There   should be 5 strategic factors for Strengths and 5 strategic factors for   Weaknesses.

Internal   factors are those the firm has control over.  “Does Amazon control this activity or   not?” For instance, Amazon has control over the dates to release new   products, or what products to sell each year. But Amazon does not control the   economic conditions that would determine the demand for those products.

Fill   in the table in TemplateSA-EXH2-IFAS. The table has five columns:   Internal Factors, Weight, Rating, Weighted Score and Comments.

Use   short names for the factors but flesh them out in the comments so they make   sense when you approach them later on. A generically named factor can be   listed on both the EFAS and IFAS so long as the comments made the difference   clear between the two. You should modify the names, so this situation does   not arise.

Your   comments make all the difference in the quality of the EFAS.

Use the template for Exhibit 2 – IFAS

Use   the TemplateSA-EXH2-IFAS.docx as the template for your work.   Ensure that your format displays correctly and is readable.  Do   NOT copy from the text or from the Template IFAS text!  Use your own   critical analysis and critical thinking.  The template is provided to   assist you with the layout–i.e., make it easy for you to construct the   chart.  The template also gives you a good idea of the appropriate   explanations required in the Comments blocks about the why an SF, potential   quantified impact, how weighted, and how rated.

Comments Column

Comments   are expected to be 4-5 sentences in length and depth and offer a clear   explanation of the strategic factor (SF) in 4 aspects:

• Why it is a strategic factor (SF), core competency (CC) or        distinctive competency (DC); (1-2 sentences only)
• A quantified estimate of the potential impact (QPI) of the SF; (1        sentence only)
• How you assign the weight; (1 sentence only) and
• How you assign the rating. (1 sentence only)

Keep   the 4-5 sentences of your Comments in order for clarity and ease of   understanding.  The recommended order is:  Why SF comments; QPI   comments; Weight comments; and finally Rating comments.

How   to write the Why SF and QPI comments: For   the Why SF, explain WHY you selected this SF, WHY it is important to Amazon, and   WHAT is the potential impact on Amazon in the future. Clearly identify your   Core Competencies (CC) and Distinctive Competencies (DC) in the IFAS Comments   column.

For   the QPI comments, estimate the potential impact on Amazon in the future in a   quantitative manner using some metric:  sales, revenues, costs, market   share, profits, logistics pipeline, CSI, etc.  Express the quantitative   potential impact (QPI) in Dollars $$.  If you express the potential   impact in $$, that makes each strategic factor comparable against   the other strategic factors. And expressing the impact in sales makes them   even more easily comparable.   Make sure you are making significant   estimates based on the size of your company based on annual   revenue values in your 5-Y financials. You develop this estimate.

The   monetary value of the QPI is useful to compare the   strategic factors and rank them in relevance.  Ranking them   will help you to assign the Weights (2nd column   in the table) to each strategic factor. Use a positive analysis (quantitative)   rather than a normative analysis (feelings, desires).  Focus on what   is the potential gain for your SF opportunities or the   potential loss from a SF threat in the future.  History   lessons are not needed nor applicable.  You should estimate and predict   the impact in the future. Be creative. 

Don’t   develop future actions or alternatives here in the IFAS about how a firm may or should take action on a   particular SF.  The brainstorming development of those alternative   actions comes with the TOWS Analysis that we will start presenting in Module   4.

HINT:  To focus your thinking on addressing “why” you selected   each SF and “why it is important,” start your “why select/important” sentence   with words like this:  “I selected this SF because…..” or “This SF is   important because…”  By using this lead-in phrase you should be able to   concisely state why that particular SF is important.

HINT:  To focus your thinking on addressing the quantitative   potential impact (QPI) in the future of each SF, be sure your QPI sentence   contains words like this:  “potential impact of $____” or “potential   increases to ____ are $____ per year” or “reduction in sales by $____ per   year.”  Be sure to state the potential impact in dollars so you can   compare the potential impacts of your various SF.

How   to write the Weight and Rank comments: To assign   weights, explain the importance of the SF to the firm’s future   survival.  Is the SF of vital importance or low importance on a scale of   1 to 0?  What is the impact of the SF on the future survival of   the firm?  What SF has the biggest impact?  Which one(s)   are the Big Dogs?  Make a logical explanation of why the weight you have   assigned is what it is.  Comparison and ranking between SF is a useful   technique to assign the weight.  See your potential $$$ impacts from   your “Why” analysis above. The bigger the $$$ impact is, the bigger the   weight should be.  Remember the weight column adds to 1.0.

HINT:  To focus your thinking on addressing the importance of   the SF to Amazon’s future survival, be sure to include the key word   “survival” in your weight sentence.

To   assign ratings provide an explanation of how   well, or how badly, Amazon is handling each specific external   SF RIGHT NOW – not in the future or not in the distant past – but   right now. Use the scale of 1 – 5, poor to outstanding;   comparing the firm’s performance against the industry standard rating of   3.  Give a logical explanation of why the rating you have assigned is   what it is.  Do they handle it well or are they lost?  Are they   performing in average way as other competitors are? Remember the industry   average performance is rated at 3.

HINT:  To focus your thinking on addressing how well your firm   is handling each SF, understand what the 1-5 scale means and then use your   rating number from the rating column with matching words (low, average, above   average, high, etc) in your rating sentence.

Example   of a good comments block:

SF   – Competent Senior Leadership

This   SF was chosen because of its significant positive impact on corporate performance   in sales, costs, and industry leadership.  Senior leadership is   considered a core competency.  Top management adds significant benefit   to OPC’s profit posture and stockholder satisfaction.  Effect on the top   line future sales revenue is estimated at 25% ($100M-$150M/YR).  This SF   is weighted very high at .15 as leadership is very important to survival in   the world economy.  OPC is rated highly at 4.5 as an industry leader   with a highly competent management team.

Point of View

Remember   to keep your decision-making at the strategic level –the Big Picture level.   You are acting at the CEO/SVP level. But you are also acting at the lower   levels to brainstorm, generate alternatives, perform critical analysis, and   make recommendations to the CEO/SVP levels. The decision-maker CEO/SVP decides on   the most important strategic factors.

Use TemplateSA-EXH 4-FinRatio.docx as Reference

The   financial ratios are explained in Chapter 13 and at the end   of Understanding Financial Statements, the reading we used in   Module One.

The TemplateSA-EXH4-FinRatio.docx is   only a reference because you will perform the calculations of your financial   ratios in Excel. In fact, the 5-Y financials of the firm you are working   about has a sheet that connects the financial ratio formulas with respective   data in Balance Sheets and Income Statements for the five years of analysis   in the same workbook.

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