Beruflich Dokumente
Kultur Dokumente
Fred R. David
8th edition
External Audit
Chapter 3
Long-Term Objectives
Chapter 2
Chapter 5
Chapter 6
Chapter 7
Chapter 8
Chapter 9
Internal Audit
Chapter 4
External Assessment
If you're not faster than your competitor, youre in a tenuous position, and if youre only half as fast, youre terminal.
George Salk
Ch. 3-3 2001 Prentice Hall
Focuses on identifying & evaluating events beyond the immediate control of the firm
Ch. 3-6 2001 Prentice Hall
Increased foreign competition Population shifts Demographics (e.g., aging population) Information technology
Ch. 3-7 2001 Prentice Hall
Technological forces
Competitive forces
Ch. 3-11 2001 Prentice Hall
Ch. 3-12
Involve as many managers & employees as possible Gather competitive intelligence Information about social, demographic, cultural, environmental, etc. Monitor sources of information (key magazines, articles, etc.) Utilization of Internet Suppliers, distributors, customers as sources of information
Ch. 3-13 2001 Prentice Hall
Important to achieving long-term objectives Measurable Applicable to all competing firms Hierarchical
Ch. 3-15 2001 Prentice Hall
Market share Breadth of competing products World economies Proprietary & key account advantages Price competitiveness Technological advancements Interest rates
Ch. 3-16 2001 Prentice Hall
Economic Forces
Monitor Key Economic Variables:
Availability of credit Level of disposable income Interest rates Inflation rates Money market rates Federal government budget deficits Gross domestic product trend Consumption patterns
Ch. 3-17 2001 Prentice Hall
(Contd)
Unemployment trends Worker productivity levels Value of the dollar in world markets Stock market trends Foreign countries economic conditions Import/export factors Demand shifts for goods/services Income differences by region/customer
Ch. 3-18 2001 Prentice Hall
(Contd)
Price fluctuations Exportation of labor & capital Monetary policies Fiscal policies Tax rates ECC policies OPEC policies LDC policies
Ch. 3-19 2001 Prentice Hall
North America
Oceania
305 m
30 m
392 m
46 m
28.52
53.33
Ch. 3-22
Poor, Minorities?
Answer: Yes!
Internet revolution is widening the gap between rich & poor 42% U.S. households have personal computers 80% of them are in households w/family income > $75,000
Ch. 3-24 2001 Prentice Hall
90% shares of common stock of American companies held by the wealthiest 10% of Americans
Ch. 3-25 2001 Prentice Hall
Life expectancy rates Per capita income Attitudes toward business Average disposable income Buying habits Ethical concerns Attitudes toward saving
Ch. 3-27 2001 Prentice Hall
Racial equality Average level of education Government regulation Attitudes toward customer service Attitudes toward product quality Energy conservation Social responsibility
Ch. 3-28 2001 Prentice Hall
Value placed on leisure time Recycling Waste management Air & water pollution Ozone depletion Endangered species
Ch. 3-29 2001 Prentice Hall
Worldwide trend toward similar consumption patterns Global buyers & sellers E-commerce Instant transmission of money & information across continents
Ch. 3-33 2001 Prentice Hall
protection laws Equal employment legislation Level of government subsidies Antitrust legislation/enforcement Sino-American relationships Russian-American relationships European-American relationships
Ch. 3-35 2001 Prentice Hall
relationships Import-export regulations Monetary policy Political conditions in other countries Government budgets World oil, currency, & labor markets Location and severity of terrorist activities
Ch. 3-36 2001 Prentice Hall
Technological Forces
Technological Change
Altering life cycles of products Increasing speed of distribution Creating new products & services Erasing limitations of traditional geographic markets
Competitive Forces
External Audit & Competing Firms
Sources:
Moodys
Manuals Standard Corporation Descriptions Value Line Investment Surveys Duns Business Rankings Standard & Poors Industry Surveys Industry Week Forbes, Fortune, Business Week
Ch. 3-42 2001 Prentice Hall
Seven Characteristics Market share matters Understand what business you are in Broke or not, fix it Innovate or evaporate
Ch. 3-43 2001 Prentice Hall
Seven Characteristics
Acquisition
Global Challenge
Differences U.S. and MNCs
& threats
factor
a weighted score
Ch. 3-49 2001 Prentice Hall
Highest possible weighted score for the organization is 4.0; the lowest, 1.0. Average = 2.5
Ch. 3-50 2001 Prentice Hall
Weight .15
Rating
Weighted score
1 3 1 4
.10
.10
3
2
.30
.20
Threats
Legislation against the tobacco industry
.05
.05 .10 .20 1.00
3
2 2 1
.15
.10 .20 .20 2.10
Ch. 3-51
UST (in the previous example), has a total weighted score of 2.10 indicating that the firm is below average in its effort to pursue strategies that capitalize on external opportunities and avoid threats.
Ch. 3-53 2001 Prentice Hall
Important
Understanding of the factors used in the EFE Matrix is more important than the actual weights and ratings assigned.
Identifies firms major competitors and their strengths & weaknesses in relation to a sample firms strategic position
(CPM)
Critical Success Factor Advertising
Avon
LOreal
0.20
Product Quality
Price Competition Management Financial Position Customer Loyalty Global Expansion Market Share
0.10
0.10 0.10 0.15 0.10 0.20 0.05
1 4 3 4 4 4 4 1
0.20
0.40
0.30 0.40 0.60 0.40 0.80 0.05
4 4 3 3 3 4 2 4
0.80
0.60
0.40
0.30 0.30 0.45 0.40 0.40 0.20
3
4 3 3 2 2 3
0.30
0.40 0.30 0.45 0.20 0.40 0.15
Total
1.00
3.15
2001 Prentice Hall
3.25
2.80
Ch. 3-56
America Online Chief Information Officer (CIO) Chief Technology Officer (CTO) Competitive advantages Competitive analysis Competitive intelligence (CI) Competitive Profile Matrix (CPM)
Critical success factors Cyberspace Decruiting Director of competitive analysis Downsizing Econometric models Environmental scanning External audit External Factor Evaluation (EFE) Matrix
Ch. 3-57
Lifecare facilities Porters Five-Forces Model Netscape On-Line databases Rightsizing Trend extrapolation World Wide Web (www)