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Last time, I took you through the basics of situational analysis, and introduced you to frameworks for analysing your micro environment: SWOT and SWOTELL.
Now, it's time to get into the macro factors. Here, I'll show you how the PESTLE framework can help you to understand your campaign's wider environment. Then I'll dive into competitor and strategy analysis with the COMPETE and VRIO frameworks.
For your campaign to have a fighting chance of succeeding, you need to be prepared. SWOT, SWOTELL, PESTLE, COMPETE, and VRIO will prepare you for whatever the world might, and will, throw at it.
PESTLE analysis
PESTLE is a well known acronym highlighting the major external factors affecting your campaign:
- Political. Regulations, governmental policies, political events such as elections, instability, protests and war.
- Economic. Market trends, import and export regulations, taxes, interest.
- Socio-cultural. Wealth distribution, current trends, education, lifestyles, cultural attitudes.
- Technological. Relevant tech, for example what platform or device people will use to access your campaign, plus technological awareness, automation, innovation and R&D.
- Legal. Relevant laws such as data protection, antitrust legislation and licences.
- Environmental. Weather, climate, and consumer attitudes to the environment and corporate ethics.
Usually, there is not much you can do to change these factors. But it's still important to understand them.
In 2018, Nike adopted American football player Colin Kaepernick as their figurehead, at a point when he had become a controversial figure. Hiring a polarising figure was a brave move, and it could have backfired had the marketing team not done a thorough PESTLE analysis. By using PESTLE, Nike were able to manoeuvre their way through a complex socio-political environment and come out with a sensitive, profound, and valuable message. Consumers responded well, and Nike's stock price hit an all-time high.
Contrast this with Pepsi, a year earlier. In 2017, a now infamous advert leaned on political tension in order to make a point and sell the product. Unlike Nike, they hadn't conducted a proper PESTLE analysis, and so didn't have the deep understanding of the social and political environment into which the campaign would be released. The ad was pulled and a public apology followed.
COMPETE analysis
There's another major factor that will impact your campaign: your competitors. Understanding your competitors is crucial to building yourself a competitive advantage.
To help you analyse your competition, I recommend the COMPETE framework:
- Current operators. Who are your competitors?
- Offering. What are your competitors providing?
- Market share. How is the market divided between your competitors?
- Price. What pricing strategies do your competitors have?
- Expertise. How long has each competitor existed? How respected and well known are they in the industry?
- Target. Who are your competitors targeting? What are their ideal consumer personas and profiles?
- Employees. Is their workforce skilled and experienced? What can their employees provide that yours cannot, and the other way round?
This framework provides a detailed overview of both your competitors and your marketplace. You'll gain a greater understanding of your position in the market, niches you could move into, ways you can grab a competitive advantage, and major competitors to watch out for.
VRIO analysis
Finally, it's time to analyse your strategy itself. I like to use the VRIO framework for this. It asks the hard questions about whether your strategy is actually viable.
- Value. Does your offering add value for your customers? If the answer is no, you won't have a competitive advantage. Go back and figure out how to make your offering valuable and unique.
- Rarity. Do you control or have access to scarce skills, resources, or capabilities? If so, your competitors will find it hard to match your offering.
- Imitability. How easy is it to copy your organisational structure, product or strategy? If what you're doing is too easy to copy, you will quickly lose your advantage. Work on differentiating yourself.
- Organisation. Is your company organised? Can you efficiently capitalise on the resources available to you? If so, you are in a great position to secure a competitive advantage.
Once you've established a valuable, rare, unique, and organised offering, you're well on your way to success.
