Page 163 - DCOM507_STOCK_MARKET_OPERATIONS

Stock Market Operations

Notes one shown in Figure 8.1. Each factor, minor or major weakness is displayed. Of course, not all
factors are equally important for succeeding in business. Therefore, it is necessary to rate the
importance of each factor – high, medium or low. When combining performance and importance
levels, four possibilities emerge.

Figure 8.1: Importance – Performance Matrix
Performance

Low High
High A. Concentrate here B. Keeping the good work

Importance Low C. Take enough care D. If overkill, divert

!

Caution This analysis provides norms for management attention. For example, an industry
is performing poorly in a high priority area. It should hence concentrate here. If the
industry strategy is not addressed to this, it becomes unattractive to the investor.
Self Assessment

Fill in the blanks:
6. …………………….... growth industries are those that are greatly influenced by technological
and economic changes. The airline industry can be cited as an example.
7. …………………….... stage is characterized by introduction of a new product, and an uptrend
in business cycle that encourages new product introductions. Demand keeps on growing
at an increasing rate.
8. An industry reaches …………………….... stage when it fails to detect the death signal and
implement – proactively or reactively – appropriate strategies.

8.4 Forecasting Methods

The techniques for analyzing information about industry within a time framework are briefly
explained in this section.

8.4.1 The Market Profile

A market profile consists of those endogenous characteristics that have a significant bearing on
demand or the way in which it can be developed. Its basic elements are:
 Number of establishments

 Geographical location of establishment
 Number of employees
 Value of sales
 Value added by manufacturing

 Capital expenditures

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