How to evaluate the attractiveness

of a market?
 Purpose of the
session
• Learn to evaluate the attractiveness of
the market from a product idea.

• Learn to elaborate the EFE, IFE and

Internal-External Matrix in order to
define where we are and what
strategies should be use according to
the situation.
 New Product Development Process
Details of the Stages

Preliminary Concept Product

Technical / Production Technical Generation Test
Activities Analysis (technical)

NO
NO GO NO NO GO
GO GO
Initial GO Preliminary G GO
Ideas
Evaluation Concept G Product
Generation Screening O
Evaluation O Development

Concept Concept Concept and

Marketing Preliminary Test
Activities
Identification Product
Market Market
Market Test
Analysis Study
Studies

STAGE I: STAGE II: PRELIMINARY STAGE III: STAGE IV:

IDEA ANALYSIS CONCEPT DEVELOPMENT
Source: Robert G. Cooper - Predevolpment Activities Determine New Product Success
 Initial Screening
The first filter in the product
development process.
Eliminates incongruous ideas with the
new product strategy of the company
or the ones that are obviously
inappropriate for some other reason.
 EVALUATION CRITERIA
FOR IDEAS SELECTION

•OBJECTIVES, POLICIES, STRATEGIES AND

COMPANY VALUES

• MARKETING CRITERIA

• RESEARCH AND DEVELOPMENT CRITERIA

• FINANCIAL CRITERIA

• PRODUCTION CRITERIA
 DESIRABLE CHARACTERISTICS OF A
MARKET

 Potential:
 Market size
 % Growing level

 Penetration:

 Penetration level or life cycle stage

 Consumer maturity

 Scale:
 % Market-Share
 Vulnerability of competitors
 DESIRABLE CHARACTERISTICS OF A
MARKET

 In-Puts required:
 Investment in dollars and technology
 Acts as entry barrier
 Reward:
 Benefits or profits
 Risk:
 Demand fluctuations (cyclicity, seasonality)
 Regulations
 Oligopolies
 How to choose
the correct opportunity?

What tool can we use to

identify the attractiveness
of a market?
 STRATEGIC ANALYSIS

• Consists in analyzing the external and internal

factors related to the project and the choices of
strategies to maximize the potential of the
business.
• Serves as a basis to generate the main
strategies of the business plan.
• Include analysis of the market environment and
the company.
• Consists of making subjective decisions based
on objective information.
 ANALYSIS OF THE ENVIRONMENT

ITS AIM ARE:

• Understand the factors that affects the performance of

our business, the structure of our industry and the
competitive dynamic.

• The process to realize the external analysis must include

the participation of the majority of managers and
employees, so organization members can understand
the objectives and got it´s commitment.

• People appreciate the opportunity to help with ideas and

understand the power of the industry, the competitors
and the markets of your company.
MARKET ENVIRONMENTS
GLOBAL

NATIONAL ENVIRONMENT
MACRO

INDUSTRIAL
ENVIRONMENT
ENTORNOMICRO
INDUSTRIAL

COMPANY
 EXTERNAL FACTORS TO EVALUATE

GENERAL COMPETITIVE MARKET

• Global • Rivalry between • % of Penetration

• Social / Demographic current competitors • Size.
/ Cultural / Labor • Entry of new • Composition
• Economic competitors • Growth
• Political • Power of suppliers • Tendencies
• Technological • Power of buyers • Purchase Attitudes
• Ecological / • Substitutes and Habits
Climatological • Unfair Competition • Channels of distribution
• Informality • Marketing
• Smuggling
 GLOBAL EXTERNAL ANALYSIS
Nation Competitiveness (Porter)

