Marketing Management - Nissan Motor Manufacturing - Research Paper Example

? Marketing Management ID Number & Total Number of Words: 3,005 0 Introduction A good marketing management is essential behind the success of any business organization. To be able to come up with the best marketing management strategy, managers should carefully examine not only the external but also the internal factors that could affect the success and failure of a business organization. Through the use of the SWOT (strength, weaknesses, opportunities, and threats) analysis framework, the executive managers are expected to gain a better insight with regards to all business aspects that should be taken into consideration when making important business decisions (Oetomo and Ardini, 2012; Chan, 2011; Ommani, 2011; Murray-Webster, 2010, p. 88; Valentin, 2001). This explains why most of the colleges and universities are very focused on equipting all future managers with regards to the use of this particular analytical tool in business (Aghdaie and Zardeini, 2012; Chan, 2011). As defined by Lamb, Hair and McDaniel (2012, p. 40), competitive advantage is “a set of features of a company and its products that are perceived by the target market as signficant and superior to the competition”. Considering the tight market competition that is currently going on in both domestic and international market, the ability of the managers to develop and create a competitive advantage on behalf of the company becomes very important. With the purpose of gaining more insight on how to critically examine both internal and external factors that can significantly affect the success or failure of a business organization, this study will focus more on critically evaluating the main role of the SWOT analysis framework particularly when it comes to establishing strategic priorities that will improve the company’s ability to compete within the local and international market. To give the readers a better understanding with regards to this topic, the definition and main purpose of the SWOT analysis framework will first be provided followed by discussing some real-life examples that can prove the loopholes with regards to the use of the SWOT analysis framework. 2.0 Definition and Main Purpose of the SWOT Analysis Framework Murray-Webster (2010, p. 88) defined SWOT analysis as a “technique for focusing an individual’s or group’s attention on strengths, weaknesses, opportunities, or threats”. Using a 2 x 2 matrix, the main purpose behind the use of the SWOT analysis framework is to help executive managers make important decisions that can affect the company’s short-term and long-term overall business performance (Aghdaie and Zardeini, 2012; Oetomo and Ardini, 2012). According to Ommani (2011), it is possible to conduct a SWOT analysis to help the business people and executive managers gain a better understanding and full insight with regards to the company’s past business experiences. By going through the previous experinces of the managers, Ommani (2011) explained that the company’s top executives can think better in terms of developing effective solutions to the problems. For example, through the use of this particular analytical framework, executive managers will be able to identify the company’s current position in the market and all signs of potential future risks. Specifically the identified strenghs and weaknesses are internal factors whereas opportunities and threats are external factors that can significantly affect the business (Aghdaie and Zardeini, 2012). Using the SWOT analysis framework, executive managers will also be able to compare and constrast the company’s internal strengths and weaknesses with that of its close competitors (Aghdaie and Zardeini, 2012; Murray-Webster, 2010, p. 88). According to Ferrell and Hartline (2011, p. 120), the SWOT analysis framework is the simpliest and most effective strategic planning tool which can be used in the study and analysis of all marketing facts and figures. It means that through the use of this particular framework, executive managers will be able to develop and come up with a more effective marketing plan on behalf of the company. However, despite the usefulness of this particular marketing planning tool, a lot of people continuously criticize its value when it comes to the development of effective marketing plan (Ferrell and Hartline, 2011, p. 122). 3.0 The Role of SWOT Analysis Framework in Creating Competitive Advantages When using the SWOT analysis framework, business people and executive managers should continuously take advantage of the company’s identified strength as a way of creating more business opportunity for the company (Chan, 2011). At the same time, business people and executive managers should focus on finding new ways so that the company can easily convert its identified weaknesses into new business opportunities. In almost all business cases, effective use of the SWOT analysis framework can help the company create more competitive advantage. In line with this, it will be easier on the part of the company to create and develop more effective and useful strategies right after the business owners and executive managers have successfully identified the company’s weaknesses. For example, Nissan Motor Manufacturing (UK) Ltd. is actually a Japanese carmaker that has gained a strong position