INDUSTRY ANALYSIS

1. Environmental Scanning and Industry Analysis

7. External Environment

10. Societal Environment Important Variables Economic GDP trends Interest rates Money supply Inflation rates Unemployment levels Wage/price controls Devaluation/revaluation Energy availability and cost Disposable and discretionary income Technological Total government spending for R&D Total industry spending for R&D Focus of technological efforts Patent protection New products New developments in technology transfer from lab to marketplace Productivity improvements through automation Political-Legal Antitrust regulations Environmental protection laws Tax laws Special incentives Foreign trade regulations Attitudes toward foreign companies Laws on hiring and promotion Stability of government Sociocultural Lifestyle changes Career expectations Consumer activism Rate of family formation Growth rate of population Age distribution of population Regional shifts in population Life expectancies Birth rates

14. Issues Priority Matrix High Priority High Priority High Priority Medium Priority Medium Priority Medium Priority Probable Impact on Corporation Low Priority Low Priority Low Priority Low Medium High Medium High Low Probability of Occurrence

17. Industry Analysis

33. Industry Matrix Key Success Factors Weight Company A Rating Company A Weighted Score Company B Rating Company B Weighted Score 1 2 3 4 5 6 Total 1.00

35. External Factor Analysis Summary (EFAS) External Factors Weight Rating Weighted Score Comments 1 2 3 4 5 1.00 Opportunities Threats Total Weighted Score Notes: 1. List opportunities and threats (5–10) in column 1. 2. Weight each factor from 1.0 (Most Important) to 0.0 (Not Important) in Column 2 based on that factor’s probable impact on the company’s strategic position. The total weights must sum to 1.00. 3. Rate each factor from 5 (Outstanding) to 1 (Poor) in Column 3 based on the company’s response to that factor. 4. Multiply each factor’s weight times its rating to obtain each factor’s weighted score in Column 4. 5. Use Column 5 (comments) for rationale used for each factor. 6. Add the weighted scores to obtain the total weighted score for the company in Column 4. This tells how well the company is responding to the strategic factors in its external environment. Source: T. L. Wheelen and J. D. Hunger, “External Strategic Factors Analysis Summary (EFAS).” Copyright © 1991 by Wheelen and Hunger Associates. Reprinted by permission.

36. External Factor Analysis Summary (EFAS) Maytag Example External Factors Weight Rating Weighted Score Comments 1.00 Opportunities • Economic integration of European Community • Demographics favor quality appliances • Economic development of Asia • Opening of Eastern Europe • Trend to “Super Stores” Threats • Increasing government regulations • Strong U.S. competition • Whirlpool and Electrolux strong globally • New product advances • Japanese appliance companies Total Scores .20 .10 .05 .05 .10 .10 .10 .15 .05 .10 4 5 1 2 2 4 4 3 1 2 .80 .50 .05 .10 .20 .40 .40 .45 .05 .20 Acquisition of Hoover Maytag quality Low Maytag presence Will take time Maytag weak in this channel Well positioned Well positioned Hoover weak globally Questionable Only Asian presence is Australia 3.15 1 2 3 4 5