1. Chapter 3 The External Assessment
ENVIRONMENTAL ANALYSIS
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2. Special Interest Groups
Key External Forces & the Organization
Beyond control of organization!
Competitors
Suppliers
Distributors
Creditors
Customers
Employees
Communities
Managers
Stockholders
Labor Unions
Special Interest Groups
Products
Services
Key
External
Forces
Opportunities
&
Threats
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3. Long-term orientation Applicable to competing firms
Performing External Audit
Long-term orientation
External Factors
Measurable
Applicable to competing firms
Hierarchical
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4. Porter’s Five Forces Potential development of substitute products
Rivalry among
competing firms
Bargaining power
of suppliers
Bargaining power
of consumers
Potential entry of new competitors
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5. The Five-Forces Model of Competition (Porter)
Potential development
of substitute products
Rivalry among
competing firms
Bargaining power
of suppliers
Bargaining power
of consumers
Potential entry of new competitors
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6. Industry Analysis: The External Factor Evaluation (EFE) Matrix
Summarize & Evaluate
Competitive
Political
Cultural
Technological
Environmental
Social
Governmental
Demographic
Economic
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7. Copyright 2007 Prentice Hall

8. Weekend Exercise for Intuit
External Factors
It’s hard to write them!
Weekend Exercise for Intuit
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9. Total weighted score of 4.0
Industry Analysis EFE
Total weighted score of 4.0
Organization response is outstanding to threats and weaknesses
Total weighted score of 1.0
Firm’s strategies not capitalizing on opportunities or avoiding threats
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10. Industry Analysis: Competitive Profile Matrix (CPM)
Identifies firm’s major competitors and their strengths & weaknesses in relation to a sample firm’s strategic positions
Copyright 2007 Prentice Hall

11. CSF’s Gateway Apple Dell Market share 0.15 3 0.45 2 0.30 4 0.60Wt
Rating
Wt’d Score
Market share
0.15 3
0.45 2
0.30 4
0.60
Inventory sys
0.08
0.16
0.32
Fin. position
0.10
0.20
Prod. Quality
0.24
Cons. Loyalty
0.02
0.06
Sales Distr
Global Exp.
Org. Structure
0.05
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12. Gateway Apple Dell CSF’s (cont’d) Prod. Capacity 0.04 3 0.12Wt
Rating
Wt’d Score
Prod. Capacity
0.04 3
0.12
E-commerce
0.10
0.30
Customer Serv 2
0.20 4
0.40
Price competitive
0.02
0.08 1
0.06
Mgt. experience
0.01
Total
1.00
2.83
2.47
3.49
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13. UST—Key External Factors
.20 1
Clinton Administration 2
.10
Bad media exposure from FDA
.05
Smokeless market SE region U.S.
.15 3
Production limits on tobacco
Legislation against the tobacco industry
Threats
.30
More social pressure to quit smoking
2.10
1.00
TOTAL
.60 4
Pinkerton leader in discount market
Astronomical Internet growth
Increased demand
Global markets untapped
Weighted
score
Rating
Weight
UST—Key External Factors
Opportunities
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14. (CPM) Procter
Avon L’Oreal & Gamble
2.80
3.25
3.15
1.00
Total
0.15 3
0.20 4
0.05 1
Market Share
0.40 2
0.80
Global Expansion
0.10
Customer Loyalty
0.45
0.60
Financial Position
0.30
Management
Price Competition
Product Quality
Advertising
Score
Rating
Weight
Critical Success Factor
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15. Mission Statement (proposed)
Our mission is to provide cruise and travel services (2) to travelers worldwide (1, 3), to develop household name brand awareness, to respect and protect the earth and seas on which we sail (6), to serve the communities in which our consumers and employees reside (8,9), and to stay an innovator by bringing cutting edge technology and research for our consumer’s benefit (4). We recognize that we must stay financially solvent and must make those decisions that will capitalize on opportunities for growth and longevity (5). We believe we must exceed every consumer’s expectations, supplying lasting memories, and enticing repeat business all at a fair value. We recruit, compensate and retain the best staff and ship employees in the business (7, 9).
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16. Competitive Profile Matrix – Royal Caribbean
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17. EFE Matrix
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