in the world market. Nissan Z® model has been very successful in terms of winning the loyalty and support of millions of car racing and sports car enthusiasts around the world. However, the number of people who prefers to buy 4 x 4 cars or SUVs over Nissan Z® has gradually increased over time. This year, Nissan Z-sports car will make a dramatic come back to the market with its 370Z (Star Motoring, 2012). Even though Nissan is looking forward to sell its 370Z this year, the company is only advertising this particular brand model online (i.e. company’s official website, etc.). Since one of the weaknesses of Nissan is the lack of aggressiveness in its marketing campaign, the act of aggressively advertising the company’s plan to sell the 370Z model will open new business opportunities for the company. It means that investing more on heavy advertisement can somehow increase the company’s market shares, sales and profitability. The identified weaknesses and threats is the area that can create serious problem on the part of business. As a common knowledge, it is always better to create strategic solutions to the known problems as compared to unknown problems. For this reason, learning more about the company’s weaknesses and threats can be considered as the first step towards creating more effective strategic plan for the company. For example, also related to the case of Nissan, one of the most obvious threat is the risk of high fuel prices. Since the market prices of fuel is volatile, a lot of people may not be able to afford to purchase a new car would tend to use the public tranportation rather than investing in their own vehicle. In order to convert this particular threat into new business opportunity, Nissan should consider investing more funds in its research and development (R&D) so that the company can benefit from being the pioneer in the development and selling of cars that do not require the use of gasoline. 4.0 Advantages and Disadvantages behind the Use of the SWOT Analysis Framework There are advantages and disadvantages associated with the use of the SWOT analysis framework. Among the advantages of using this particular strategic marketing management planning tool includes not only simplicity but also being cost-effective and flexible (Oetomo and Ardini, 2012; Ferrell and Hartline, 2011, p. 122; Faarup and Aabroe, 2010, p. 178). Furthermore, the SWOT analysis framework can be used in the process of aligning the company’s available resources and the external market environment (Aghdaie and Zardeini, 2012). For example, the SWOT analysis framework is not only cost-effective but also very much easy to use. With the use of critical thinking analysis, executive managers will be able to benefit from this particular framework without the need to undergo lengthy and extensive training procedures (Ferrell and Hartline, 2011, p. 122; Faarup and Aabroe, 2010, p. 178). Aside from being simple and easy to use, the SWOT analysis framework is known for its flexibility in the sense that executive managers are able to easily integrate and synthesize a wide-range of information coming from various departments and external sources (Ferrell and Hartline, 2011, p. 122; Faarup and Aabroe, 2010, p. 179). The use of the SWOT analysis framework is applicable and limited in analyzing a business situation within a single level. It means that even though the SWOT analysis framework can be use as an effective analysing and planning tool not only in the field of marketing but also in different field related to the company’s production and operational department, financial department, HR management department, etc. (Chan, 2011; Faarup and Aabroe, 2010, p. 179), business people and executive managers should keep in mind that they should use the SWOT analysis framework one at a time. It is not possible to use a single SWOT analysis framework to analyse the business situation in multiple levels. Aside from analyzing the business situation within each department, the SWOT analysis framework can also be used in analyzing business competition (Chan, 2011). According to Valentin (2001), “the conventional SWOT guidelines offer little more than menus of assorted generic strengths, weaknesses, opportunities, and threats (SWOTs)”. Basically, the statement made by Valentin (2001) strongly suggest that despite the advantages associated with the use of the SWOT analysis framework, there will always be some disadvantages with regards to the use of this particular strategic planning tool. First of all, the SWOT analysis framework as a form of strategic planning tool has been subject to a lot of crticism due to the fact that executive managers can freely use this tool to come up with a list of strengths, weaknesses, opportunities, and threats without seriously taking into consideration all aspects that can affect the issue (Ferrell and Hartline, 2011, p. 122). It means that the executive managers will always be at risks of presenting a SWOT analysis that are either exaggerated or not accurate in terms of analysing both internal and external factors that can affect the company’s market share and business profitablity. For this reason, Valentin (2001, p. 92) gave out the idea that the use of the SWOT analysis framework can give people with “false impression” that executive managers can easily spot the company’s strengths, weaknesses, opportunities, and