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1.4 Methods of research
The major research methods used in this paper:
(1) STP analysis(Kotler. P. ＆ Armstrong. G., 2011, p216-p233). STP is pided into three levels, the first level is market segmentation, the second level is market targeting, and the last level is market positioning. The main reason of using STP analysis is to help Xinchen company to find the target market, and STP analysis is the most effective way to analyze target market.
Market segmentation refers to customers classification according to certain characteristic. Customers with the same characteristic are called a segmentation. The standards of segmentation generally have three types, including service types, organization and decision-making according to customer needs.
Market Targeting is to evaluate the different attractions of market segmentation and accordingly choose to serve the target customers.
Market positioning refers to the action that service agencies involve their provided services into the selected target customers.
(2) The five-strength model proposed by Michael Porter considers that there are five kinds of strength that decide the competition scale and extent of the industry, and the five strengths together affect the attractiveness of the industry. It is an effective tool to analyze the characteristics of industry competition. The five forces involved in the model include the threat of new entrants, the threat of substitutes, the bargaining power of the seller, the bargaining power of the buyer, and the existing competitors in the industry. Five-strength model will collect a large number of different factors together in a simple model, in order to analyze the basic competitive situation in an industry. Compared with other environment analysis, the Five-strength model is more comprehensive and micromesh, and more suitable for enterprise.
(3) SWOT analysis (Strength, Weakness, Opportunity, Threat) is used to find the company’s short board by listing the internal conditions (advantages and disadvantages) and the external environment (opportunities) of Xinchen Floor. Combined with the business objectives, SWOT analysis makes a comprehensive analysis of the external environment and threats and internal strengths and weaknesses. In addition, it makes a systematic evaluation of the company’s alternative options, and ultimately it will develop a correct business strategy. Finally, it can help Xinchen company to make a correct business strategy.