Warnick J MGMT Module 3.

2 Homework assignment

1. Complete a Porter’s Analysis to Industry Analysis on an Improved Business Industry

(not the airline industry) using the six forces. Indicate each force’s competitiveness
intensity by signifying Low-Medium-High, or a combination of two grades. Support
your evaluation on each force’s competitiveness position in the industry.

Heavy Equipment Industry

Threat of New Entry

(Low) due to any new company entering the Heavy Equipment business will need to
establish their product guarantee.

Bargaining Power of the Supplier

(High) The heavy equipment company that have already established a name for their
products are constantly bargaining for new customers. All the major companies operate
worldwide.

Bargaining Power of the Buyer

(Low) Company’s are constantly looking for the buyers market, They can configure their
products to suit any users needs. Their customer services are second to none.

Competitive Rivalry

(High)The companys have been striving to beat out their competitor by providing better
services and facilities around the globe.

Threat of Substitution

(Low) There is little to no availability of a substitute product that a buyer can find aside
from the major equipment manufacturers.

2. Discuss five trends in the external environment scanning process that will affect most
businesses.

“According to the STEEP Analysis, the scanning of Sociocultural, Technological,

Economic, Ecological and Political-legal environmental forces make up the five areas in
which corporations categorize the natural and societal environments in any one
geographic region” (Wheelen, Hunger, 2014).
Warnick J MGMT Module 3.2 Homework assignment

Sociocultural- This is when companies utilize a designated age group of their country to
develop new products and new services that are specifically driven at the selected age
group.
Technological- Is when a company utilizes it best interest through the internet to boost its
sales.

Economic- If a company is seeing an increase in its profit margin than it is more than
likely do to the countrys economy doing well. If they are seeing a decline then the
countrieseconomy is going through a decline.

Ecological- A company can be effected by the weather. If a company is in the business of

selling outdoor products for summer time use and the weather is calling for snow they
will not be moving many products.

Political-legal- political and legal are made up of government actions at the city, state,
national or even international level. US Legislation or Executive Orders can affect how a
company can perform.

3. Create a Strategic Group Map of industry (but not the airline industry) using two
broad characteristics- price and product-line. Use at least eight firms in this analysis.

Limited Product Hitachi, Volvo New Holland,

Line Massey Ferguson

Product Line Bobcat, Terex

Full Product Caterpillar, Komatsu John Deere

Line

High Price Price Low Price

Warnick J MGMT Module 3.2 Homework assignment

4. Create an Industry Matrix featuring your Strategic Audit firm and two competitors.
Use five Key Success Factors, one of which should be low cost. Use the table found in
Chapter Four for this assignment.
Key Success Weight Caterpillar Caterpilla Komats Komatsu Volvo Volvo
Factors Rating r u Rating Weighted Rating weighte
Weighted Score d Score
Score
Operational 0.3 5 1 5 0.9 4 0.8
Efficiency

Fuel 0.2 4 0.8 3 0.7 4 0.9

Efficiency

Low Cost 0.2 2 0.3 2 0.3 3 0.2

Research 0.1 3 0.5 4 0.4 5 0.4

And
Developmen
t
Technology 0.1 3 0.5 5 0.6 5 0.5
Enabled
Vehicles
Totals 3.1 2.9 2.8
Warnick J MGMT Module 3.2 Homework assignment

References

Wheelen, T. L., Hunger, J. D., Hoffman, A. N., & Bamford, C. E. (2015). Concepts in
strategic management and business policy: Globalization, innovation, and sustainability
(14th ed.). Upper Saddle River, NJ: Pearson Education.