NATION COMPETITIVENESS FACTORS

INSTITUTIONS
INTERNATIONAL
ENVIRONMENT

INFRASTRUCTURE KNOW HOW

Networks COUNTRY Knowledge
Communications Technology

RESOURCES
Natural
Human
 MACRO ENVIRONMENT ANALYSIS

ANALYSIS OF MARKET ATTRACTIVENESS

GLOBAL – INTERNATIONAL ENVIRONMENT

• EXPANDED MARKETS THROUGH FREE TRADE

• GLOBALIZATION AND REGIONALIZATION

• OTHER
 EXTERNAL ANALYSIS
FACTORS OF COUNTRY MACRO
ENVIRONMENT

ECONOMIC
FACTORS
INTERNATIONAL
ENVIRONMENT

MICRO
ENVIRONMENT
POLITICAL AND
SOCIAL AND CULTURAL
LEGAL
FACTORS COMPANY FACTORS

ECOLOGICAL TECHNOLOGICAL
FACTORS FACTORS
 MACRO ENVIRONMENT ANALYSIS

MARKET ATTRACTIVENESS ANALYSIS

ECONOMIC ENVIRONMENT

• Inflation rate
• Economic growth
• Devaluation rate
• Taxation
• Taxes tariffs
• Consistency of economic policies
• Others
 MACRO ENVIRONMENT ANALYSIS

MARKET ATTRACTIVENESS ANALYSIS

POLITICAL AND LEGAL ENVIRONMENT

•Laws and regulations

• Institutional strength
•Increased legislation of environmental
protection
• Administration of justice
• Social Legislation
• Monetary and fiscal policy
• Statism / privatization
• Indecopi / prom peru
• Government subsidies
• Proximity of elections
• Others
MACRO ENVIRONMENT ANALYSIS

MARKET ATTRACTIVENESS ANALYSIS

SOCIAL AND CULTURAL ENVIRONMENT

• Demographic groups, young people

• Lifestyles
• Families composition
• Immigration and centralism
• Population Growth
• Cultural idiosyncrasies
• Level of unionization
• Social comfort level
• Influences of ecological impact
• Attitudes toward savings, customer servic
customer, business and recreation
 MACRO ENVIRONMENT ANALYSIS

MARKET ATTRACTIVENESS ANALYSIS

TECHNOLOGICAL ENVIRONMENT

•Influences of technological change

• Development of new technologies
•Improved production cost and
expenses
• Process Improvement
• Technological development
• Level of education
• Infrastructure
• Information Technology
EXTERNAL MARKET ANALYSIS – MICRO ENVIRONMENT FACTORS
Five Competitive Forces (Porter)

Threat of new
competitors
Entry Barriers
Economic Factors Government Policy
NEW Economies of Scale and Network
Political Factors
ENTRANTS Capital Investment
Climatological Factors
Strategic Linkages

Rivalry of Competitors
INDUSTRY Exit Barriers
COMPETITORS Product differentiation
Bargaining power or Bargaining power
suppliers of clients

SUPPLIERS BUYERS

Power of the suppliers RIVALRY Power of the buyers

Resources access AMONG EXISTING Channels access
COMPETITORS

Threat of Substitute Social Factors

Products SUBSTITUTES Technological Factors
PRODUCTS
Availability of Substitutes
 MICRO ENVIRONMENT ANALYSIS

NEW ENTRANCE COMPETITORS – MOBILITY THREAT

Companies that are not competing in the industry yet but they have the
competences and might compete if they decided to. Represent a future threat.

ENTRY BARRIERS
Are the drivers that prevent the new entrance:
• Sources of cost advantages:
• Effects experienced
• Economies of scale
• Capital requirements to compete
• Access to the technology
• Access to the distribution or a key supply
• Patents or processes
• Government policy, legal Norms and regulations
• Change resistance
• Strong restrictions to the transfer
• Brand weight and loyalty to it
• Products and services differentiation
 MICRO ENVIRONMENT ANALYSIS

