Fill in the table in TemplateSA-EXH 1- The table has five columns: External Factors, Weight, Rating, Weighted Score, and Comments. Use short names for the factors but fles

External Factors

Weight:

Rating:

Weighted

Score

Comments

Opportunities:

O1: Growing Market in Western States

.05

3.5

.175

This SF was chosen because of its significant potential impact on sales growth. Population increases of 1-3% per year in the primary market area should lead directly to sales growth of at least 2-3% per year and add between $8M -$12M to top line sales revenues per year. Capturing those additional revenues from the population growth are not very important to the OPC survival so the weight has a relatively low score of .05. I rated this a 3.5 since OPC does an above average job of marketing to new customers.

O2: International Growth Opportunities in SE Asia, Japan, and Korea

.25

2.5

.625

This SF was selected because of its very significant potential impact on profit growth. Successful expansion into overseas markets could potentially result in doubling the size of OPC to a firm with $800M in sales per year and increase profits from $50M to $100M per year. This SF is weighted highest at .25 since expanding internationally is vital to the survival of OPC in light of worldwide competitors and markets. I rated this low at 2.5 since OPC does not have any international experience or markets at this time.

O3: Aging U.S. Population and Demographics

.05

4.0

.20

This SF was added because of the potential for increasing sales to the older population groups as the U.S. population ages. Potential increases to sales are between $15-$20M per year due to the exceptional word-of-mouth promotion network among customers. This SF is weighted relatively low since increasing sales is important to the firm’s survival but not as important as other SF. This SF is rated high at 4.0 since OPC has a very good word-of-mouth marketing program for seniors already in operation.

O4: Internet Availability

.15

2.0

.30

I selected this SF because the expansion of Internet availability to more and more U.S. families is an important SF for all food companies to take advantage of. With consumers’ online orders expected to increase at a yearly rate of 20% across all consumer goods, OPC has an outstanding opportunity to take advantage of this trend. We can expect internet sales to become 25% of our sales revenues or about $100M per year in the next 5 years. Internet sales also could boost our market share from 50% to 70% in the western states. This SF could have a very significant impact on sales and on survival so the weight is high at .15. OPC scores well below industry standard here at 2.0 because their Internet marketing/sales process is not well developed.

O5:Trend to Healthy Lifestyles

.025

3.5

.0875

I added this SF because the trend is encompassing more and more of the U.S. and world population with important potential impact on the sales and market share of OPC. Potential positive impact of 1% (+$4M/YR) to top line sales is expected. I weighed this .025 because compared to other opportunities it is of lesser impact on the survival of OPC. I rated this 3.5 because OPC has consistently exceeded industry standard average performance in providing a healthy product to consumers.

Threats:

T1: U.S. Competition from Raspberry Pie Company (RPC) and Others

.20

4.0

.80

This SF is important because strong competition from the RPC and others threaten OPC’s market share and sales. RPC has increased its marketing efforts in the western states. Potential loss of market share from 50% to 40% or lower would directly result in sales revenues being reduced by $160M-$200M per year. This is weighted high at .20 as OPC survival depends on maintaining its market share against competition. Rated high at 4.0 as OPC market share has been maintained with an aggressive marketing program in the western states

.

T2: Imports from China

.10

2.5

.25

I selected this SF because strong worldwide competition is starting to come from Chinese imports to the west coast. These low-cost, high- quality products threaten to take away 10-20% of OPC’s west coast market share and reduce sales by $40-80M per year. This is weighted relatively high at .10 since losing that amount of sales revenues would threaten the survival of the firm. This SF is rated low at 2.5 because OPC has not countered the emergence of Chinese competition with a new marketing effort.

T3: Increasing Government Regulations

.10

4.0

.40

This SF is important because government regulations on labor use, raw material quality, environment protection and financial reform are placing an increasing additional future cost burden on OPC of about 18% ($72M/YR) of sales. Compliance costs are hurting the bottom line significantly. These costs are potentially fatal for the survival of OPC unless relief is obtained so the .10 weight is high. This SF rating is high at 4.0 because OPC is an industry leader in lobbying operations to reduce government regulation.

T4: Unionization Pressures

.05

4.0

.20

I chose this SF because potential unionization of OPC’s workforce could add 10-15% ($24M – $36M/YR) to direct labor costs and reduce the workforce’s efficiency by 10%. These adverse effects will directly increase costs and drive our prices higher which may result in lost sales and market share. Unionization is a small threat to the survival and expansion of the firm so it is weighted as .05. OPC has a very proactive employee relations program and an exceptional corporate culture that obviates unionization attempts. Rated much higher than industry standard at 4.0.

T5: New Product Competition

.025

3.0

.075

This SF is important because new products from the frozen pie sector are coming on the market to compete with OPC’s fresh pie product. This trend will continue as the population demographics supports easy-to-prepare food products. This trend could have a negative impact on future sales at a 2-3% ($8M-$12M/YR) level of impact. This is not weighted high on survival impact to OPC as frozen pies will potentially not capture a significant market share. Rating is industry average at 3.0 as OPC effectively markets the freshness and healthiness of its Olallieberry pies.

