4 discussions-bmgt 495
RESPOND TO EACH STUDENT AND WRITE 75 WORDS FOR EACH FOLLOW UP RESPONSE
Use the appropriate APA formatted scholarly reference sources and corresponding in-text citations in all your postings.
MUST USE A DIFFERENT SOURCE PER STUDENT RESPONSE
Learning Activity 2
IFE (Internal factor evaluation) matrix of a focal company or organization is a strategy-formulation tool that summarizes and evaluates the major strengths and weaknesses in the functional areas of a business, and it also provides a basis for identifying and evaluating relationship among those areas. (David, 2005, p.147)
Requirement 1: Use the same company that you have selected in Learning Activity 1.
Requirement 2: Discuss briefly some relevant industry and background information about that company in regards to its internal environment.
Requirement 3: Determine at least 3 internal factors as “strengths” and 3 other internal factors as “weaknesses”.
Requirement 4: Compile an Internal Factor Evaluation (IFE) Matrix (with specific internal factors, weights, scores, and weighted scores) as an analytic tool for technically evaluating the focal company.
IFE (Internal factor evaluation)
IFE – Key Internal Factors |
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Strengths | Weight | Rating | Weighted Score |
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Weaknesses |
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Totals | 1.0 | (Leave this cell blank) |
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Reference
David, F.R. (2005). Strategic management: Concepts and cases.(10th ed.). Upper Saddle River, NJ: Pearson/Prentice Hall
Requirement 5:
Why did you choose those strengths and weaknesses?
(Please keep in mind you need to discuss at least 3 supporting reasons for each of these respective factors.)
What do the respective weighted IFE scores mean for that organization from a strategic planning viewpoint?
What are some strategic implications by inferring based on the total weighted scores that are derived from the IFE matrix respectively?
Support the rationale for your explanation.
Use the appropriate APA formatted scholarly reference sources and corresponding in-text citations in all your postings.
Student 1: James Watson
Internal External Matrix
For this question, I choose the IE Matrix (Internal External Matrix). In this, it is important to note that the IE happens to be one of the most strategic tools that happen to come under the portfolio management that is considered to be more similar to the BCG Matrix (Cassidy, Glissmeyer, & Capps III, 2013). It is important to note that the matrix is generally used for purposes of plotting the divisions of the organization in a nine-cell representation with each cell having some meaning being linked with the suggested strategies (Zimmerman & Bell, 2014).
Reasons for choosing the IE Matrix
There are a number of reasons why I chose the IE matrix for the case presented. One of the reasons is that of having the matrix being more detailed and making an appropriate analysis of the organization in question. The other reason for choosing the matrix is that, despite it being detailed, it is easy to compute and represent the data from the organization in question (Cassidy, Glissmeyer, & Capps III, 2013).
BYG IE Analysis
Based on the results of the IE matrix computation, it is very clear that the company is placed in the fifth quadrant. The meaning of the company placement is that is that the organization is in a position to be managed effectively with the hold and maintain strategies like the market penetration and product development strategies.
Market Penetration
To make the company penetrate the market effectively and efficiently, it is very clear from the analysis that the company should employ the use of flyers by distributing out the flyers on the streets as well as offering advertising magnets (Zimmerman & Bell, 2014). Additionally, the company is expected to expand its sector for purposes of improving its sales.
Product development
Some of the strategies that can be used for product development by the company include creating more burritos for purposes of expanding its market as well as increasing its sales as well as expanding its service sector (Zimmerman & Bell, 2014). The other strategy will be that of adopting more technology to make the company products more efficient.
References
Cassidy, C. M., Glissmeyer, M. D., & Capps III, C. J. (2013). Mapping An Internal-External (I-E) Matrix Using Traditional And Extended Matrix Concepts. Journal of Applied Business Research (JABR), 29(5), 1523. doi:10.19030/jabr.v29i5.8033
Zimmerman, S., & Bell, J. (2014). The sustainability mindset: Using the matrix map to make strategic decisions.
STUDENT 2 Benjamin Alpert
Week 4 Learning Activity 2
Below is a pool of three strategy-formulation analytic tools:
Boston Consulting Group (BCG) Matrix
IE Matrix
SPACE Matrix
Based on the information that you have gathered from your Week 3 Learning Activities, please select one matrix from the above-mentioned pool and complete your selected analytic tool.
Requirement 1:
Reiterate the focal company, and identify the analytic tool for your analysis
Mohawk Industries is a multi-billion carpet and floor industry manufacturer and SPACE Matrix is the preferred analytical tool chosen.