MARKET ATTRACTIVENESS ANALYSIS

EXIT BARRIERS FOR COMPETITORS

• Assets Specialization

• Fixed costs of exit

• Emotional barriers

• Strategic Linkages
 MICRO ENVIRONMENT ANALYSIS

MARKET ATTRACTIVENESS ANALYSIS

THREAT OF SUBSTITUTES PRODUCTS

•Availability of near products

•User Cost of change

•Profitability of substitute products

•Aggressiveness of substitutes producer

•Relation value/price of substitutes

•Growth of substitute technologies

 MICRO ENVIRONMENT ANALYSIS

MARKET ATTRACTIVENESS ANALYSIS

BARGAINING POWER OF SUPPLIER

•Number of important suppliers

•Contribution of supplier to improving the quality of goods or services
•Degree of labor specialization
•Availability of substitutes for inputs
•Cost of changing supplier
•Threat of suppliers to forward integration
•Threat of industry to backward integration
•Contribution from suppliers in cost
•Profitability of suppliers
 MICRO ENVIRONMENT ANALYSIS

MARKET ATTRACTIVENESS ANALYSIS

BARGAINING POWER OF BUYERS

• Number of important buyers

•Contribution of the buyers to quality
•Standard or undifferentiated product
•Company image
•Availability of substitutes
•Changing costs for buyers
•Threat of buyers to backward integration
•Threat of sector to forward integration
•Contribution of the sector to the cost of buyers
•Increased strength in key support processes
(media, fundraising, systems and technology, investments)
•Profitability of buyers
 MICRO ENVIRONMENT ANALYSIS

CURRENT COMPETITORS
Competition between similar organizations with:
• Sustained growth
• Potential market
• Product differentiation and know how

Compete against each other to gain market shar e from others:

• Adverstising and promotions efforts
• Innovation in product design
• Aggresive pricing strategies
• Direct efforts in sales and post sales
Involve the undertanding of the structure of the i ndustry
• Number of competitors:
• Fragmented
• Monopoly o Oligopoly
• Leaderships clearly positioned
 MICRO ENVIRONMENT ANALYSIS

COMPETITION AMONG CURRENT COMPANIES

IS MORE INTENSIVE WHEN:

• There are too many vendors

• Slow growth of the sector
• High fixed costs
• Low differentiation of the sector
• Concentration of competitors
• Balance among the competitors
• Increased capacity
• Diversity of competitors
• Strong exit barriers
 MARKET ANALYSIS

