need to if you are in a large, complex, or multiple-brand organization.
For example, perhaps you've visited a Walmart or seen or heard its slogan, "Everyday Low Prices." Walmart's value-chain reveals how it gets those low prices.
For example, it has opted to work with manufacturers directly, cutting out the costs of intermediaries like traders (wholesalers). Historically, Walmart eliminated storage costs by unloading items from an incoming semitrailer truck or railroad car and loading these materials directly into outbound trucks, trailers, or rail cars (and vice versa), thus avoiding storage costs in between.
What you are looking for in your analysis of the value chain are the "places" that support or detract from your organization's ability to provide what the market wants.
How Else to Analyze Yourself
In addition to the value chain, there are other ways to know yourself, the following among them:
- Cost analysis, such as break-even figures and margin requirement
- The organization's economic stability (its availability and willingness to spend money)
- The organization's incentive structure
- An organizational culture that supports marketing
- The organization's reputation
- The organization's history in supporting the benefits in its positioning statement
You might also focus on your company's brand architecture—that is, how the various brands that make up the organization (or parent brand) are related to each other.
The brand architecture, and how your specific product fits within that architecture, can impose restrictions on whether your positioning is credible to customers. For example, let's say your brand is in a "branded house," where the parent brand is placed on all of the sub-brands. As a result, the associations the market has with the parent brand will spill over to sub-brand. (Sometimes that is a good thing, but it can also restrict the positioning of your brand.)
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The point of self-analysis is not analysis for its own sake. What you're doing is looking deeply into your company and its relationships with its partners so that you are forced to see both the good and the bad. Which simply means you'll have more choices to do even better: You can fix what's wrong and not merely rest on the laurels of what you've done well.
In this way, you will not inevitably have defeats, as Sun Tzu put it.
Good, proactive competitive analysis (a topic for a future article) ensures your survival.
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