Requirement 2:
Discuss the reasons why you chose that analytic tool.
SPACE balances out the external and internal factors critical to success of a company with a superior focus on financial strength. BCE is more geared to market analysis of each business unit and is a relatively simplistic two by two matrix of market share versus growth rate. IFE is a more detailed matrix involving nine cells divided into three sections, grow and build, hold and maintain and harvest or exit.. SPACE measures deal with environmental (external), industry (internal), financial (internal), and competitive advantage (internal). This four-quadrant matrix determines whether aggressive, conservative, defensive or competitive strategies are called for. (SPACE MATRIX EXCEL TEMPLATE, 2017)
Requirement 3:
Complete your actual computations and/or analysis with the chosen tool.
Learners need to show their required steps in (a) doing the actual computations, (b) determining the position of the point (that is, the coordinates) in the matrix, (c) drawing the line on the matrix, or deciding “which products go into which quadrant” within the graphic representation.
Financial strength: the Company has high financial strength with average rating of 4.6 out of 6. The Company has been paying down its debt and lowered its ebitda to debt ratio high of 2.4x to current level of 1.4x. Its four-year compound growth rate in revenue is 11.4%. Operating income has risen 34 percent during this same timeframe. The rating agencies have upgraded the company to BBB+ this past year which is solid investment grade. (2016 annual report to shareholders Mohawk Industries, 2017)
Financial | |
Return on investment | 5.00 |
Cash Flow | 5.00 |
Liquidity (current ratio) | 4.00 |
Leverage D/E | 4.00 |
P/E ratio forward | 5.00 |
4.60 |
Competitive Strength: The Company is in solid competitive ranking and is the market leader in the ceramic flooring industry the average ranking is from -1 to -6 is -2.4.
Competitive | |
Market Share | -1 |
Product Quality | -3 |
Pricing | -3 |
Diversification | -2 |
Cost Levels | -3 |
-2.4 |
The industry strength averages 3.6 out of 6 with housing starts and interest rates favoring the carpet and flooring industry but the high degree of customer choices and extensive capital required to expand plant and grow by acquisitions requiring heavy burden.
Industry | ||
Growth | ||
Ease of Entry | ||
Capital Intensity | ||
Customer Power | ||
Housing Starts/Interest | ||
3.6 |
Environmental
There are many alternatives in the flooring industry such as carpet and ceramic and the green environmental pressures are heavy in this industry. Regulatory and legal hurdles can be severe but the global economic environment is favorable to product expansion overseas as the company has expanded to 15 countries in the past two years.
Environmental | |||
Substitutes | -4 | ||
Technology | -2 | ||
Regulatory | -3 | ||
Competitive Pressures | -4 | ||
Global economic | -1 | ||
-2.8 |
Requirement 4:
Once you have completed the analytic tool, (a) discuss the outcome of your analysis in terms of what strategic direction the selected company should take, (b) devise the appropriate tactical strategies, and (c) explain “why” in details.
X-Axis Score The Internal Strategies Position is calculated by adding the competitive Score and the financial Score which is 2.2. This is plotted on the X-axis. Y-Axis Score. The External Strategies Position is calculated by adding the industry score to the environmental score which is 0.8. This is plotted on the Y-axis. This net result means the company is able to be aggressive in the market place and continue to diversify its product portfolio, expand overseas, use cash flow to growth through acquisitions or expand plant capacity. The company has leading market positions in the ceramics flooring and has good positioning in the carpet industries. The company is growing margins at a faster pace than revenues and is using cash flow to delever creating more financial stability.
Requirement 5:
Support the rationale for your explanation throughout the analysis.
Use the appropriate APA formatted scholarly reference source and corresponding in-text citations in all your postings.
Th Company is well placed in both internal factors and external factors, with focus that the housing industry is running on all cylinders and interest rates are low spurring housing growth and need for flooring. Company is expanding into new markets and its products are now manufactured in 15 countries and distributed in 160 countries.
Bibliography
2016 annual report to shareholders Mohawk Industries. (2017, June 13). Retrieved from corporatereport.com: http://www.corporatereport.com/mohawk/2016/ar/#slide7
SPACE MATRIX EXCEL TEMPLATE. (2017, June 13). Retrieved from businesstoolsstore.com: http://www.businesstoolsstore.com/content/User%20Guides/SPACE%20Matrix%20Chart%20Excel%20Template%20User%20Guide.pdf