• DEMOGRAPHIC CHARACTERISTICS

• MARKET NEEDS

• BUYING HABITS AND ATTITUDES

• TRENDS

• % PENETRATION

• SIZE AND COMPOSITION

• MARKET GROWTH RATE

• LIFE CYCLE STAGE

• MARKETING CHANNELS
 MARKET ATTRACTIVENESS ANALYSIS

AVERAGE EVALUATION OF MARKET ATTRACTIVENESS

THREAT OF ENTRY OF NEW EXIT BARRIERS: LOW

ENTRY BARRIERS: HIGH
COMPETITORS

FAVORABLE ECONOMIC FACTORS

COMPETITION
AMONG
CURRENT
NEGOTIATION POWER COMPETITORS IN NEGOTIATON POWER
OF SUPPLIERS THE MARKET OF BUYERS

NEUTRAL BARGAINING POWER NEUTRAL BARGAINING POWER

OF SUPPLIERS OF BUYERS
THREAT OF
SUBSTITUTES PRODUCTS FAVORABLE SOCIAL ENVIRONMENT

AVAILABILITY OF SUBSTITUTES
PRODUCTS: LOW
 MARKET ATTRACTIVENESS ANALYSIS

LOW 7.3
HIGH
ENTRY BARRIERS
7.8
EXIT BARRIERS HIGH LOW

COMPETITION AMONG FIRMS HIGH 5.6 LOW

THREAT OF SUBSTITUTES PRODUCTS HIGH 9.0 LOW

BARGAINING POWER OF SUPPLIERS LOW 4.4 HIGH

BARGAINING POWER OF BUYERS HIGH 5.4 LOW

SOCIAL ENVIRONMENT UNFAV 7.5 FAVOR

ECONOMIC ENVIRONMENT UNFAV 5.4 FAVOR

POLITICAL ENVIRONMENT UNFAV 7.1 FAVOR

GENERAL AVERAGE OF THE SECTOR 6.6

 ANALYSIS OF THE COMPETITION SKILLS

THE PURPOSE IS TO KNOW THE RESOURCES OF

THE COMPETITION AND DETECT WHAT ARE THEIR
COMPETITIVE STRENGHTS AND WEAKNESSES

• MANAGEMENT
• INNOVATION
• PRODUCTION
• COMMERCIAL
• LOGISTICS
• FINANCIAL
• TECHNOLOGICAL
 COMPETITIVE ANALYSIS PROFILE

COMPETITORS PROFILE

CURRENT STREGNTHS AND FUTURE

STRATEGY WEAKNESSES STRATEGY
What are they doing? What will they do? How will they do?

Competitor A

Competitor B

Competitor C

Competitor D
 INTERNAL ANALYSIS

IS THE PROCESS OF QUANTIFICATION AND EVALUATION OF THE

RESULTS OF A COMPANY.

IT INCLUDES THE CLARIFICATIONS OF GAPS BETWEEN RESULTS

AND OBJETIVES SET ON THE ACTION PLAN, THE TRUE
UNDERSTANDING OF DEVIATIONS CAUSES AND THE MEASURE OF
EFFECTIVENESS OF THE DEFINED STRATEGIES TO ACCOMPLISH
THEM.

THE INTERNAL ANALYSIS INCLUDE THE IDENTIFICATION OF

CORPORATE RESOURCES AND COMPETENCES DEVELOPED.

THE RESULT IS THE DETECTION OF AREAS OF STREGHTS AND

WEAKNESSES IN THE ORGANIZATION.
 INTERNAL ANALYSIS FACTORS

RESOURCES
RESULTS COMPETENCES

• Cash and Bank

• % Market Share • Entry Logistic
• Accounts receivable
• % Market Penetration • Research & Develop.
• Stocks
• Number of Customers • Production
• Machinery and
• Purchase Intensity • Marketing
equipment
• Incomes • Sales
• Infrastructure
• Costs y expenses • Distribution Logistic
• Technology
• Contribution Margin • Post-sales
• Brands
• Net earnings • Relationship
• Patents
• ROI • Financial Management
• Process
• Others • Value Management
• People
• Others • Management .
• Others
STRATEGIC DIAGNOSTIC

SWOT ANALYSIS
 SWOT ANALYSIS

REGISTRO SISTEMATICO Y RESUMIDO DE LAS FF Y DD

(INTERNAS) Y LA OO Y AA (EXTERNAS) MAS IMPORTANTES
QUE CONSIDERAMOS PUEDEN ESTAR AFECTANDO O
AFECTARAN, POSITIVA O NEGATIVAMENTE EN LA GESTION DE
UNA MARCA, PRODUCTO O LA EMPRESA NE GENERAL.

EL ANALISIS FODA CONSTITUYE LA PRINCIPAL FUENTE PARA

LA GENERACION DE OBJETIVOS, ESTRATEGIAS Y PLANES DE
ACCION TENDIENTES A:

EXPLOTAR LAS FORTALEZAS INTERNAS EXISTENTES PARA:

• APROVECHAR LAS OPORTUNIDADES

• CORREGIR DEBILIDADES INTERNAS
• NEUTRALIZAR / MINIMIZAR LAS AMENAZAS EXTERNAS
 SWOT ANALYSIS

STRENGHTS WEAKNESSES OPPORTUNITIES THREATS

INTERNAL
ANALYSIS

EXTERNAL
ANALYSIS
 EFE MATRIX- EXTERNAL FACTORS EVALUATION

WEIGHTED
KEY SUCCESS FACTORS WEIGHT RATING SCORE

•OPPORTUNITIES
.08 3 .24
1.- FREE TRADE U.S. AND CANADA
.06 2 .12
2.- GOOD CAPITAL VALUES
.11 1 .11
3.- AVAILABLE INCOME GROWS 3% PER YEAR
.14 4 .56
4.- CUSTOMERS PAY + FOR BIO PRODUCTS
.09 4 .36
5.- NEW SOFTWARE REDUCES LIFECYCLE

