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After scanning the external situation, the company finds out the current situation of market in form of market potential, demand, competition, customers and suppliers. what are the opportunities and threats in the current market.by scanning the internal situation, the company finds out its weakness and strength points.
by analysing the derived results from both internal and external analysis, the company is able to position its strategy in terms of the market situation and its potential in this market.
Strategic positions emerge from three distinct sources, which are not mutually exclusive and often overlap.
1. Variety-based positioning
Positioning can be based on producing a subset of an industry’s products or services. It is called variety-based positioning because it is based on the choice of product or service varieties rather than customer segments. Variety-based positioning makes economic sense when a company can best produce particular products or services using distinctive sets of activities.A variety-based positioning can serve a wide array of customers, but for most it will meet only a subset of their needs.
2. Need-based positioning
A second basis for positioning is that of serving most or all the needs of a particular group of customers. It comes closer to traditional thinking about targeting a segment of customers. It arises when there are groups of customers with differing needs, and when a tailored set of activities can serve those needs best. Some groups of customers are more price sensitive than others, demand different product features, and need varying amounts of information, support, and services. A variant of needs-based positioning arises when the same customer has different needs on different occasions or for different types of transactions.
It is intuitive for most managers to conceive of their business in terms of the customers’ needs they are meeting. But a critical element of needs-based positioning is not at all intuitive and is often overlooked. Differences in needs will not translate into meaningful positions unless the best set of activities to satisfy them also differs. If that were not the case, every competitor could meet those same needs, and there would be nothing unique or valuable about the positioning.
3. Access-based positioning
The third basis for positioning is that of segmenting customers who are accessible in different ways. Although their needs are similar to those of other customers, the best configuration of activities to reach them is different. Access can be a function of customer geography or customer scale—or of anything that requires a different set of activities to reach customers in the best way.
Rural versus urban-based customers are one example of access driving differences in activities. Serving small rather than large customers or densely rather than sparsely situated customers are other examples in which the best way to configure marketing, order processing, logistics, and after-sale service activities to meet the similar needs of distinct groups will often differ.
I agree with Akbar Bakhshmand, external swot analysis shows you loopholes in the market and internal swot analysis highlights yours company's strengths. If your strength/strengthss 'can' be utilised to capture that gap all you need to do is formulate a strategic plan that uses yours strength to bridge that gap.
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