Amazon.com Analysis
Transcript of Amazon.com Analysis
Strategy-Formulation Analytical Framework’s Stages
OPPERTUNITIES Weight Rate Score
Use of Trans fat oils 0.08 4 0.32
Less price 0.12 4 0.48
Low fat food 0.08 2 0.16
Wide variety in menu 0.10 3 0.30
Ambience 0.12 3 0.36
External Factor Evaluation
Threat Weight Rate Score
Direct Competitors Are much larger.
.04 4 0.16
Global Recession .08 3 0.24
Competitors Financial Position .07 4 0.28
Fraudulent Cases .03 2 0.06
Customer Awareness .06 2 0.12
Dynamic Environment .03. 2 0.06
Total of Opportunities & Threat 1 2.54
External Factor Evaluation
Strength Weight Rate Score
Customer liking .09 4 0.36
Considered High ranking brand
.08 4 0.32
Innovators in product services
.11 4 0.44
Earning from international market
.10 3 0.30
Rich in taste (sandwich) then its competitors
.12 4 0.48
Internal Factor EvaluationInternal Factor Evaluation
Weakness Weight Rate ScoreNet income decrease .10 2 0.20
Decline revenue overseas .10 2 0.20
Restaurant closures .08 2 0.16
Increase in cost of operations
.13 2 0.26
Decline in assets and share holder equity
.09 2 0.18
Total of Strength & Weakness
1 2.90
Internal Factor EvaluationInternal Factor Evaluation
Critical Success Factor
Weight Mc. DonaldsRating
score BKC Rating
Score
WENDEY’S
Score
Innovators .05 3 0.15 3 0.15 4 0.20
Sales Efficiency
.10 4 0.40 4 0.40 3 0.30
Price Competition
.10 4 0.40 4 0.40 4 0.40
Global Expansion
.20 4 0.80 3 0.60 2 0.40
Product range .10 4 0.40 4 0.40 3 0.40
Advertising .20 4 0.80 3 0.60 2 0.40
Market Share .05 4 0.20 3 0.15 2 0.10
Product Quality .20 4 0.80 4 0.80 4 0.80
TOTALTOTAL 11 3.953.95 3.53.5 3.03.0
Strategy-Formulation Analytical Framework’s Stages
Strengths – SCustomer liking
Considered High ranking brand
Innovators in product services
Earning from international market
Rich in taste (sandwich) then its competitors
Weaknesses – W
Net income decrease
Decline revenue overseas
Restaurant closuresIncrease in cost of operationsDecline in assets and share holder equity
Opportunities – O Use of Trans fat oils Less priceLow fat foodWide variety in menuAmbience
SO Strategies
(S2+O2) =
(S4+O3) = Development of Social
Net Work
(S1+O1,5) = Service Development
(S7,S8+O4) = Offering Seasonal
Discount
WO Strategies
(W3,4+O1,2) = Possible Availability
Every Time
Threats – TDirect Competitors Are much larger. Global RecessionCompetitors Financial PositionFraudulent CasesCustomerAwarenessDynamic Environment
ST Strategies
(S3+T2) = Strong Political Analysis
(S9+T4) = Market Diversification
(S5+T1) = Reasonable Spread Margin
(S3+T3) = Continue Development
WT Strategies
(W2+T3) = Increased Brand Range
SPACE MatrixAggressive
Conservative
Defensive
Competitive
Internal DimensionsInternal Dimensions
Financial Strength
Competitive Advantage
External DimensionsExternal Dimensions
Environmental Stability (ES)
Industry Strength (IS)
Internal Strategic Position
External Strategic Position
Financial Strength Rate Environmental Stability Rate
Current Ratio 5 (1.33) Technological changes -1
Return On Investment 5 (11%) Rate of inflation -2
Leverage 1 (2.89) Growth in Demand -3
