Transcript Analysis Tools - Hale

Analysis Tools
SWOT, PEST+C,
Porter’s 5 Forces,
BCG Matrix
SWOT Analysis
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Strengths and Weaknesses (internal)
Opportunities and Threats (external)
Strengths
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Company’s sustainable competitive
advantage
Excellent employees
Strong market share
Reputation
New products and technologies
Good financing
Weaknesses
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Old equipment and technology
Minimal R&D
Poor planning
Reputation
Poor management
Opportunities
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New markets
Economy
Poor competition
Growth strategy
Possible new technology
Threats
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New competitors
Lack of resources
Government regulations
Substitute products
Changing market preferences
PEST+C
Analysis of the Environment
Politics
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Three levels of government—municipal,
provincial and federal
Taxes
Crown corporations
Laws
International governments
Economic
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Stage in business cycle
Interest rate
Canadian $
Inflation rate
Unemployment rate
Supplier power
Buyer power
Stage in product life cycle
Social
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Demographic changes
Lifestyle changes
Social values
Technology
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Available technology
Creation of new technology
Use of information technology
Using technology to create new products or
processes
Competition
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What is the competition doing?
State and evaluate each major competitor
Porter’s 5 Forces
Porter’s 5 Forces
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Threat of New Entrants
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Industry Rivalry
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Is there an alternative to the product/service offered by you and
your competitors?
Buyer Power
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Is there a lot of competition?
Threat of Substitutes
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How easy is it to get into your market?
Do your customers absolutely need your product/service? Do they
have other options? Do they have any negotiating power?
Supplier Power
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How important is your business to your supplier(s)? Do you have
any negotiating power?
The Boston Consulting Group Matrix
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Used to analyze a company’s portfolio of
different products/services
Goal is to have a portfolio of products that
contains both high-growth products in need
of cash inputs and low-growth products that
generate a lot of cash
The BCG Matrix
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2 dimensions: market share and market
growth
Basic idea: the bigger the market share a
product has or the faster the product's
market grows, the better it is for the company
Cash Cow
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A business unit that has a large market share
in a mature, slow growing industry
Cash cows require little investment and
generate cash that can be used to invest in
other business units
Star
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A business unit that has a large market
share in a fast growing industry
Stars may generate cash, but because the
market is growing rapidly they require
investment to maintain their lead
If successful, a star will become a cash cow
when its industry matures
Question Mark
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AKA “Problem Child”
A business unit that has a small market
share in a high growth market
These business units require resources to
grow market share, but whether they will
succeed and become stars is unknown
Dog
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A business unit that has a small market
share in a mature industry
A dog may not require substantial cash, but it
ties up capital that could better be deployed
elsewhere
Unless a dog has some other strategic
purpose, it should be liquidated if there is
little prospect for it to gain market share