EXTERNAL FACTOR ANALYSIS SUMMARY (EFAS) – Microsoft Corporation

FACTORS WEIGHT RATING WGTD COMMENTS

SCORE

OPPORTUNITIES
O1 North American Market Growth .15 5 .75 Do to the rising economic growth since 2016 there has been an uptick in
demand for heavy equipment and general equipment. There has been an
increase in infrastructure requirements both in the housing and commercial
sectors.
O2 Brand Loyalty .08 4 .32 Even with other Heavy and Light duty equipment companies entering the US
with products that are under the cost of Caterpillars. Caterpillar customers
have been loyal to the product and name brand and have introduce new clients
to the products offered
O3 Going Green .08 4 .32 The company is leading the way in new technologies that help to reduce
emissions and environmental impacts by heavy equipment. They are
researching into biofuel usage as well as emission filters that help trap
pollutants before escaping into the air.
O4 Lower Failure Rates .08 2 .16 They have been performing analysis on high failure items and parts and have
been working with their research team and have been developing better parts
from stronger material.
O5 New Technologies .06 3 .18 Caterpillar has been working with human factors teams in development of
console and controls that provide the operators ease of operations. They have
developed new joy stick controls and switch technologies that alleviate the
users from having to use the older style levers, twist knobs and foot pedals.

THREATS
T1 Competition .15 4 .60 Competition is still the largest threat to the company, with companies such as
Komatsu, Hitachi, John Deere making the move into a more global market at
a reduced cost has made Caterpillar move into other areas to sustain its market
values.
T2 Economy Regression Overseas .12 3 .36 Due to the global economies struggling with financial issues and the lessening
of demand for new infrastructure has put the company on watch of its overseas
marketing and sales
T3 Bargaining Power of Buyers .10 2 .20 Buyers now have more ability to influence the market and are able to redirect
other companies not as upscale as Caterpillar to meet their requirements at a
reduced cost.
T4 Rising Fuel Cost .10 4 .40 An increase and or fluctuation in the cost of crude oil by the barrel can induce
a cost fluctuation in diesel cost. This reduces time on machine and reduced
machine specific requirements. i.e. A company may use a single piece of
machinery to perform multiple jobs.

T5 Materials Cost .08 2 .16 A large effort for the company is to ensure that its materials costs remain low.
With the rising cost of steel and other materials that are required for
manufacturing can have a potential impact on sales prices as well as
manufacturing cost.

TOTAL SCORES 1.00 3.74