• THREATS
.10 2 .20
1.- CLOSED JAPANESE MARKET
.12 4 .48
2.- NEW TAXES IN EUROPEAN UNION
.07 3 .21
3.- POLITICAL INSTABILITY IN RUSSIA
.13 2 .26
4.- LOW GOVERNMENT SUPPORT
.10 1 .10
5.- INCREASING UNEMPLOYMENT

1.00 2.64
 ELABORATION PROCESS – EFE MATRIX

EFE MATRIX ALLOWS THE STRATEGIST TO SUMMARIZE AND EVALUATE ECONOMIC,

SOCIAL, CULTURAL, DEMOGRAPHIC, ENVIRONMENTAL, POLITICAL, TECHNOLOGICAL AND
COMPETITIVE INFORMATION.
INCLUDES 6 STEPS:

1. LIST AT 10 TO 20 FACTORS, BOTH OPPORTUNITIES AS THREATS THAT AFFECT THE

COMPANY AND INDUSTRY. ANNOTATES FIRSTLY THE OPPORTUNITIES AND THREATS. BE AS
SPECIFIC AS POSSIBLE USING % REASONS AND COMPARATIVE FIGURES IN THE EXTENT
POSSIBLE.

2. SELECT KEY FACTORS THAT ARE HAVING MORE POSSIBILITIES OF OCCURRENCEAND

HAVE GREATER DEGREE OF IMPACT ON THE COMPANY OR INDUSTRY.
10 KEY FACTORS ARE OK.

3. ASSIGN A RELATIVE WEIGHT TO EACH FACTOR FROM 0.0 (NOT IMPORTANT) TO 1.0 (VERY
IMPORTANT).
THE WEIGHT INDICATES THE RELATIVE IMPORTANCE THAT THE FACTOR HAVE FOR A
COMPANY TO REACH SUCCESS IN IT´S INDUSTRY. THE OPPORTUNITIES HAVE HIGHER
WEIGHTS THAN THREATS, BUT THESE CAN HAVE HIGH WEIGHTS IF THEY ARE
THREATENING.
FACTORS WEIGHTS CAN BE ESTABLISH BY COMPARING THE MOST SUCESSFUL
COMPETITORS AND THE UNSUCESSFUL ONES OR BY ANALYSIS OF THE GROUP FACTOR
AND THE CONSENSUS OF THE EVALUATORS. ALL WEIGHTS ASSIGNED MUST ADD 1.0.
 ELABORATION PROCESS - EFE MATRIX

4. RATE FROM 1 TO 4 TO EACH OF KEY SUCCESS FACTORS IN ORDER TO INDICATE IF THE

COMPANY HAVE STRATEGIES THAT ARE EFFECTIVELY RESPONDING TO THE FACTOR WHERE:

4 = A STRATEGY WITH A SUPERIOR PERFORMANCE

3 = A STRATEGY WITH A MORE THAN AVERAGE RESPONSE
2 = A STRETEGY WITH A MEDIUM RESPONSE
1 = A STRATEGY WITH A BAD RESPONSE

RATINGS ARE BASED ON THE STRATEGIES EFFECTIVENEST. WHILE THE WEIGHT

OF STEP 3 ARE BASED ON INDUSTRY ,
IF THE COMPANY HAS A SUPERIOR STRATEGY MEANS THAT IT CAN TAKE THE KEYFACTOR,
MAKING OF IT A MAJOR OPPORTUNITY. IF THE STRATEGY HAS A BAD RESPONSE
MEANS THAT THE FACTOR IS A MAJORTHREAT.

