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Calculating quantitative attractiveness ratings for the industries a company has diversified into involves selecting a set of industry attractiveness measures, weighting the importance of each
Calculating quantitative attractiveness ratings for the industries a company has diversified into involves selecting a set of industry attractiveness measures, weighting the importance of each measure, rating each industry on each attractiveness measure, multiplying the industry ratings by the assigned weight to obtain a weighted rating, adding the weighted ratings for each industry to obtain an overall industry attractiveness score, and using the overall industry attractiveness scores to evaluate the attractiveness of all the industries, both individually and as a group determining the biggest determinants of profitability in each industry, rating the ability of the company to be successful on each of the profitdetermining factors, and obtaining overall measures of the firm's ability to achieve profitability in each of the industries where it operates identifying each industry's likely growth potential, rating the difficulty of actually achieving this growth potential, and deciding whether the company's growth prospects are attractive or unattractive, industryby industry. determining each industry's key success factors, weighting the importance of each industry KSF using a scale of to to rate the company's ability to be successful in coping with each industry KSF in each industry multiplying the company's rating on each industry KSF by the respective KSF importance weights to obtain a weighted rating on each KSF adding the weighted KSF ratings to obtain an overall KSF score for each industry, and using the overall KSF scores to evaluate in which industries it is easiesthardest for the company to be highly profitable and competitively successful rating the attractiveness of each industry's strategic and resource fits, summing the attractiveness scores, and determining whether the overall scores for the industries, both individually and as a group, do or do not have attractive strategic and resource fits.
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