threats on a glance. As a commonly used marketing management strategic tool, Valentin (2001, p. 92) argued that the “SWOT analysis framework does not readily accomodate tradeoffs”. In line with this, Valentin (2001) considered the case of the Southwest Airlines as a good example that clearly suggest that the use of this particular strategic tool is not effective in terms of analyzing the tradeoffs of a specific marketing strategy. For example, it is not clear whether or not the process of offering in-flight meals can serve as a company’s strength because in the process of offering in-flight meals, the Southwest Airlines’ fixed operating expenses increases. On the other hand, it is also difficult to classify the act of offering in-flight meals as one of the company’s weaknesses because the use of this particular marketing strategy can somehow encourage more passengers to patronize the flights and services offered by Southwest Airlines. Also applicable in the case of the Southwest Airlines, the act of extending in-flight meals can be considered as a marketing strategy that will create competitive advantage on the part of the airline company. Likewise, the process of offering in-flight meals to the passengers can also add up to the overall customer value (Valentin, 2001). This particular marketing strategy can be classified as one of the Southwest Airlines’ strengths due to the reason that the act of offering in-flight meals can open new opportunities for the company to invite more passengers and make its existing passengers loyal to the company. When analyzing the case, this particular marketing strategy can also be classified as one of the Southwest Airlines’ weaknesses because in the process of offering in-flight meals without successfully increasing the number of domestic and international passengers, the company’s fixed operational cost will remain high. For this reason, it will be more difficult on the part of the Southwest Airlines to offer cheaper airfare. Thus, making it more difficult on the part of the Southwest Airlines to compete with other equally successful budget airlines. Another serious criticism with regards to this particular tool is that the framework can be used by the executive managers without increasing the company’s overall productivity level (Ferrell and Hartline, 2011, p. 122). It simple means that whether or not the company will benefit from the SWOT analysis framework is highly dependent on the executive managers’ ability to use the framework effectively and eventually implement all necessary measures that can significantly reduce any current and future risks. Due to ignorance with regards to the use of the SWOT analysis framework, excessive use of this paticular strategic tool can lead to a long-term cost deficit (Valentin, 2005). Valentin (2001) critiqued about the idea that the guidelines used in the SWOT analysis framework can mess up with the process of acocmplishing the company’s business goal and other strenghs. In line with this, Valentin (2001) explained that it is possible to classify market-share leadership as one of the company’s strengh. Even though it is common for a company with bigger market share to have a higher earning, this is not always the case since it is possible for a company with a big market share to end up with lower earnings due to different external factors such as a strict government regulation with regards to the selling price of their products and services, huge debt with the company’s creditors, and poor internal management, among others. According to Weihrich (1982), the TOWS matrix is a “mechanism for facilitating linkages and presents a framework for identifying and formulating strategies” (cited in Proctor, 2000, p. 138). The SWOT analysis framework is more focused on describing the company’s current business situations. Basically, the scope of the TOWS matrix is much wider as compared to the SWOT analysis framework (Koontz and Weihrich, 2007, p. 107). In line with this, the TOWS matrix is more focused in enabling the executive manager design and implement an alternative strategy that could effectively address the company’s current and future problems. For this reason, one of the weaknesses or drawback with regards to the use of the SWOT analysis framework is that this particular analyzing tool will not provide the executive managers with a backup solution to its problem. It means that the use of this particular framework alone will not empower the executive managers to solve a long list of organizational and business problems. Valentin (2001) also pointed out the idea that “the SWOT guidelines generally lack criteria for prioritizing SWOTs”. It simply means that the executive managers can easily write down their own identified company’s strengths, weaknesses, opportunities, and threats without even highlighting which among the company’s strengths, weaknesses, opportunities, and threats should be given a priority and those that are not so important. Since the SWOT guidelines does not literally require the executive managers to think about which among the identified aspects should be given priority, some people who uses the SWOT analysis framework may not know what to do after they were able to identify he company’s strengths, weaknesses, opportunities, and threats. 