The fact that the Florida market (and, in fact, the overall market, since market designers can be hired over the Internet and this is, in fact, the type of activity that can pertain to online collaboration) has a reasonable number of marketing designers makes their power sensibly negligible in the equation.
The web hosting companies will be in charge with hosting the company's online website and, similar to the market designers, have a negligible power, since there is a sufficient number of web hosting companies to guarantee a certain level of competition between them that can eliminate pressure in the form of high prices or low quality services.
On the other hand, the staff that the company is going to have, in the form of individual providers (workforce can be identified as such), can exercise a certain amount of pressure. The first reason for this is that training and integrating an employee is an activity that requires a significant amount of time and money. On the other hand, this is an operation that will need to be repeated every time that an employee leaves and a new one has to be hired.
Rivalry
The company is likely to have significant rivalry on the market. First of all, there are the 319 identified companies in Florida that one will need to consider, but there are also additional areas where rivals can come from, such as Internet HR databases and job search engines. Companies with large HR departments and significant resources are also able to attract some of the candidates that Gekko Consulting and Recruiting would have otherwise placed elsewhere, thus decreasing the company's turnover.
Buyers
There are two potential categories of buyers that need to be discussed here, each with a different power in this equation. First of all, there are the small and medium sized companies, normally those that don't have an HR department or have one that is not really sufficiently developed to be able to handle the entire recruitment process (it can also include companies that have judged that, in terms of their opportunity costs, it is simpler and cheaper for them to use a third company in the recruitment process). These are in larger number and have a lower negotiation power.
On the other hand, one can also consider the large companies that, because of the increasing demand of personnel, appeal to companies such as Gekko Consulting and Recruiting so as to complete their own HR recruitment capacities and bring in an extra provider. These companies have a greater power.
Substitutes
The Internet job search engines are important substitute products that can pose a significant threat to the company. Internet job searching is simple and at a low cost both for the job seekers and the company that seeks employees. It is often an alternative to go for this type of service, especially since you have additional facilities, such as the capacity of using a candidates database to facilitate the search.
The External Factor Evaluation (EFE) Matrix
Key External
Factors
Weight
Rating
Score
Opportunities:
1. Complementary activities
2. Local business environment
3. Job search engine
Threats:
1. Competitors
2. Substitutes
Opportunities
Complementary activities. Gekko Consulting and Recruiting could expand its services portfolio to complementary activities in the human resource area, such as: training, coaching and HR efficiency assessment. This could expand both the consumer basis and the potential to increase company revenues.
Job search engine opportunities. The company could set up an internet job search engine, which would allow companies that are looking for candidates to have access to a large virtual database in exchange for a given fee. This option involves low maintenance costs. Client companies would have the option of listing job offers in exchange for another fee.
The local business environment. Florida is going through a major economic growth period, which indirectly implies increased employment, increased job migration and fluctuation.
Threats
Competitors constitute a threat worth taken under consideration for any company. In Florida the number of companies with the same profile as Gekko Consulting and Recruiting is considerably high, and this makes competition quite tough.
Substitutes, such as internet job search engines, can be treated threats, not only as opportunities. They offer the possibility of incurring lower recruiting costs to companies that are looking for candidates to fill in their openings. If these engines grow up to gain a large part of the recruiting market share, they can take away from the company's potential customers.
Internal Assessment
Management Assessment
The organizational structure proposed is sufficiently flat so as to promote a flexible approach to the decision making process during the first period of activity. The recruiting manager is the most important...
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