The document discusses concepts related to analyzing a company's external environment, including performing an external audit to identify key opportunities and threats in the general, industry, and competitive environments. It provides details on factors to consider in the economic, sociocultural, technological, legal/political, and competitive environments. Examples of tools for external analysis include the External Factor Evaluation Matrix (EFE) and Porter's Five Forces model for industry analysis.

1. EXTERNAL ENVIRONMENT Session 3 Professor Hilda L. Teodoro Ateneo Graduate School of Business

15. CPM - COMPETITIVE PROFILE MATRIX SARAP CANNER ARIES CRITICAL SUCCESS FACTORS Weight Rating Score Rating Score Rating Score 1 Product quality and performance 0.40 4 1.60 2 0.80 3 1.20 2 Effective distribution 0.20 3 0.60 2 0.40 2 0.40 3 Market share 0.15 4 0.60 2 0.30 3 0.45 4 Brand management 0.10 3 0.30 2 0.20 2 0.20 5 Customer loyalty 0.15 3 0.45 2 0.30 2 0.30 Total 1.00 3.55 2.00 2.55

16. PORTER’S 5 FORCES OF COMPETITIVE ANALYSIS THREAT OF NEW ENTRANTS BARGAINING POWER OF BUYERS RIVALRY AMONG COMPETITORS BARGAINING POWER OF SUPPLIERS THREAT OF SUBSTITUTE PRODUCTS MICHAEL E. PORTER T he collective strength of the 5 forces determines the attractiveness of the industry. The 5 forces determine industry profitability because they influence the prices, costs, and required investment of firms in an industry.

22. EFE Assign a weight to each factor Assign a 1–4 rating effectiveness of co. strategies E=Economic, S=Socio-cultural, P=Political, T=Technological, C=Competitive 2.55 1.00 Total EFE Score Started to increase its own promotional materials 0.60 3 0.20 Greater promotional resources of competitors 5-C Still rated as the most effective coxib in the market 0.60 3 0.20 Introduction of newer coxibs 4-C Lack of response to this threat 0.10 1 0.10 Unpredictable, unstable political situation 3-P Lack of response to this threat 0.05 1 0.05 Cost containment pressures from the government 2-P Cost of goods driven by mother co as supplier. 0.10 2 0.05 Increasing cost of sales due to fluctuation in peso. 1-E EXTERNAL THREAT Slow penetration of the HMO market 0.10 2 0.05 Increase in number of HMOs 5-S Rated as the most effective coxib in the market 0.60 3 0.20 Big unsatisfied acute pain market 4-S Focused on the older population coming out with medicines that address their medical problems very effectively. 0.20 4 0.05 Rapid growth of the older population 3-S Has not really taken full advantage of this increase 0.16 2 0.08 Increased level of health expenditures 2-E Hasn’t really taken advantage of the growth in GDP 0.04 2 0.02 Increased GDP level 1-E EXTERNAL OPPORTUNITIES Rating Rationale WTD Score Rat ing WT KEY EXTERNAL FACTORS