5. MULTIPLY THE WEIGHT OF EACH FACTOR WITH THE RATING TO GET THE WEIGHTED SCORE.

6. SUME WEIGHTED SCORE OF EACH VARIABLE TO GET THE TOTAL WEIGHTED SCORE OF
THE COMPANY. VALUES GREATER THAN 2.5. MEANS ABOVE THE AVERAGE STRATEGIES.

DEPTH UNDERSTANDING OF THE KEY FACTORS USED IN THE MATRIX ARE MORE
IMPORTANT THAN THE ALLOCATION OF WEIGHTS AND RATINGS.
 IFE MATRIX – INTERNAL FACTORS EVALUATION

WEIGHTED
KEY SUCESS FACTORS WEIGHT RATING SCORE

• STRENGHTS
.06 4 .24
1.- PRESENT RATIO 2.52
.16 4 .64
2.- INCREASE GROSS EARNINGS IN 7%
.18 4 .72
3.- HIGH HUMAN RESOURCES SPIRIT
.08 3 .24
4.- NEW ERP INFORMATION SYSTEM
.12 3 .36
5.- MARKET SHARE GROWING UP TO 24%

• WEAKNESES
.05 2 .10
1.- UNSOLVE LEGAL SUIT
.15 2 .30
2.- DECREASE IN PLANT CAPACITY TO 74%
.06 1 .06
3.- LACK OF STRATEGIC MNGMT. SYSTEM
.08 1 .08
4.- INCREASE R&D EXPENSES IN 31%
.06 1 .08
5.- UNEFFECTIVE DISTRIBUTION INCENTIVES

1.00 2.80
 PROCESO DE ELABORACIÓN - MATRIZ EFI

LA MATRIZ EFI RESUME Y EVALUA LAS FUERZAS Y DEBILILDADES MAS IMPORTANTES

DENTRO DE LAS AREAS FUNCIONALES DE UN NEGOCIO Y ADEMÁS OFRECE UNA BASE
PARA IDENTIFICAR Y EVALUAR LAS RELACIONES ENTRE DICHAS ÁREAS. ELABORAR UNA
EFI, IMPLICA JUICIOS INTUITIVOS, POR LO QUE ES UNA TECNICA NO DEL TODO
CONTUNDENTE. SU MAYOR VALOR ES PARA ENTENDER A FONDO LOS FACTORES
INCLUIDOS Y NO LAS CIFRAS. SE DESARROLLA EN FORMA SIMILAR QUE LA EFE.

1. - LISTE ENTRE 10 A 20 FACTORES INTERNOS, TANTO FORTALEZAS COMO DEBILIDADES

QUE AFECTAN A LA EMPRESA. ANOTE PRIMERO LAS FORTALEZAS Y LUEGO LAS
DEBILIDADES. SEA LO MÁS ESPECÍFICO POSIBLE, USANDO %, RAZONES Y CIFRAS
COMPARATIVAS EN LO POSIBLE.

2.- SELECCIONE LOS FACTORES CLAVES, QUE SON LOS QUE TIENEN MAYOR GRADO DE
REPERCUSIÓN EN LA EMPRESA, ES MEJOR QUE NO SEAN MAS DE 10.

3.- ASIGNE UN PESO RELATIVO A CADA FACTOR, DESDE 0.0 (NO IMPORTANTE) A 1.0 (MUY
IMPORTANTE). EL PESO INDICA LA IMPORTANCIA RELATIVA QUE TIENE ESE FACTOR PARA
QUE UNA EMPRESA ALCANCE EL ÉXITO. INDEPENDIENTE DE QUE ELFACTOR REPRESENTE
UNA FUERZA O DEBILIDAD, AQUELLOS QUE IMPACTEN MÁS EN EL DESEMPEÑO DE LA
ORGANIZACIÓN DEBEN LLEVAR LOS PESOS MÁS ALTOS. TODOS LOS PESOS ASIGNADOS
DEBEN SUMAR 1.0.
 PROCESO DE ELABORACIÓN - MATRIZ EFI (cont.)