Liquidity 4 (0.98) Price range of competing products -1
Working Capital 4 (0.79) Barriers to entry -4
Proprietary Ratio 2 (9.87%) Risk involved in business -4
Cash Cycle 5 Competition -1
TOTAL 26 TOTAL -16
AVERAGE (26/7) 3.71 AVERAGE (-16/7) -2.28
Internal Strategic Position External Strategic Position
Competitive Advantage Rate Industry Strength Rate
Market share -1 Growth potential 5
Customer Loyalty -1 Profit potential 4
capacity utilization -3 Financial stability 4
Technological know-how -1 Technological know-how 5
Control over suppliers & distributors
-1 Resource utilization 5
Ease of entry into market 4
TOTAL -7 TOTAL 27
AVERAGE(-7/5) -1.4 AVERAGE(27/6) 4.5
FS+6
+1
+5+4+3
+2
-6
-5
-4
-3
-2
-1-6 -5 -4 -3 -2 -1 +1 +2 +3 +4 +5 +6
ES
CA IS
Conservative Aggressive
Defensive Competitive
x-axis = CA(-1.4)+IS(4.5)=3.1
Y-axis = FS(3.71)+ES(-2.28)=1.43
LOW1 to 1.99
MEDIUM2 to 2.99
HIGH 3 to 4
STRONG3 to 4
AVERAGE2 to 2.99
WEAK1 to 1.99
EFE TOTAL
SCORE
IFE TOTAL SCORE
Hold & Maintain
Wendy’s
Quadrant IV1. Concentric diversification
2. Horizontal diversification
3. Conglomerate diversification
4. Joint ventures
Quadrant III1. Retrenchment
2. Concentric diversification
3. Horizontal diversification
4. Conglomerate diversification
5. Liquidation
Quadrant I1. Market development
2. Market penetration
3. Product development
4. Forward integration
5. Backward integration
6. Horizontal integration
7. Concentric diversification
Quadrant II1. Market development
2. Market penetration
3. Product development
4. Horizontal integration
5. Divestiture
6. Liquidation
RAPID MARKET GROWTH
SLOW MARKET GROWTH
WEAK COMPETITIVE
POSITION
STRONGCOMPETITIVE
POSITION
Strategy-Formulation Analytical Framework’s Stages
STRATEGIC ALTERNATIVES
Product Development Market Penetration
Strength Weight AS TAS AS TAS
Customer liking .09 4 .36 4 .36
Considered High ranking brand
.08 3 .24 3 .24
Innovators in product services
.11 4 .44 4 .44
Earning from international market
.10 2 .20 4 .40
Rich in taste (sandwich) then its competitors
.12 3 .36 3 .36
STRATEGIC ALTERNATIVES
Product Development Market Penetration
Weakness Weight AS TAS AS TAS
Net income decrease .10 2 .28 4 .40
Decline revenue overseas
.10 1 .03 4 .40
Restaurant closures .08 --- --- --- ---
Increase in cost of operations
.13 --- --- --- ---
Decline in assets and share holder equity
.09 1 .04 4 .36
Opportunities
Use of Trans fat oils 0.08 3 .24 4 .32
Less price 0.12 4 . 48 4 .38
Low fat food 0.08 4 .32 3 .24
Wide variety in menu 0.10 3 .30 4 .40
Ambience 0.12 3 .36 4 .48
STRATEGIC ALTERNATIVES
Product Development Market Penetration
Threat Weight AS TAS AS TAS
Direct Competitors Are much larger.
.04 4 .16 4 .16
Global Recession .08 2 .16 3 .24
Competitors Financial Position
.07 2 .14 4 .28
Fraudulent Cases .03 --- --- --- ---
Customer Awareness
.06 2 .12 4 .24
Dynamic Environment
.03 2 .06 2 .06
STRATEGIC ALTERNATIVES
Product Development Market Penetration
Weight AS TAS AS TAS
STAS 4.29 5.76
Both the strategies are highly desirable for Wendy’s But! 2nd Strategy “Market Penetration” more considerable than 1st “Product Development”.