solution

Pacifica County is a developing economy in the Pacific, and its Economic Development Division
is pessimistic about the future GDP growth projections. The economy is actually suffering from
diseconomies of scale because the national average costs is rising when national output increases.
In an effort to control total costs (TC) and ensure that national average costs of production falls as
output expands, hence restoring economies of scale; Pacifica County has engaged your
consultancy firm to evaluate the current industry attractiveness. As a consultant, you have decided
to evaluate industry effectiveness by pursuing diversification. A principal consideration in
evaluating the caliber of a diversified organization’s strategy is the attractiveness of the industries
in which it has business operations.
As per the above, a simple and reliable analytical tool for gauging industry attractiveness involves
calculating industry-attractiveness scores.
Questions:
1. Calculate the missing individual industry weighted score for the three (3) industries in
Pacifica County and fill in the blanks.
(2 marks)
2. Calculate the missing overall industry-attractiveness scores for the three (3) industries in
Pacifica County and fill in the blanks.
(2 marks)
3. Which of the industry has a higher degree of attractiveness and which of them has a lower
degree of attractiveness?
(2 marks)
4. In reference to your completed calculations in Table 1.1, which industry attractiveness
measure needs urgent policy reform so as to improve its weighted overall industry
attractiveness scores above the desired 5.0 level? Please justify your answer by citing the industry-attractiveness measure and its associated ‘importance weight score’.
(4 marks)