4.- CALIFIQUE DE 1 A 4 A CADA UNO DE LOS FACTORES CLAVES DEL ÉXITO INDICANDO SI
REPRESENTA UNA DEBILIDAD O UNA FORTALEZA CON:
4 = MAYOR FORTALEZA
3 = MENOR FORTALEZA
2 = MENOR DEBILIDAD
1 = MAYOR DEBILIDAD
LAS CALIFICACIONES SE BASAN EN LA EMPRESA. MIENTRAS QUE LOS PESOS DEL PASO 3 SE
BASAN EN LA INDUSTRIA,

5. - MULTIPLIQUE EL PESO DE CADA FACTOR POR SU CALIFICACION PARA OBTENER UNA

CALIFICACIÓN PONDERADA.

6.- SUME LAS CALIFICACIONES PONDERADAS DE CADA UNA DE LAS VARIABLES PARA
DETERMINAR EL TOTAL PONDERADO DE LAEMPRESA.

VALORES MUY POR DEBAJO DE 2.5. SIGNIFICAN ORGANIZACIONES INTERNAMENTE MUY

DEBILES, MINETRAS QUE CALIFICACIONES MUY POR ENCIMA DE 2.5 REPRESENTAN
EMPRESAS MUY FUERTES.

CUANDO UN FACTOR INTERNO ES UN FUERZAY AL MISMO TIEMPO UN DEBILIDAD, SE DEBE

INCLUIR DOS VECES EN LA EFI Y A CADA UNO SE LE ASIGNARA UN PESO Y CALIFICACION.
EMPRESAS CON MUCHAS DIVISIONES, CADA DIV. UTÓNOMA O U.E.N. DEBE PREPARAR SU
EFI. Y DESPUES SE INTEGRAN PARA CREAR UNA MATRIZ GENERAL CORPORATIVA.
EFE Matrix – Jewelry Example
CALIFICAC PESO
FACTORES DETERMINANTES PESO IÓN PONDERAD
O
OPORTUNIDADES De 1 a 4
Incremento de Capacidad Adquisitiva 0.15 3 0. 45
Desarrollo de Aplicaciones Informáticas para diseño gráfico 0.10 4 0.40
Reducción de costos de tecnología orfebre 0.10 3 0.30
Tendencia creciente de las transacciones por Internet 0.05 4 0.20
Preferencia de turistas extranjeros por compra de joyería de nativos 0.05 1 0.05

CALIFICAC PESO
FACTORES DETERMINANTES PESO IÓN PONDERAD
O
AMENAZAS De 1 a 4
Incremento del precio de los metales 0.15 2 0.30
Tase creciente de robos en los centros comerciales 0.10 2 0.30
Proveedores con alto poder de negociación 0.15 2 0.30
Preferencia de los clientes por marcas extranjeras de joyas 0.10 2 0.20
Tendencia creciente por el uso de la bijoutería 0.05 3 0.15

TOTAL 1.00 2.55

IFE Matrix – Jewelry Example
CALIFICAC PESO
FACTORES DETERMINANTES PESO IÓN PONDERAD
O
FORTALEZAS De 3 a 4
Ubicación dentro del centro comercial 0.15 4 0.60
Modelos diseñados con exclusividad 0.15 4 0.60
Cartera de clientes potenciales 0.10 4 0.40
Personal técnico con gran experiencia 0.10 4 0.40
Diversidad de formas de pago 0.05 4 0.20

PESO
CALIFICAC PONDERAD
FACTORES DETERMINANTES PESO
IÓN O
DEBILIDADES De 1 a 2
Poca Inversión en seguridad 0.10 1 0.10
Proceso productivo tercerizado 0.05 2 0.10
Limitado control de calidad 0.15 1 0.15
Espacio limitado 0.05 2 0.10
Falta de experiencia en el rubro 0.10 1 0.10

1.00 2.75
ATRACTIVENESS OF A MARKET
vs.
COMPETITIVE POSITION
OF THE COMPANY
 ATRACTIVENESS OF A MARKET VS. COMPETITIVE
POSITION OF A COMPANY

This analysis give a more clear diagnostics of the present

and future situation of a product business unit and provide
better guidelines for the decision making in strategic
planning.

