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194 PART 2 • STRATEGY FORMULATION

TABLE 6-7 A QSPM for a Retail Computer Store
STRATEGIC ALTERNATIVES
1 2
Buy New Land
and Build New Fully Renovate
Larger Store Existing Store
Key Factors Weight AS TAS AS TAS
Opportunities
1. Population of city growing 10% 0.10 4 0.40 2 0.20
2. Rival computer store opening 1 mile away 0.10 2 0.20 4 0.40
3. Vehicle traffic passing store up 12% 0.08 1 0.08 4 0.32
4. Vendors average six new products/year 0.05 — —
5. Senior citizen use of computers up 8% 0.05 — —
6. Small business growth in area up 10% 0.10 — —
7. Desire for Web sites up 18% by Realtors 0.06 — —
8. Desire for Web sites up 12% by small firms 0.06 — —
Threats
1. Best Buy opening new store nearby in 1 year 0.15 4 0.60 3 0.45
2. Local university offers computer repair 0.08 — —
3. New bypass for Hwy 34 in 1 year will divert traffic 0.12 4 0.48 1 0.12
4. New mall being built nearby 0.08 2 0.16 4 0.32
5. Gas prices up 14% 0.04 — —
6. Vendors raising prices 8% 0.03 — —
1.00
Strengths
1. Inventory turnover increased from 5.8 to 6.7 0.05 — —
2. Average customer purchase increased from $97 to $128 0.07 2 0.14 4 0.28
3. Employee morale is excellent 0.10 — —
4. In-store promotions resulted in 20% increase in sales 0.05 — —
5. Newspaper advertising expenditures increased 10% 0.02 — —
6. Revenues from repair/service segment of store up 16% 0.15 4 0.60 3 0.45
7. In-store technical support personnel have MIS college degrees 0.05 — —
8. Store’s debt-to-total assets ratio declined to 34% 0.03 4 0.12 2 0.06
9. Revenues per employee up 19% 0.02 — —

Weaknesses
1. Revenues from software segment of store down 12% 0.10 — —
2. Location of store negatively impacted by new Hwy 34 0.15 4 0.60 1 0.15
3. Carpet and paint in store somewhat in disrepair 0.02 1 0.02 4 0.08
4. Bathroom in store needs refurbishing 0.02 1 0.02 4 0.08
5. Revenues from businesses down 8% 0.04 3 0.12 4 0.16
6. Store has no Web site 0.05 — —
7. Supplier on-time delivery increased to 2.4 days 0.03 — —
8. Often customers have to wait to check out 0.05 2 0.10 4 0.20
Total 1.00 4.36 3.27