Total Scores:

1.00

3.1125

External Factors

Weight:

Rating:

Weighted

Score

Comments

Opportunities:

O1: Growing Market in Western States

.05

3.5

.175

This SF was chosen because of its significant potential impact on sales growth. Population increases of 1-3% per year in the primary market area should lead directly to sales growth of at least 2-3% per year and add between $8M -$12M to top line sales revenues per year. Capturing those additional revenues from the population growth are not very important to the OPC survival so the weight has a relatively low score of .05. I rated this a 3.5 since OPC does an above average job of marketing to new customers.

O2: International Growth Opportunities in SE Asia, Japan, and Korea

.25

2.5

.625

This SF was selected because of its very significant potential impact on profit growth. Successful expansion into overseas markets could potentially result in doubling the size of OPC to a firm with $800M in sales per year and increase profits from $50M to $100M per year. This SF is weighted highest at .25 since expanding internationally is vital to the survival of OPC in light of worldwide competitors and markets. I rated this low at 2.5 since OPC does not have any international experience or markets at this time.

O3: Aging U.S. Population and Demographics

.05

4.0

.20

This SF was added because of the potential for increasing sales to the older population groups as the U.S. population ages. Potential increases to sales are between $15-$20M per year due to the exceptional word-of-mouth promotion network among customers. This SF is weighted relatively low since increasing sales is important to the firm’s survival but not as important as other SF. This SF is rated high at 4.0 since OPC has a very good word-of-mouth marketing program for seniors already in operation.

O4: Internet Availability

.15

2.0

.30

I selected this SF because the expansion of Internet availability to more and more U.S. families is an important SF for all food companies to take advantage of. With consumers’ online orders expected to increase at a yearly rate of 20% across all consumer goods, OPC has an outstanding opportunity to take advantage of this trend. We can expect internet sales to become 25% of our sales revenues or about $100M per year in the next 5 years. Internet sales also could boost our market share from 50% to 70% in the western states. This SF could have a very significant impact on sales and on survival so the weight is high at .15. OPC scores well below industry standard here at 2.0 because their Internet marketing/sales process is not well developed.

O5:Trend to Healthy Lifestyles

.025

3.5

.0875

I added this SF because the trend is encompassing more and more of the U.S. and world population with important potential impact on the sales and market share of OPC. Potential positive impact of 1% (+$4M/YR) to top line sales is expected. I weighed this .025 because compared to other opportunities it is of lesser impact on the survival of OPC. I rated this 3.5 because OPC has consistently exceeded industry standard average performance in providing a healthy product to consumers.

Threats:

T1: U.S. Competition from Raspberry Pie Company (RPC) and Others

.20

4.0

.80

This SF is important because strong competition from the RPC and others threaten OPC’s market share and sales. RPC has increased its marketing efforts in the western states. Potential loss of market share from 50% to 40% or lower would directly result in sales revenues being reduced by $160M-$200M per year. This is weighted high at .20 as OPC survival depends on maintaining its market share against competition. Rated high at 4.0 as OPC market share has been maintained with an aggressive marketing program in the western states

.

T2: Imports from China

.10

2.5

.25

I selected this SF because strong worldwide competition is starting to come from Chinese imports to the west coast. These low-cost, high- quality products threaten to take away 10-20% of OPC’s west coast market share and reduce sales by $40-80M per year. This is weighted relatively high at .10 since losing that amount of sales revenues would threaten the survival of the firm. This SF is rated low at 2.5 because OPC has not countered the emergence of Chinese competition with a new marketing effort.

T3: Increasing Government Regulations

.10

4.0

.40

This SF is important because government regulations on labor use, raw material quality, environment protection and financial reform are placing an increasing additional future cost burden on OPC of about 18% ($72M/YR) of sales. Compliance costs are hurting the bottom line significantly. These costs are potentially fatal for the survival of OPC unless relief is obtained so the .10 weight is high. This SF rating is high at 4.0 because OPC is an industry leader in lobbying operations to reduce government regulation.

T4: Unionization Pressures

.05

4.0

.20

I chose this SF because potential unionization of OPC’s workforce could add 10-15% ($24M – $36M/YR) to direct labor costs and reduce the workforce’s efficiency by 10%. These adverse effects will directly increase costs and drive our prices higher which may result in lost sales and market share. Unionization is a small threat to the survival and expansion of the firm so it is weighted as .05. OPC has a very proactive employee relations program and an exceptional corporate culture that obviates unionization attempts. Rated much higher than industry standard at 4.0.

T5: New Product Competition

.025

3.0

.075

This SF is important because new products from the frozen pie sector are coming on the market to compete with OPC’s fresh pie product. This trend will continue as the population demographics supports easy-to-prepare food products. This trend could have a negative impact on future sales at a 2-3% ($8M-$12M/YR) level of impact. This is not weighted high on survival impact to OPC as frozen pies will potentially not capture a significant market share. Rating is industry average at 3.0 as OPC effectively markets the freshness and healthiness of its Olallieberry pies.

Total Scores:

1.00

3.1125