EXTERNAL ANALYSIS PESTTRS

1. Is Barbie Brand well defined to be successful in the following years? What has to be changed?

When we are going through a company analysis there are 4 main points of view.
Barbie teamwork: from the point of view of marketing dept together with the board of directors, but it
affects all of the other departments.
2. PEST-TRS

• Political
• Economic
• Social
• Technological
• Trends
• References
• Sustainability
3. Business Model Environment
External analysis: factors we can’t control
“Business Model Generation”, Alexander Osterwalder
3.1. Industry Forces (Competitive analysis)
Other businesses who offer similar value propositions to similar customers. These could be existing
competitors, new entrants or substitutes.

Suppliers Incumbents in market’s value Who are main players in the value chain?
and other chain and new emerging players
To what degree business model depends on players?
value chain Are peripheral players emerging?
factors What are the most profitable?
Stakeholders Actors that influence company What investors could influence your business model?
and business model What degree of influence do investors, workers,
government or lobbyists have?
Competitors Incumbent competitors and Who are competitors?
(incumbents) relative strengths Who are main players in our sector?
What are disadvantages or competitive advantage?
Describe main offering. What market segment focus on?
What cost structure do they have?
How do they influence your market segments?
New New speculative players and Who are main players in the market? How do they differ
entrants determine if their business What are disadvantages or competitive advantage?
models is different than yours What barriers must overcome?
What are value propositions?
What market segments focus on?
What cost structure do they have?
How do they influence your market segments?
Substitute Describe possible substitutes for What products or services could replace ours?
products and you offers, including those from How much cost compared to ours?
services other markets and industries What business model tradition do these substitute
products come from?

3.2. Key Trends (foresight)

The evolving parameters of the law, culture and technology, which may change whether an idea is
possible and acceptable.

Technology Ones that could Main techno trends inside and outside the market?
trends jeopardize business Which present opportunities or threats?
model or allow evolution Which new techno peripheral customers are starting to
or improvement use?
Regulatory Ones that affect business What normalizing trends affect your market?
trends model What rules affect BM?
What regulations and taxes affect customer demand?
Societal and Ones that affect business Describe main social trends
cultural trends model What changes in values affect business model?
What trends influence buyer behaviour?
Socioeconomical Ones for your business Main demographic trends?
trends model How to describe distribution of wealth and income in your
market?
What part of population lives in urban areas? and in rural
location?
3.3. Market forces
Our constantly changing customer segment and their expectations

Market issues Key issues driving market form Crucial issues affecting customer landscape?
customer and offer perspective Shifts underway?
Where is marketing heading?
Market Major market segments and What are most important customer segments?
segments their attractiveness, seek new Where is biggest growth potential?
segments Declining segments
Peripheral segments that deserve attention
Needs and Market needs and how well What do customers need?
demands they are served Biggest unsatisfied customer needs?
What customers really want to get done?
Where demand increasing/declining?
Switching Elements related to customers What binds customer to a company?
costs switching business to What switching costs prevent from defecting to
competitors competitors?
Easy for customers to find and purchase similar offers?
How important is the brand?
Revenue Elements related to revenue What are customers really willing to pay?
attractiveness attractiveness and pricing Where can largest margins be achieved?
power Can customer easily ding and purchase cheaper
products and services?

• Girl 5-7: fantasy Barbies (introducing Barbie in the world of the girl)
• Girl 7-10: based on reality Barbie (girl wants to be teacher, hairdresser)
• Girl 10-12: based on aspirations (they find that reality is not ideal)
3.4. Macroeconomic Forces

Global Current general conditions from Economy in a boom or bust phase?

market a macroeconomic perspective General sentiment of the market
conditions GDP growth rate
Commodities Current prices and price trends Current state of market for commodities and other vital
and other for resources needed for your resources
resources business model Easy to obtain necessary resources to execute business
model? What cost?
In what direction prices going?
Capital Current capital market State of capital markets
markets conditions in relation to capital Easy to get funds for your market? Accessible?
needs
Economic Economic infrastructure of your Good public infrastructure of the market?
infrastructure market Individual and corporate taxes high?
Good public resources available to businesses?
Quality of life?
GDP: total value of goods produced and services provided in a country during a year.

We have the power to change strengths and weaknesses.

We have a lot of problems in a company and we have to identify which are the burning and important
ones.
Research has to display the map and the managing team has to identify the important ones.

