Final answer:
In creating a marketing plan, a firm assesses its competition when it examines its current situation, which is pivotal for understanding market structure and the competitive landscape.
Step-by-step explanation:
In the creation of a marketing plan, a firm assesses its competition during the phase where it examines its current situation. This stage is crucial for understanding the industry landscape, as it involves exploring market structure and identifying both direct and indirect competitors. A meticulous evaluation of the competition's strengths and weaknesses enables the firm to strategize effectively, potentially leveraging its own competitive advantages or identifying areas for improvement.
Essential questions that a firm may ask during this stage include:
- How much market power does each firm in the industry possess?
- How similar is our product to the products of other firms in the industry?
- How difficult is it for new firms to enter the industry?
These considerations are decisive in shaping the firm's decisions relating to:
- Product selection
- Production processes
- Output levels
- Pricing strategies
- Labor requirements
Understanding these elements is essential for the firm to position itself competitively in the marketplace and develop a robust marketing strategy.