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Introduction
Under the competitive and dramatically changing environment, some companies are
successful but some are failed. Considering the reasons are various, however, offering the
right products for the right growth markets at the right time is the key factor for some of
the successful companies. Chinese idiom says know the enemy and know yourself, and
you can fight a hundred battles with no danger of defeat. Hence, the company must make
marketing plan systematically, in terms of its objectives and missions, if it pursues
maintaining a high level of operating efficiency, and achieving above-average returns.
The role of situation analysis
Situation analysis is an essential first step in the process of marketing plan. Jain (2004)
states situation analysis is an important way in terms of forecasting the shape of things,
analyzing strategic alternatives and developing greater sensitivity to long-term
implications.
Situation analysis takes account of three key forces: the customer, the competition, and the
corporation. (Jain, 2004, p25) Jain (2004) explained the role of situation analysis is to (1)
make a clear market definition; (2) make a good match between corporate strengths and
the needs of the market; and (3) perform superior to the competitions in the key success
factors of the business. Based on the three Cs, situation analysis indicates three decisions:
where, how, and when to compete. Thus, without the reflection on the changing
environment and the developing business system, as well as the ability of coping with
three decisions at the same time, no one, including shareholder, will profit in the long run,
even if these corporations at one time controlled huge resources, dominated their market,
and had the high-skill workers. Hence, the situation analysis plays a key role in the
successful business. It is the process that firm can match its own capabilities with the
opportunities in order to fulfill customers needs better than the competition.
(http://www.netmba.com/marketing/process/) Thus, the results of an effective situation
analysis direct firms development, strengthen its competitive advantage, and expand its
above-average returns.
External environment
Hanson & Dowling (2005) suggest the external environment influences the firms strategic
options, as well as the growth and profitability. In order to achieve competitiveness and
earn above average returns, marketing managers should be aware of the different
dimensions of the external environment, which are divided into competition, economic
growth and stability, political trends, legal and regulatory issues, technological
advancements, and socio-cultural trends. (http://ferrel.swlearning.com)
Competition
Competition is various, which may from products or sources either within or outside
