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EXTERNAL ANALYSIS CHECKLIST
GOAL:
TO DETERMINE A FIRM's EXTERNAL OPPORTUNITIES AND THREATS
DIRECTIONS: For each item below, circle the number on the scale that best corresponds to your honest assessment of the external situation faced by your firm. Numbers to the left on the scales correspond to situations with greater threats while numbers to the right correspond to situations with greater opportunities.
PORTER'S FIVE COMPETITIVE FORCES
POTENTIAL ENTRY
How difficult is it for new firms to enter your market?
Easy 1-----2-----3-----4-----5 Difficult
How many options exist for discouraging new firms from entering your market?
Few 1-----2-----3-----4-----5 Many
SUPPLIER POWER
How much bargaining power do your suppliers have?
Much 1-----2-----3-----4-----5 Little
How many options exist for lessening supplier power?
BUYER POWER
How much bargaining power do your buyers have?
How many options exist for lessening buyer power?
Few 1-----2-----3-----4-----5 Many
POTENTIAL SUBSTITUTES
How many alternatives do buyers have for getting the benefits of your products or services in some other way?
Many 1-----2-----3-----4-----5 Few
How many options exist for improving your price-performance tradeoff?
How many options exist for finding less substitute-sensitive customers?
RIVALRY
What level of intensity exists int he rivalry between your and your direct competitors?
High 1-----2-----3-----4-----5 Low
How strong are these direct competitors?
Strong 1-----2-----3-----4-----5 Weak
How many options exist for taking on these competitors head to head?
How many options exist for picking areas of the market that are not so competitive?
THE CHANGE FORCES
Changes in buyer demand, i.e., what buyers wand and need.
Consider changes in tastes, lifestyles, customer income, preferences for unique products/services, etc.
Little Change
1----2----3----4----5
Much Change
List Key Changes:
Changes in long-term market growth rate.
Consider changes in industry growth, population growth, product/service attractiveness to customers, market saturation, etc.
Product and marketing innovation.
Consider innovations in product/service features, quality, packaging, promotion, advertising, distribution, etc.
List Key Changes:
Technological change and the speed with which it spreads.
Consider changes in equipment, production methods, biotechnology, computers, information systems, and the speed with which industry competitors or customers adopt these changes.
Regulator influences and government policy changes.
Consider changes in environmental, business, and land-use laws and regulation.
Changes in uncertainty and business risk.
Consider changes in business liability, volatility of markets, ability to forecast effectively, etc.
Major changes in the economy.
Consider changes int he levels of employment, investment, interest rates, etc.
Increasing globalization of the industry.
Consider changes in imports, exports, global competition, etc.