5.0 Discussion It is common for most business people to make use of the SWOT analysis framework without fully realizing its limitations. By not knowing the limitations associated with the use of the SWOT analysis framework, most of the executive managers will end up using this particular strategic planning tool as a way of writing down specific factors in one of the four major quadrants known as the company’s strengths, weaknesses, opportunities, and threats. In relation to the critiques presented by different people, another possible loophole with regards to the use of the SWOT analysis framework is the idea that this particular tool is not effective when it comes to identifying the company’s internal and external problems. Since the traceability when using this framework is very weak, most of the business people and executive managers who failed to initially identify all possible internal and external problems are left untraceable until the time wherein the company is already in the middle of facing the problem. 6.0 Conclusion and Recommendation There are quite a lot of internal and external factors that can significantly affect the actual sales and profitability of a company. To ensure that executive managers are prepared in dealing with negative internal and external forces that can impede the company’s market growth; it is essential for executive managers to carefully study and analyze all factors that could somehow affect the company’s overall business performance. To do so, business owners and executive managers can make use of the SWOT analysis framework. Despite the advantages associated with the use of the SWOT analysis framework, there are also several disadvantages when it comes to the use of this particular framework. Among the limitations with regards to the use of the SWOT analysis framework include the risk of exaggerating the business analysis behind the identified internal and external factors, the inability to identify potential tradeoffs behind each particular marketing strategy, this particular tool can be used by the executive managers without increasing the company’s overall productivity level, the guidelines used in the SWOT analysis framework can mess up with the process of acocmplishing the company’s business goal and other strenghs, and finally, executive managers can easily write down their own identified company’s strengths, weaknesses, opportunities, and threats without even highlighting which among the company’s strengths, weaknesses, opportunities, and threats should be given a priority and those that are not so important. According to Applegate and Johnsen (2007, p. 28), “a PEST Analysis measures a market while the SWOT Analysis measures a business, product, service, proposition, or idea”. Considering the loopholes associated with the use of the SWOT analysis framework, the company’s executive managers should acknowedge the benefits offered by the use of the PEST framework. Although the use of PEST Analysis alone is possible, the company’s executive manager should be aware that the process of combining these two frameworks will maximize their ability to come up with the best marketing solution for the company. References Aghdaie, S. and Zardeini, H. (2012). A SWOT Analysis of Persian Handmade Carpet Exports. International Journal of Business and Management, 7(2), pp. 243-251. Applegate, E. and Johnsen, A. (2007). Cases in Advertising And Marketing Management: Real Situations for Tomorrow . Plymouth: Rowman & Littlefield Publishers Inc. Chan, X. (2011). A SWOT Study of the Development Strategy of Haier Group as One of the Most Successful Chinese Enterprises. International Journal of Business and Social Science, 2(11), pp. 147-153. Faarup, P. and Aabroe, J. (2010). The Marketing Framework. Denmark: Academica. Ferrell, O. and Hartline, M. (2011). Marketing Strategy. OH: South-Western Cengage Learning. Herrmann, A., Xia, L., Monroe, K. and Huber, F. (2007). The influence of price fairness on customer satisfaction: an empirical test in the context of automobile purchases. Journal of Product & Brand Management, 16(1), pp. 49-58. Koontz, H. and Weihrich, H. (2007). Essentials Of Management. New Delhi: Tata McGraw-Hill. Lamb, C., Hair, J. and McDaniel, C. (2012). Essentials of Marketing. 7th Edition. OH: South-Western Cengage Learning. Murray-Webster, R. (2010). Management of risk: guidance for practitioners. Belfast: The Stationery Office. Oetomo, H. and Ardini, L. (2012). SWOT ANALYSIS IN STRATEGIC MANAGEMENT: A CASE STUDY AT PURABAYA BUS STATION. Journal of Economics, Business, and Accountancy Ventura, 15(2), pp. 171-186. Ommani, A. (2011). Strengths, weaknesses, opportunities and threats (SWOT) analysis for farming system businesses management: Case of wheat farmers of Shadervan District, Shoushtar Township, Iran. African Journal of Business Management, 5(22), pp. 9448-9454. Proctor, T. (2000). Strategic Marketing: An Introduction. London: Routledge. Star Motoring. (2012, February 8). Nissan 370Z refreshed. [Online] Available at: http://star-motoring.com/Previews/2012/Nissan-370Z-refreshed.aspx?feed=StarMotoringPreviewsFeed [Accessed 9 January 2013]. Valentin, E. (2005). Away With SWOT Analysis: Use Defensive/Offensive Evaluation Instead. The Journal of Applied Business Research, 21(2), pp. 91-105 . Valentin, E. (2001). SWOT analysis from a resource-based view. Journal of Marketing Theory and Practice, 9(2), pp. 54-68. Read More