Developing Competitive Advantage - Essay Example

Q The PEST or the Political, Economic, Social and Technological analysis tool is widely used in marketing practice to analyze the macro environment in which a company operates. The tool is popular because of the comprehensiveness that it offers to analyze how the different macro environmental factors affect the company and its operations (Kotler, 2010). To take an example, let us consider the PEST analysis for Qantas airline that has been in the news recently for labour disputes as well as operational and technical reasons.

The following would be the PEST analysis for Qantas in the current context where headwinds are buffeting the airline and threatening its existence (Wassener, 2011). Political Given the strong support for industry and business friendly policies that the Australian government follows, it is not surprising that the Australian government intervened in the dispute between the management of Qantas and its unions. Hence, this is a good example of how strong political support can help companies weather problems that are political in nature.

A contrary example would be the decision to let Lehman Brothers go bankrupt because of political pressure which is an indication that weak political support would mean disaster for companies (SMH, 2011). Economic The way in which the macroeconomic environment affects Qantas can be seen in the way the ongoing global economic crisis has severely affected the functioning of the airline due to increased operational costs (on account of higher fuel prices) and reduced passenger demand (because of diminishing incomes and hence less incentive to fly).

Hence, the macro economy affects the companies and this dimension is used to analyze the effect that it has. A contrary example of how the macro economy has favourably affected a company would be Shell which has seen its profits rise on account of the rise in fuel prices as well as a conscious decision taken by the company to diversify into allied sectors like alternative energy sources (COMNAP, 2011). Social This dimension analyzes the societal trends that affect a company and if we continue with the example of Qantas, we find that the airline is favourably affected by this dimension since it is seen as a trendy airline and the demographics of the Asia Pacific region (to which it primarily caters) indicate more numbers of young people which when coupled with the image that the airline has in terms of service means that it is able to tap into this segment (Hofstede, 2001).

Technological This dimension is about how changes in technology affect companies and for Qantas, the acquisition of the Airbus A 380 (which is the latest in the jumbo jet category) has resulted in positive correlations. However, the fact that Qantas faced severe technological issues last year because of malfunctioning of its aircraft is an indication of how technology can have an adverse impact on a company’s operations (Qantas, 2011). Q 2) There are five stages in the customer hierarchy of needs which astute marketers can tap into if they are to harness the buying potential of consumers.

These five stages are: 1. Physiological needs (basic drives), (thirst, hunger, warmth); 2. Safety needs (protection, security); 3. Social needs (sense of belonging and love); 4. Esteem needs (self esteem- recognition, status); 5. Self actualisation needs (self fulfilment/development and realisation) (Marchington & Wilkinson, 2005). These needs follow Maslow’s need hierarchy where an individual progresses through the different stages of fulfilment starting with the basic needs and going all the way to the highest need for actualization of one’s vision.

For consumers, the basic needs are about food, clothing and shelter and hence marketers can devise products centred on these basic needs for consumers who are young or whose income levels are low. The next sets of needs are for protection and security which come from having a family and friend network that acts as a support system for the consumer. Hence, marketers can target these consumers with products that are aimed at their families (Kotler, 2010). The next level in the need hierarchy is a sense of belonging and love which arises from the need to be loved by friends and family and consumers in this need level has an affinity for products that enhance their sense of belonging.

The products that marketers can use in this level are those that take care of growing kids and their needs as this has a positive correlation with their parents in this level. The fourth stage is the need for self esteem which means that consumers in this level need to be accorded respect and hence products like luxury goods and club memberships as well as premium products can be targeted at this segment which is a means to enhance their social status and self respect. The final set of needs are the need to actualize one’s vision and mission in life and this sense of fulfilment can be met through marketing that appeals to the social conscience of the consumers.

