External Analysis CEA Industry Growth Rate 9 Ease of entry of new firms 8 Intensity of competition 6 Product substitutability 8 Dependency on supporting products 6 Customer bargaining power 7 Vendor bargaining power 5 Technological sophistication 8 Rate of innovation in industry 9 Industry management capabilities 3 Average 6.9 EFE ( IAA Growth Potential 9 Ease of entry of new firms 3 Ease of exit 8 Market Diversity 8 Profitability 5 Vulnerability 4 Concentration 7 Product Sales 6 Specialization 5 Brand Identification 6 Distribution 7 Price Policy 4 Cost Position 4 Service 8 Technology 7 Integration 7 Average 6.125 Score 98 ##### Sheet/List 2 ##### Score the following factors on a scale of 1 to 10 Factors related to Environmental Stability Score Product substitutability 2 Use CEA Score Price elasticity of demand 2 If elasticity is high score low Intensity of competition 3 Use CEA Score Dependancy on supporting products 4 Use CEA Score Governmental regulations 3 "If regulations have a negative impact score low, positive or no impact score high." Capital market access 8 "High access = high score, low access = low score." Barriers to entry into market 5 Use 10 - CEA score Industry management capabilities 6 Use 10 - CEA score Rate of innovation in industry 5 Use CEA score Demand variability 4 If highly cyclical or variable then score low Overall environmental vulnerability 9 "Social, political aspects of the environment (tabacco industry would score low)" Customer bargaining power 4 Use CEA Score Factors related to Industry Strength Score Industry Growth Rate 7 Use CEA Score Entry of new firms 6 If many firms are entering or have entered then score high. Dependency on supporting products 7 Use CEA Score Technological sophistication 8 Use CEA Score Vendor bargaining power 7 Use CEA Score Capital intensity 8 High capital intensity then high score Life cycle affects 8 "Intro = 1-4, growth = 3 - 10, maturity = 6-9, decline = 6-0 " Normalized cost structure/profitability in industry 6 "Unstable cost structure + poor profitability = low, Highly stable cost structure + profits = high" Financial stability of top 20% of competitors 8 "Strong then score high, weak then score low" Industry productivity/capacity utilization 8 "High = high, low = low" Average industry resource utilization 8 "High = high, low = low" Factors determining financial strength Score Each factor must be considered with respect to the competition. Ability to sustain effort in cyclic demand 8 "Use CCP data / 10, compare to industry leaders" Stability of costs 3 "Use CCP data / 10, compare to industry leaders" Corporate capital structure 6 Calculated and compared to industry Ability to compete on prices 4 "Use CCP data / 10, compare to industry leaders" "Degree of leverage, financial stability" 2 "Use CCP data / 10, compare to industry leaders" "Liquidity, available internal funds" 3 "Use CCP data / 10, compare to industry leaders" "Profitability, return on investment" 3 "Use CCP data / 10, compare to industry leaders" Ease of exit from the market 1 "Use CCP data / 10, compare to industry leaders" Interest coverage 3 Calculated and compared to industry Access to capital when required 2 "Use CCP data / 10, compare to industry leaders" Average collection period 3 Calculated and compared to industry Factors determining competitive advantage Score Each factor must be considered with respect to the competition. Ability to take advantage of Growth potential 8.1 Use IAA score compared to competition Vulnerability 8.1 "Use vulnerability map to determine, compare to competition" Product/brand recognition or identity 8.1 "Use IAA score, compare with competition" Management capability 8.1 Use CCP data if competition data not available Brand loyalty 8.1 Use CCP data if competition data not available Competitive capacity 8.1 Use CCP data if competition data not available Technical capability 8.1 Use CCP data if competition data not available Product life cycle effect 7 Determine from life cycle analysis by comparing with industry and competition IFE indicator 7.55 IFE number X 2.5 compared to competition Integration 7 Use IAA score compared to competition ##### Sheet/List 3 ##### Factors determining competitive advantage: Factors determining environmental stability: Ability to take advantage of Growth potential 4.86 Product substitutability 1.2 Vulnerability 4.86 Price elasticity of demand 1.2 Product/brand recognition or identity 4.86 Intensity of competition 1.8 Management capability 4.86 Dependancy on supporting products 2.4 Brand loyalty 4.86 Governmental regulations 1.8 Competitive capacity 4.86 Capital market access 4.8 Technical capability 4.86 Barriers to entry into market 3 Product life cycle effect 4.2 Industry management capabilities 3.6 IFE indicator 4.53 Rate of innovation in industry 3 Integration 4.2 Demand variability 2.4 Overall environmental vulnerability 5.4 Customer bargaining power 2.4 Total: 46.95 Total: 30.6 Average: 4.7 Average: 2.8 Average - 6 = -1.3 Average - 6 = -3.25 Factors determining industry strength: Factors determining financial strength: Industry Growth Rate 4.2 Ability to sustain effort in cyclic demand 4.8 Entry of new firms 3.6 Stability of costs 1.8 Dependency on supporting products 4.2 Corporate capital structure 3.6 Technological sophistication 4.8 Ability to compete on prices 2.4 Vendor bargaining power 4.2 "Degree of leverage, financial stability" 1.2 Capital intensity 4.8 "Liquidity, available internal funds" 1.8 Life cycle affects 4.8 "Profitability, return on investment" 1.8 Normalized cost structure/profitability in industry 3.6 Ease of exit from the market 0.6 Financial stability of top 20% of competitors 4.8 Interest coverage 1.8 Industry productivity/capacity utilization 4.8 Access to capital when required 1.2 Average industry resource utilization 4.8 Average collection period 1.8 Total: 48.6 Total 22.8 Average: 4.418181818 Average 2.07 X Y Factors determining financial strength: 0 2.1 Factors determining industry strength: 4.418181818 0 Factors determining environmental stability: 0 -3.25 Factors determining competitive advantage: -1.3 0 Factors determining financial strength: 0 2.1 0 0 3.1 -1.2 Final combined placement is at: "3.11,-1.18" 3.326334319 1.80378742 0 0 Final generic vector ends at: 5.609778877 -2.128469156