Objective: Develop an Internal Factors Analysis Summary (IFAS) for Chipotle
Mexican Grill through 2013.
Internal factors are those the firm has control over. I will be doing
reality checks when reading your work, asking, “Does the firm control this
activity or not?” For instance, a firm has control over the dates to
release new products, or what products to sell each year. But, the firm does
not control the economic conditions that would determine the demand for those
products.
Fill in the table in TemplateSA-EXH2-IFAS.docx available in this
location and Course Resources. 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. But a wiser student would modify the names so this
situation does not arise.
The textbook is clear enough to work on all columns but the Comments. Your
comments make all the difference in the quality of the EFAS.
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 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.
For the QPI comments, estimate the potential impact on the firm 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 the firm’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, the firm 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.
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.
—
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.
To facilitate the Excel calculations, your 5-Y Financials has already the
formula and connections for the 1st year of your case. Review those
formulas to understand what is going on. Then, copy/paste that column for the
other remaining years.
