Amazon.com Analysis

Strategy-Formulation Analytical Framework’s Stages

OPPERTUNITIES Weight Rate Score

Use of Trans fat oils 0.08 4 0.32

Less price 0.12 4 0.48

Low fat food 0.08 2 0.16

Wide variety in menu 0.10 3 0.30

Ambience 0.12 3 0.36

External Factor Evaluation

Threat Weight Rate Score

Direct Competitors Are much larger.

.04 4 0.16

Global Recession .08 3 0.24

Competitors Financial Position .07 4 0.28

Fraudulent Cases .03 2 0.06

Customer Awareness .06 2 0.12

Dynamic Environment .03. 2 0.06

Total of Opportunities & Threat 1 2.54

External Factor Evaluation

Strength Weight Rate Score

Customer liking .09 4 0.36

Considered High ranking brand

.08 4 0.32

Innovators in product services

.11 4 0.44

Earning from international market

.10 3 0.30

Rich in taste (sandwich) then its competitors

.12 4 0.48

Internal Factor EvaluationInternal Factor Evaluation

Weakness Weight Rate ScoreNet income decrease .10 2 0.20

Decline revenue overseas .10 2 0.20

Restaurant closures .08 2 0.16

Increase in cost of operations

.13 2 0.26

Decline in assets and share holder equity

.09 2 0.18

Total of Strength & Weakness

1 2.90

Internal Factor EvaluationInternal Factor Evaluation

Critical Success Factor

Weight Mc. DonaldsRating

score BKC Rating

Score

WENDEY’S

Score

Innovators .05 3 0.15 3 0.15 4 0.20

Sales Efficiency

.10 4 0.40 4 0.40 3 0.30

Price Competition

.10 4 0.40 4 0.40 4 0.40

Global Expansion

.20 4 0.80 3 0.60 2 0.40

Product range .10 4 0.40 4 0.40 3 0.40

Advertising .20 4 0.80 3 0.60 2 0.40

Market Share .05 4 0.20 3 0.15 2 0.10

Product Quality .20 4 0.80 4 0.80 4 0.80

TOTALTOTAL 11 3.953.95 3.53.5 3.03.0

Strengths – SCustomer liking





Weaknesses – W

Net income decrease

Decline revenue overseas

Restaurant closuresIncrease in cost of operationsDecline in assets and share holder equity

Opportunities – O Use of Trans fat oils Less priceLow fat foodWide variety in menuAmbience

SO Strategies

(S2+O2) =

(S4+O3) = Development of Social

Net Work

(S1+O1,5) = Service Development

(S7,S8+O4) = Offering Seasonal

Discount

WO Strategies

(W3,4+O1,2) = Possible Availability

Every Time

Threats – TDirect Competitors Are much larger. Global RecessionCompetitors Financial PositionFraudulent CasesCustomerAwarenessDynamic Environment

ST Strategies

(S3+T2) = Strong Political Analysis

(S9+T4) = Market Diversification

(S5+T1) = Reasonable Spread Margin

(S3+T3) = Continue Development

WT Strategies

(W2+T3) = Increased Brand Range

SPACE MatrixAggressive

Conservative

Defensive

Competitive

Internal DimensionsInternal Dimensions

Financial Strength

Competitive Advantage

External DimensionsExternal Dimensions

Environmental Stability (ES)

Industry Strength (IS)

Internal Strategic Position

External Strategic Position

Financial Strength Rate Environmental Stability Rate

Current Ratio 5 (1.33) Technological changes -1

Return On Investment 5 (11%) Rate of inflation -2

Leverage 1 (2.89) Growth in Demand -3

Liquidity 4 (0.98) Price range of competing products -1

Working Capital 4 (0.79) Barriers to entry -4

Proprietary Ratio 2 (9.87%) Risk involved in business -4

Cash Cycle 5 Competition -1

TOTAL 26 TOTAL -16

AVERAGE (26/7) 3.71 AVERAGE (-16/7) -2.28

Internal Strategic Position External Strategic Position

Competitive Advantage Rate Industry Strength Rate

Market share -1 Growth potential 5

Customer Loyalty -1 Profit potential 4

capacity utilization -3 Financial stability 4

Technological know-how -1 Technological know-how 5

Control over suppliers & distributors

-1 Resource utilization 5

Ease of entry into market 4

TOTAL -7 TOTAL 27

AVERAGE(-7/5) -1.4 AVERAGE(27/6) 4.5

FS+6

+1

+5+4+3

+2

-6

-5

-4

-3

-2

-1-6 -5 -4 -3 -2 -1 +1 +2 +3 +4 +5 +6

ES

CA IS

Conservative Aggressive

Defensive Competitive

x-axis = CA(-1.4)+IS(4.5)=3.1

Y-axis = FS(3.71)+ES(-2.28)=1.43

LOW1 to 1.99

MEDIUM2 to 2.99

HIGH 3 to 4

STRONG3 to 4

AVERAGE2 to 2.99

WEAK1 to 1.99

EFE TOTAL

SCORE

IFE TOTAL SCORE

Hold & Maintain

Wendy’s

Quadrant IV1. Concentric diversification

2. Horizontal diversification

3. Conglomerate diversification

4. Joint ventures

Quadrant III1. Retrenchment

2. Concentric diversification

3. Horizontal diversification

4. Conglomerate diversification

5. Liquidation

Quadrant I1. Market development

2. Market penetration

3. Product development

4. Forward integration

5. Backward integration

6. Horizontal integration

7. Concentric diversification

Quadrant II1. Market development

2. Market penetration

3. Product development

4. Horizontal integration

5. Divestiture

6. Liquidation

RAPID MARKET GROWTH

SLOW MARKET GROWTH

WEAK COMPETITIVE

POSITION

STRONGCOMPETITIVE

POSITION

STRATEGIC ALTERNATIVES

Product Development Market Penetration

Strength Weight AS TAS AS TAS

Customer liking .09 4 .36 4 .36


.08 3 .24 3 .24


.11 4 .44 4 .44


.10 2 .20 4 .40


.12 3 .36 3 .36



Weakness Weight AS TAS AS TAS

Net income decrease .10 2 .28 4 .40

Decline revenue overseas

.10 1 .03 4 .40

Restaurant closures .08 --- --- --- ---

Increase in cost of operations

.13 --- --- --- ---

Decline in assets and share holder equity

.09 1 .04 4 .36

Opportunities

Use of Trans fat oils 0.08 3 .24 4 .32

Less price 0.12 4 . 48 4 .38

Low fat food 0.08 4 .32 3 .24

Wide variety in menu 0.10 3 .30 4 .40

Ambience 0.12 3 .36 4 .48



Threat Weight AS TAS AS TAS

Direct Competitors Are much larger.

.04 4 .16 4 .16

Global Recession .08 2 .16 3 .24

Competitors Financial Position

.07 2 .14 4 .28

Fraudulent Cases .03 --- --- --- ---

Customer Awareness

.06 2 .12 4 .24

Dynamic Environment

.03 2 .06 2 .06



Weight AS TAS AS TAS

STAS 4.29 5.76

Both the strategies are highly desirable for Wendy’s But! 2nd Strategy “Market Penetration” more considerable than 1st “Product Development”.

Amazon.com Analysis

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