Quarry, Inc Term Paper

Pages: 7 (2054 words)  ·  Style: APA  ·  Bibliography Sources: ≈ 3  ·  File: .docx  ·  Topic: Business

¶ … Quarry, Inc.

A shall begin my attempt by specifying that our Company, Quarry Inc., has evolved a lot in the last period and has proved that the indoor climbing activities can give birth to a whole new prosperous industry. Just like any other new domain, it has gained many adherents, which have chosen this kind of sport because of their curiosity and of the controlled risk it implies.

Even though, this does not mean it will develop to even a greater stage by itself in the future. Besides the pluses this industry implies, such as the relatively low costs, the easiness of performing the trainings for the participants and the facility of managing a profile company, there are also many disadvantages, like the high rivalry the great power of the buyer and the high risks of the activity in itself. Therefore I propose a deeper analysis of the phenomenon generated by the indoor climbing activity and of our company in itself; since there is a need to comprise its strengths and weaknesses and to present some further developing strategies I will build up a series of mattresses which would summarize all these main points.

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I will start with an external factor evaluation matrix, to which I will adapt the five competitive forces developed by Porter and I will present the advantages and the disadvantages they generated in the industry and their non-direct effect on Quarry Inc. Furthermore, I will build up an internal factor evaluation matrix, to which I will apply again Porter's criteria, thus anticipating their direct influence on our company by emphasizing the advantages and disadvantages we might encounter. The last step of my report is going to be represented by a SWOT matrix which would comprise the strong and the weak points of our positioning in the industry, based on the previous analyses.

Term Paper on Quarry, Inc. Assignment

As I have mentioned before, my attempt will start with the external evaluation matrix. This exercise of evaluation has the role to identify the opportunities and threats that exist in the nearby area of our company. The way to differentiate between the elements of an external evaluation matrix and the ones of an internal one - the strengths and weaknesses - is to ask if the debated issue would exist if the company would not exist. "Opportunities refer to favorable conditions in the environment that could produce rewards for the organization if acted upon properly. That is, opportunities are situations that exist but must be acted on if the firm is to benefit from them. Threats refer to conditions or barriers that might prevent the firm from reaching its objectives."

External factor evaluation matrix

Porter's forces

Opportunities

Threats

Supplier's power

Threat of substitutes

Barriers to entry

Buyer's power

Degree of rivalry

My analysis has begun with the first criterion identified by Porter, meaning the power of the supplier. As the surrounding industry can prove, our possibility of choice among suppliers is very limited, because we work in a relative new domain and there are not many companies that produce or would choose to produce the equipments we need, because of the risks involved, meaning that their products would not have a market place. Therefore our supplier's power is very strong, which could be a disadvantage for us because it can become a monopolistic company which could impose higher prices and diminish our freedom of choice. On the other hand, I could not identify any opportunity in the fact that we work with a powerful supplier.

The second force identified by Porter is the threat of substitutes. The indoor climbing could be provided with a lot of substitutes for the equipment, which might prove to be a real advantage on the market, but this could also lead to a great disadvantage represented by the potential high prices for these new equipments.

In what the barriers to entry are concerned - Porter's third force - there are not many, because there are not high costs which would generate the appearance of a new company in the field, therefore it is quite accessible. Thus this is preceded by a big threat, represented by the high competition. Once again, I could not identify any advantage in this.

The forth force of Porter is the buyer power, which is decisive in the indoor climbing industry. One might say that this is a characteristic of all the other industries, but it should be kept in mind that the power of decision of the buyer is very high, since there are many sports he can choose, or he might rather prefer the indoor climbing, just because it is healthier - since it is an outside activity - and, for the adrenaline seekers, it implies more risks. As it could have been predicted, this high statute of the buyer can not lead to any advantage.

The last criterion is represented by the degree of rivalry in the field. Since it is a new domain of interest, the indoor climbing industry is very accessible, in the sense that such a business would not come with high costs and, on the other hand, the field has proven to be successful, because of its originality. The degree of rivalry is high, with new companies entering a low-cost, potentially high profit industry.

The Internal Analysis of strengths and weaknesses "focuses on the internal factors that give an organization certain advantages and disadvantages in meeting the needs of its target market. Any analysis of this kind should be market oriented/customer focused, because strengths are only meaningful when they assist the firm in meeting customer needs. Weaknesses refer to any impediments a company meets when developing or implementing a strategy." Just like in the case of the external factor evaluation matrix, I developed an analysis based on the Porter's five competitive forces.

Internal factor evaluation Matrix

Porter's forces

Strengths

Weaknesses

Supplier's power

Threat of substitutes

Barriers to entry

Buyer's power

Degree of rivalry

Thus, the first one, the high power of the supplier, could generate a high weakness for our company, in the sense that we can become dependent on them and this might lead to our lack of freedom of choice. On the other hand, the continuous growth of its supplier might be a real strong point for Quarry Inc., as the company which furnishes its equipment might turn into a famous brand and this could lead to the growth of the fame of Quarry Inc.as well.

The second force analyzed by Porter, the threat of substitutes, might be a real strength for our company, because the diversity of equipments might attract new clients. Even though, the multitude of substitutes can also be a decisive weakness for our company, as the investment in new equipments implies high cost we might not be able to face. In addition, the use of the new equipments will surely involve a certain degree of difficulty, so there will be need of an additional personnel training and additional costs. At a first glance, this might not seem to be a successful investment, but what should be kept in mind is that we might not be able to survive without it on the market field. In what Porter's third competitive force is concerned -the barriers to entry-, as I have mentioned before, this should not be of a high concern for us, since it did not lead to any internal direct disadvantage for us; it has instead proven to be a real advantage, as we have benefited from an obvious accessibility when we have joined the indoor climbing industry field.

Despite this, the great power of the buyer has not turned into strength for Quarry Inc., since their freedom of choice did not bring us any profit but a real weakness I would say, as we had first of all to awaken the interest of the people for this sport and then to reduce our prices in order to preserve it.

On the other hand, the small degree of rivalry in the field - generated by the originality of the domain - represents one of our main sources of profit. The continuous flow of clients will certainly increase the size of Quarry Inc. And might even transform it into a brand. I might be prove to be too optimistic but I can even foresee a transformation of it into a monopolistic company in the nearby future. But this might not be for long, because the prosperous industry will attract for sure new adherents.

The role of the SWOT Matrix is to help us to visualize the analysis I have developed. It is also very important for you to understand how these elements work together:

SWOT Matrix

Internal

External

Strengths - 7

Opportunities - 3

Weaknesses -6

Threats - 4

What it seems obvious is that we succeeded to identify six strengths in our internal evaluation and only three weaknesses. On the other hand, on the external plan, the number of threats seems to be bigger than that of the opportunities. Thus… [END OF PREVIEW] . . . READ MORE

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