Taking more key factor in considerations, the IE Matrix also

complement the results from the BCG Matrix for the product
portofolio management.

It also shows the business units with best potential in order to

priorize the resources investment on them and focus the
development efforts.
 What strategies should be
apply according to the IE
Matrix results?

Jewelry example
4.00
Market Penetration

3.00 • Improve customers purchase

offering a packaga collection
Total EFE

with a collar, earrings and

ring.
2.00 • Attract registered customers
from main competitors
through a direct marketing
sales promotion using the
1.00 information of a database.
4.00 3.00 2.00 1.00 • Attract potential customer
designing new models for
Total EFI teenagers.

Product Development
• Desing a fine jewerly line.
MARKET ATRACTIVENESS VS. POSITION OF THE COMPANY
(I.E. MATRIX OR G.E. MATRIX O MC KINSEY MATRIX)

ESTRATEGIC
DECISION
MARKET ATRACTIVENESS

WEAK MEDIUM STRONG

GO AHEAD
Invest,
1 4 7 Grow
WATCH OUT
Proyect
2 5 8 Keep
Mantein
3 6 9 STOP
Gather
STRONG MEDIUM WEAK STOP
Reduce
Disinvest
COMPETITIVE POSITION
OF THE COMPANY
Internal - External Matriz : IE Matrix

GROW INGAND
BUILDING
Market • Three main strategic
Penetration
Market scenarios
Development
Product
Development
Backward and
Foward KEEPIING AND
– Gather y disinvest: se
Integration MANTEINING
recomienda volver a evaluar la
Horizontal Market
Integration Penetration
Product
propuesta de valor
Concentric Development
Integration – Keep y mantein
– Grow and Build
GATHERING OR
DISINVESTING
STRATEGIC GUIDELINES UPON IE MATRIX CUADRANTS

• Invest in restructuration
• Protect Position
• Restructure strong • Selective restructuration
• Invest to grow
points • Buscar subsanar
• Concentrate efforts in
• Reinforce vulnerables deficiencias
keeping position
areas

• Invest in atrractive
• Limit expansion or
markets
• Concentration in Gathering
• Counteract
profitable segments • Take low risk growing
competency
with low risk • Minimize invesments
• Increase production
• Operational rationalization
capacity

• Protect position in the • Disinvesment

• Protect and refocus
most profitables markets • Sale in the right moment
• Concentration in
• Improve line of maximizing value
attractive segments
products • Reduce fix cost
• Defend strongholds
• Reduce investment • Avoid investments
WHICH IS THE RIGHT SRATEGY ACCORDING
TO THE RESULTS OF THE DIAGNOSTIC?

COMPETITIVE POSITION (Internal)

Strong Weak

Fast
I II
1.- MARKET DEVELOPMENT 1.- MARKET DEVELOPMENT
2.- MARKET PENETRATION 2.- MARKET PENETRATION
3.- PRODUCT DEVELOPMENT 3.- PRODUCT DEVELOPMENT
4.- BACK./FORWARD INTEGRATION 4- HORIZONTAL INTEGRATION
5.- HORIZONTAL INTEGRATION 5.- DISINVESTMENT
6.- CONCENTRIC DIVERSIFICATION 6.- LIQUIDATION OR DISSOLUTION
MARKET
GROWING
(External) IV III
1.- ENTRENCHMENT
1.- CONCENTRIC DIVERSIFICATION 2.- CONCENTRIC DIVERSIFIC.
2.- HORIZONTAL DIVERSIFICATION 3.- HORIZONTAL DIVERSIFICATION
3.- CONGLOMERADE DIVERSIFIC. 4.- CONGLOMERADE DIVERSIFIC.
4.- JOINT VENTURES ENTERPRISES 5.- DISINVESTMENT
6.- LIQUIDATION OR DISSOLUTION
Slow