Question

Critically discuss how important is the evaluation of micro and macro environmental forces for marketing effectiveness. Choose an organization and describe how the selected organization is using effective strategies based on micro and macro analysis.

Answer 1

Micro and macroeconomic factors are extremely critical as they help firm in devising the right marketing strategies after evaluation of political factirs, economic factors and how each can cause customers losses and revenue lossess.

Firms like Samsung conduct complete macroeconomic and competitive analysis as belows :

Five Forces Analysis:

Bargaining power of Suppliers - Many suppliers in this segments offer low cost services which means bargaining power is less for suppliers.

Bargaining power of buyers- Sijce Samsung operates either in perfectly competitive market or Oligopolistic market across globe, buyers have higher choices and hence higher power.

Threat of New Entrants- Since new entries from lowcost Chinese providers can eat up Samsungs share due to ease of taxation and licensing, threat is higher substantially.

Threat of rivalry between existing firms- This is comparatively very high as margins are wafee thin and innovation is constantly evolving making it difficult for the industry as whole.

Barriers to entry- Large initial investment, high marketing and distribution spends, constant innovation are biggest barriers.

Pestel Analysis :

Political - India, South and North Korea ar emost errant markets with high taxation and compliance and warfare tensions.

Economic - global economic degrowth and stagnant growth in mature markets is cause for worry.

Socio cultural - changing consumers preference and strong core culture is what Samsung has coped up with and reoriented itself across global markets to stay ahead of curve.

Technological - Wide-spread innovative solutions from competitors like Apple, Huawei, Vivo, Oppo, Xiaomi have threatened Samsung and portfolios. However Samsung has been fast mover and easily stays ahead of curve with its unparalleled premium segment and upscale technologies which competitors match too lately.

Legal- the recall of Samsung S9 has been highest litigation based loss because of malfunctioning and lack of quality checks and also copyright infringement issues with Apple make it very cumbersome and difficult to deal with.

Environmental - the organisations has been keen ethical player and truly abides environmental laws.

Strengths

Global brand image

Economies of scale and cost leadership

Highest patent growth

Innovation and design capability

Weakness

High dependent on OEM

Product cannibalization due to less differentiation

Focus majorly on high prices and premium segment

Opportunity

Tieups with Telecommunications operators for handset SIM selling

Focus on rural markets

Focus on low price segment

Focussing on diversified products like smartwatches, IoT products, Smart sensors, Smart devices

Threat

Chinese products and hypercompetition

Uncertainty in government policies

High taxation

Retail markets collaboration with low cost players and private labels.

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