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Outline:

Introduction: Defining Market Research

Practice Activities:

Identify the elements of SWOT.

A Closer Look: VoluntripA History of Voluntrip

2. Create a SWOT Analysis.

INTRODUCTION: Defining Market Research

Market research is commonly confused with marketing research. Market research is the information systematically gathered about specific market industries, competitors, target markets, and customers. It is the data gathered from the researching process. Marketing research is the process of conducting research, or gathering information and data. Market research is one of the key factors in sustaining competitive advantage. Many small businesses tend to forego the process of gathering research because it can be both costly and time consuming to do.

There are two types of market research: primary and secondary. Primary research is research that is collected by a company itself to fulfill a specific need, for example, to identify the number of competitors, customers, market demographics, and so forth. Secondary research is research collected by a source other than the company and can be used for purposes that do not always align with that companys interests. Examples of secondary research include U.S. labor statistics, government census, industry statistics, and trade association research.

When developing a business plan, it is critical for business owners to conduct various types of research including market, economic, industry, competition, product, customers, pricing, and business.

Business research may be internally or externally conducted. When a business conducts internal research, this is referred to as a SWOT analysis. The SWOT analysis is a structured tool for evaluating the four key components of a business: its strengths (S), weaknesses (W), opportunities (O) and threats (T). It is instrumental in specifying projected goals and objectives, as well as in identifying internal and external factors that benefit or hinder a companys market success. Specifically,

Strengths are internal characteristics of the business that give it an advantage over other businesses in the same market or industry.

Weaknesses are internal characteristics of the business that place the business at a disadvantage relative to other businesses in the same market or industry.

Opportunities are external elements in the market or industry that can serve as a competitive advantage.

Threats are external elements in the market or industry that can be problematic for the business.

Strengths and weaknesses are specific to a business (internal), whereas opportunities and threats influence or affect the businesss success in the marketplace (external).

WHY THIS MATTERS: The identification of SWOT is important to a business as each item should be assessed in line with stated company goals and objectives. Additionally, SWOT can be used in the planning process (strategic, tactical, and operational). Utilizing the SWOT analysis, business owners and decision makers of the company are then able to assess whether a goal or objective is attainable. If the goal or objective is not attainable, then the goal or objective must be reassessed and removed from the businesss strategic vision.

Strengths and weaknesses are internal to the company and can be directly managed by the company, while opportunities and threats are external and can only be anticipated and reacted to by the company. A comprehensive SWOT analysis helps a business understand what they are doing well (strengths), identify the areas in which the business can improve (weaknesses), and identify where the business fits in the competitive landscape (opportunities and threats).

YOUR TASK: Demonstrate your understanding of the different elements of a SWOT analysis and how it is used as a tool for marketing research by completing the activities that follow.

1. Practice: Identify the elements of SWOT

Following is a list of general company characteristics. Read each characteristic carefully and determine whether it is a strength, weakness, opportunity, or threat. Select the appropriate label from the drop-down.

1. Higher debt-to-income ratio: This may put the firm at potential financial risk.

multiple choice 1

Strength

Weakness

Opportunity

Threat

2. Increased government regulations: Restrictions may impact how the firm does business.

multiple choice 2

Strength

Weakness

Opportunity

Threat

3. Market demand for new products: This indicates a chance to offer what other firms do not.

multiple choice 3

Strength

Weakness

Opportunity

Threat

4. Profits in excess of $10M annually: This shows potential company growth.

multiple choice 4

Strength

Weakness

Opportunity

Threat

5. Competitors have exited the market: This allows the firm to meet an unfulfilled market segment.

multiple choice 5

Strength

Weakness

Opportunity

Threat

6. More than 1,000 employees: This shows that people like to work with this company.

multiple choice 6

Strength

Weakness

Opportunity

Threat

7. New competitive product introductions: New competing products may take business away.

multiple choice 7

Strength

Weakness

Opportunity

Threat

8. Heavily diversified product mix: Too many product offers may result in not one selling enough to make a profit.

multiple choice 8

Strength

Weakness

Opportunity

Threat

9. Effective corporate social responsibility projects: This shows the company cares about the impact of its actions upon society.

multiple choice 9

Strength

Weakness

Opportunity

Threat

10. Decreases in cost of raw materials: This allows the firm to reallocate funds toward other areas that need them.

multiple choice 10

Strength

Weakness

Opportunity

Threat

11. Increased customer complaints: The firm may risk a decrease in the customer base resulting in potential loss of profit.

multiple choice 11

Strength

Weakness

Opportunity

Threat

12. Subpar working relationships with suppliers: This may raise potential human resources concerns.

multiple choice 12

Strength

Weakness

Opportunity

Threat

13. Investment in R&D below industry standards: This could impact the ability of the firm to produce new produces.

multiple choice 13

Strength

Weakness

Opportunity

Threat

14. Rising pay levels: The firm may not be able to afford to run its business if it has to increase employees salaries.

multiple choice 14

Strength

Weakness

Opportunity

Threat

15. Growth in online purchases: This presents a new market segment for the firm.

multiple choice 15

Strength

Weakness

Opportunity

Threat

16. Innovative product offerings: This shows the company is on trend.

multiple choice 16

Strength

Weakness

Opportunity

Threat