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Unformatted text preview: In-Class Group Work 2
Important Terms in Strategic Management
• Competitive Advantage
Competitive advantage is defined as anything that a firm does especially well compared to rival firms.
Firms should seek a sustained competitive advantage by continually adapting to changes in external trends and internal
capabilities and evaluating strategies that capitalize on those factors.
• An EFE Matrix
EFE allows strategists to summarize and evaluate economic, social, cultural, demographic, environmental, political, governmental,
legal, technological, and competitive information.
In-Class Group Work
Working in groups, answer the following questions for the McDonald’s, Subway, and YUM Brands
• Develop an EFE Matrix for MCD
Five Steps for Developing an EFE Matrix:
1) List external factors.
2) Assign a weight from 0-1 with 0 being not important and 1 being very important. The total weights assigned must equal 1.
3) Assign a 1-4 rating to each external factor based on effectiveness of each firm’s current strategy. 1 = Poor, 2 = Average, 3 = Above average, and
4 = Superior.
4) Calculate weight * rating.
5) Sum. The highest score is 4 while the lowest is 1. The average is 2.5.
TIES Weight O1: Industry Segment Growth:
Anticipated 4% growth rate in QSR
O2: International Markets:
Int’l expansion into emerging markets.
O3: Beverage market:
Increased beverage options (Gourmet
Rating Weighted Score Rating Weighted
T1: Health Consciousness :
More health conscious customers.
T2: Price War:
Intense price pressure from competitors.
T3: Negative public opinion campaigns.
TOTAL: 1.00 ...
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- Spring '08