Chapter 3 - Discussion

1. Of the many competitors you have, which firm do you think worries your business most? Why
Michelin most about? Why? Prepare a Competitive Profile Matrix (CPM) that includes your company and
the rival firm of yours.

2. Identify two companies that you think would have a 1.5 total weighted score on their EFE Matrix.
Why? Identify two companies that would have a 3.5 total weighted score on their EFE Matrix. Why?

The total score of 2.5 is an average. The result of a low score in the external rating indicates that a
company’s strategies aren’t properly set up to fully utilize the opportunities and protect against threats. A
low score for the internal rating indicates that the company is weaker compared to its competitors.

Two companies would have a 1.5 total weighted score: Dr.Pepper, 100plus
Why: their customer not loyal to the brand and they did not have competing price
Two companies would have a 3.5 total weighted score: Coca-Cola, Pepsi
Why: they are the famous beverage brand and they have consistent supplier, proactive advertising

3. List the 10 key external forces that give rise to opportunities and threats. Give a specific example of
each force, for your college or university.
Economic forces - availability of credit, unemployment trends, gross domestic product (GDP) trends,
price fluctuations
Social, cultural, demographic, and environment (SCDE) forces - attitudes toward product quality,
population changes by race, age, and geographic area, per-capita income, immigration and emigration
rates
Political, legal, and governmental forces - local, state, and federal laws, protectionist actions by
countries, import–export regulations
Technological forces - production techniques, information and communication resources, production,
logistics, marketing, and e-commerce technologies
Competitive forces - strengths and weaknesses of our major competitors, products and services do we
offer that are unique in the industry, objectives and strategies of our major competitors

4. Give four reasons why you agree or do not agree with I/O theorists.
The I/O approach to competitive advantage advocates that external factors are more important than
internal factors in a firm achieving competitive advantage. Proponents of the I/O view contend that
organizational performance will be primarily determined by industry forces that no single firm can
control. I/O theorists contend that external factors -- such as economies of scale, barriers to market entry,
product differentiation, the economy, and level of competitiveness -- are most important that internal
resources, capabilities, structure, and operations. Competitive advantage is determined largely by
competitive positioning within an industry, according to I/O advocates. The authors contend that effective
integration of both external and internal factors is the key to securing and keeping a competitive
advantage

5. Regarding economic variables, list in order of importance six specific factors that you feel greatly
impact your college or university.
- Level of disposable income
- Gross domestic product (GDP) trends
- Consumption patterns
- Unemployment trends
- Demand shifts for different goods and services
- Income differences by region and consumer groups

6. Regarding social, cultural, demographic, and natural environment variables, list in order of importance
six specific factors that you feel most greatly impact your college or university.
- Population changes by race, age, and geographic area
- Regional changes in tastes and preferences
- Social-media pervasiveness
- Attitudes toward pursue study
- Attitudes toward product quality
- Social programs

7. Regarding political, governmental, and legal variables, list in order of importance six specific factors
that you feel most greatly impact your college or university.
- Protectionist actions by countries
- Tariffs
- Local, state, and national elections
- Environmental regulations
- Malaysia vs. other country relationships
- Equal employment laws

8. Choose any four industries and explain how wireless technology is impacting four industries.
- consumer goods manufacturing - improve production by eliminating downtime
- automotive - offer a way to cost-effectively add video information to the control and monitoring system
- pharmaceutical - monitor the condition and quality of the medicines
- food processing - improve production by eliminating downtime
- material handling - communication to controllers on moving platforms
9. Discuss the pros and cons of gathering and assimilating competitive intelligence.
Pros:
- helps businesses understand their competitive environment and the opportunities and challenges
- company can plan out how to sustain in the market and stand up to their competitors
- easier to understand the strengths and weaknesses of your competition
Cons:
- CI team is in misalignment with key business initiatives
- CI not customized to the stakeholder
- CI not delivered in a timely Manner

10. Using Porter’s Five-Forces Model, explain competitiveness for a local fast food restaurant.
- Rivalry among competing firms – High: The restaurant industry is reshaping and reinventing itself.
Existing restaurants struggle with maintaining their prestige and competitive advantage. There were
others foreign fast food restaurant franchise
- Potential Entry of New Competitors – Low: There are no specific and complex regulations. Everyone
can cook even if they are not skilled and qualified cooks/chefs. Local fast food restaurant do not require
high capital investments.
- Bargaining power of suppliers – low Potentially: Going dark alongside the domination of takeaway
services lowers the potential power of suppliers to use restaurant branding for price and quality as means
of pressure.
- Potential development of substitute products – potentially: We can consider the restaurant industry's
substitutes as Home-Cooking and Private-chefs services. These two trends are growing alongside the
growth of the Takeaways. The more culture changes, prices change, and food quality does not satisfy the
customers' tastes and preferences, the more people tend to grow and cook their foods.
- Bargaining power of consumers – low potentially: There are many buyers, the switching cost does not
seem to change for a higher level, and price sensitivity would stay as high as nowadays. We might witness
a growing pressure of buyers on the foodservice companies and delivery companies

11. Identify an industry in which “bargaining power of suppliers” is the most important factor among
Porter’s variables.
In the airline industry, only two significant suppliers exist. Airbus and Boeing control the fuel prices.
Thus, the bargaining power of suppliers in the airline industry is very high. A strong supplier may affect
the profitability and quality of products

12. Develop an EFE Matrix for your proposed business.

13. Distinguish between ratings and weights in an EFE Matrix.

The ratings in an EFE Matrix are often based on the effectiveness of the organization’s strategies, whereas
the weights in an EFE Matrix are based in the industry. In order to determine the weighted score, the
factor's weight must be multiplied by its rating.

14. List 10 external trends or facts pertaining specifically to your country that would impact companies in
your city.
- Increasing adoption of new technology
- The increasing availability of big data
- advances in mobile internet
- advances in artificial intelligence (AI)
- advances in cloud technology
- shifts in national economic growth
- expansion of affluence in developing economies
- expansion of education
- advances in new energy supplies & technologies
- expansion of the middle class

15. Your boss develops an EFE Matrix that includes 54 factors. How would you suggest reducing the
number of factors to 20?
Companies can't do everything they want to so you have to narrow it down to 20

Put the most important things first, to turn 54 into 20 write them down and pass out a copy to everyone,
and use checkpoints, everyone writes their top 20.) 54 factors is not manageable.

20 is a random but more realistic number - basically survey the panel to pick their top concerns (rank
them) and then analyze based of the responses given in order to prioritize.

16. Cooperating with competitors is becoming more common. What are the advantages and disadvantages
of this for a company?
Advantages:
- can provide access to data, analytics, trends, and new resources that are mutually beneficial.
Working together can help identify new sales opportunities, promote cross-selling, and coordinated
marketing promotions.
- Collaborating with your competitors entails a give-and-take relationship. It can benefit your retail
business well, as it means you can have a way to cover an area of weakness you could not handle before.

Disadvantage:
- “too much” coopetition could create tension such as conflict and power imbalance with their
competitors because they cannot differentiate between the opposing forces of cooperativeness and
competitiveness.
- “too much” coopetition can lose certain point of difference or competitive advantage as they may
share excessive quantities of information with rival firm.