4. Some examples of external analysis (PESTTS)

4.1. Political-Legal factors
Objectives of legislation in the company
JUSTICE: Protect companies from unfair competition
PROTECTION:

• Protect consumers from unfair business practices

• Protect the interests of society against the purely economic interests of companies
RESPONSIBILITY: Forcing companies to bear the social costs derived from their products or their
production processes
They can determine the rules by which business is conducted, influence or limit organizations and
individuals in a society.

• Laws, Government agencies,

• Pressure of groups of interests,
• Business legislations and regulations (local, national, EU international, export etc…)
• Codes of practice to protect consumer interest
It’s necessary monitoring decisions of parliaments and governments. To know before laws are likely to be
approved

• Ex. Regulations on product standards, its safety, commercial transactions.

• Laws that require recycling
• Eliminate plastic straws
• About advertising regulations; about prices; on its impact on the environment etc
Packaging helps better communicate, it’s like and advertisement (they are huge because of this). But it
produces a lot of waste.  To change it, huge investment.
Turtle with straw in nose advertisement  Straws account for 4% of total plastic water. Big companies like
Starbucks, McDonalds or Ikea are switching to reusable straws
4.2. Economic factors
Factors that affect consumer purchasing power and spending patterns, such as for example:

• Economic growth of countries

• Economies fluctuate according to business cycle/eco downtorn cycle
• Chances in households’’ income
• Different levels for consumers  different spending patterns
Time at work it takes to afford a Big Mac in different parts of the world
4.3. Technological factors
Technological advances are perhaps the most dramatic forces affecting today’s marketing strategies
The technological environment changes rapidly
New technologies create new markets and opportunities.
Every new technology replaces an older technology
Companies have to be alert to changes in technologies because

• A new technology would provide many advantages to customers

• Increase budgets in R&D
• Changes are very fast, so risk of missing out/stay behind
From roll films to digital cameras: Fujifilm
Kodak revolution in photography, for decades were the top in the world (brand that inspired generations).
1st Japanese company could sell cheaper and portable (no longer for huge companies only, also for
households)
The key point was that Fujifilm decided to invest in healthcare and Kodak, to disinvest.
4.4. Social factors
How many people in my household and at
what age
Born in the 60s: Born in parent’s house and die
in husband’s life (only change once).
Born in XXI: Changes a lot, a lot of fluctuation
and instability. Who saw this change and took
advantage? IKEA (every change is a chance for
someone). Successful companies: see in a
change opportunities, not a threat.
4.5. Trends factors
Fashion
A fashion is "expendable and fleeting" and of short duration without any social, economic or political
importance.
Trends
A trend is a direction or sequence of events that occur at a certain time with a certain duration and that
point to a paradigm shift. The trend is more durable and predictable.
It reflects what the future will be like.
According to the futurology company Faith Popcorn, a trend is enduring, can be observed in different areas
of the market and consumer activities, and is consistent with other important indicators that are emerging
or occurring at the same time.
Tell the brands that base their value proposition on these values

• Anchoring: use of ancient practices (homeopathy, yoga, etc.)

• To be alive: Desire for a long and pleasant life
• Exit: Desire for a simpler and less busy life; nostalgia for the country
• Grouping: Need to belong to a group
• Ostrich: Impulse to hide at home
• Juvenilizing: Adolescent behaviour of mature people
• Ergonomics: desire to differentiate by experiences or material goods
• Fantastic Adventures: Emotional Escape
• Androgen: No differentiation by sex
• 99 lives: Activism
• Revenge of pleasure: display of pleasure without limits
• S.O.S: save the planet

Mega trends
They are great economic, social, political and technological changes that are slowly generated but once
produced, they influence us for a certain time, between 7 and 10 years. John Naisbitt.

• The expansion of a global economy

• A renaissance of the arts
• The emergence of a free market
socialism
• Global lifestyles and cultural
nationalism
• The privatization of the Welfare State
• The rise of the Pacific coast countries
 change in maps (no longer Europe
in the centre of the map, now the
Pacific countries)
4.6. Sustainability factors
Patagonia (Yvon Chouinard): first employer that let his employees decide to go to work when they found it
was the best moment. He introduced nursing for his employees’ children.
La Fageda: they introduced disabled workers. Companies started to choose it instead of Danone.