Typical examples would include marketing NGO’s and social organizations that strive for the welfare of the people. Consumers at this need level have an innate desire to help society and hence can be expected to lend their support for social causes (Rodriguez, 2009). Though the hierarchy of needs can be considered chronological in the sense that it reflects the progression through life of a consumer, it is by no means restricted in this way nor it is constrained by income levels (a common assumption made by many marketers) since the current trend is towards fulfilment at a young age (Marchington & Wilkinson, 2005). Q 3) The industrial product that is used for analysis is the aeroplane and the variables that can be used to segment the market can be according to the size and the seating capacity of the aeroplane, the luxury afforded by the aeroplane, the distance that it can fly (long haul or short haul) and finally, the ease of operation and maintenance.

For instance, both Airbus and Boeing manufacture planes that fit into all these categories though they concentrate more on the market segments for size and seating capacity as well as the distance that they can fly (S&P, 2010). On the other hand, the ATR aircraft are targeted at market segments that cater to luxury and use by high Networth individuals as well as for short haul budget passengers. The point here is that the market segments are fungible meaning that the boundaries between the segments are flexible and hence the variables that have been listed can be cross utilized.

Finally, custom built aircraft belong to a different market segment altogether and this is a segment that concentrates on luxury alone (Jonathan et al, 2008). The consumer product that is used for analysis is the mobile phone and the variables that are used to segment the markets are: stylishness, features, latest generation wireless compatibility, cost, demographics and the ease of use of the mobile phone (Jonathan et al, 2008). For instance, Apple has targeted the latest generation segment along with features and hence cost is not a consideration.

However, Samsung concentrates on cost and ease of use of the mobile phone. Further, both Apple and Samsung appeal to the youth and those who are technologically savvy as the market segment that they target. Nokia, on the other hand has targeted the market segment that goes for stylishness, cost and geography (this is another variable that is used by some companies). This is because Nokia offers its products in select countries as compared to the other companies whose phones are available globally.

Finally, we have the other players who are regional in their reach and who target the segments that are focussed exclusively on cost and specific region (Prahalad, 2007). References 1. Archive, W. (2011, Aug 04). About Qantas: Our Company - History - Small Beginnings. Retrieved Nov 10, 2011, from Web Archive: http://web.archive.org/web/20061009061143/http://www.qantas.com.au/info/about/history/details2 2. C.K.Prahalad. (2007) The Fortune at the Bottom of the Pyramid. New York: Simon and Schuster. 3. COMNAP.

(2011, May 07). Antartic Aviation Overview. Retrieved Nov 10, 2011, from COMNAP: https://www.comnap.aq/operations/aviation/ 4. G, Hofstede. (2001) Cultures Consequences: comparing values, behaviours, institutions and organizations across nations. Thousand Oaks, CA: SAGE Publications. 5. Jonathan C. Ho, Chung-Shing Lee. (2008). The DNA of Industrial Competitors, Research Technology Management. Volume: 51. Issue: 4.17-21. 6. Kotler, Philip. Marketing Management. New York: McGraw-Hill, 2010. 7. Marchington, M.

and Wilkinson, A. (2005), Human Resource Management at Work: People Management and Development, 3rd edition, London: CIPD. 8. Qantas. (2010, Sep 11). Qantas Annual Report 2010. Retrieved Nov 10, 2011, from Qantas.com: http://www.qantas.com.au/infodetail/about/investors/2010AnnualReport.pdf 9. Rodriguez, S. (2009, Aug 24). Consumer Behavior Report: Economic Climate Shifts Consumers Online. Retrieved Aug 16, 2011, from PriceGrabber.com: https://mr.pricegrabber.com/Economic_Climate_Shifts_Consumers_Online_March_2009_CBR.pdf. 10. S&P. (2010).

Standard & Poors Industry Surveys. Standard & Poors Corp , 23-57. 11. SMH. (2011, Oct 29). Qantas suspends flights indefinitely . Retrieved Nov 10, 2011, from Sydney Morning Herald: http://news.smh.com.au/breaking-news-national/qantas-suspends-flights-indefinitely-20111029-1mpb0.html 12. WASSENER, B. (2011, Aug 16). Airlines Race for Slice of Expanding Asia Market. Retrieved Nov 10, 2011, from New York Times: http://www.nytimes.com/2011/08/17/business/global/airlines-race-for-slice-of-burgeoning-asia-market.html?_r=2&partner=rss&emc=rss