Section 2: EFE Matrix Key External Factors.

 Review Step 1 on p. 77 of the EFE Matrix.

 In Section 2 of this paper you will list and describe the 20 key
external factors, opportunities and threats, which affect the
company and its industry.
 You must cite at least 2 sources for facts in your EFE factors so
this is your own analysis and not the facts and ideas from just one
source, like the annual report.
 Please note, that is just good writing.
 These 2 factual sources for company information are also different
from, and in addition to, the requirement for 2 peer reviewed
sources.

Strength of Vivint Solar

 Distribution and Reach: Vivint Solar Inc has a large number of outlets in almost
every state, supported by a strong distribution network that makes sure that its
products are available easily to a large number of customers in a timely manner.
 Cost Structure: Vivint Solar Inc’s low-cost structure helps it produce at a low cost
and sell its products at a low price, making it affordable for its customers.
 Dealer Community: Vivint Solar Inc has a strong relationship with its dealers that not
only provide them with supplies but also focus on promoting the company's products
and training.
 Financial Position: Vivint Solar Inc has a strong financial position with consecutive
profits in the past 5 years, along with accumulated profit reserves that can be used
to finance future capital expenditures.
 Vivint Solar Inc has a large asset base, which provides it with better solvency.
 Return on Capital Expenditure: Vivint Solar Inc has been successfully able to
generate positive returns on the capital expenditure it has incurred on various
projects in the past.
 Skilled Labor force: Vivint Solar Inc has invested extensively in the training of its
employees that has resulted in it employing a large number of skilled and motivated
employees.
 Vivint Solar Inc has a diversified workforce, with people of many geographical, racial,
cultural and educational backgrounds that help the company by bringing in diverse
ideas and methodologies of doing things.
 Vivint Solar Inc has qualified and accredited professionals working under in its team.
 Entering new markets: Vivint Solar Inc’s innovative teams have allowed it to come up
with new products and enter new markets.
  Social Media: Vivint Solar Inc has a strong presence on social media with more than
millions of followers on the three most famous social media platforms: Facebook,
Twitter and Instagram.
 Website: Vivint Solar Inc has a well-functioning and interactive website that draws a
large number of internet traffic and sales.
 Product Portfolio: Vivint Solar Inc has a large product portfolio where it provides
products in a large range of categories.
 The geography and location of Vivint Solar Inc provide it with a cost advantage in
serving its customers, when compared to that with the competition.
 Vivint Solar Inc has a well-established IT system that ensures efficiency in its internal
and external operations.
 Vivint Solar Inc owns a number of intellectual property rights that include trademarks
and patents.
 Vivint Solar Inc is a brand that has been in the market for years, and people are
aware of it. This makes its brand awareness high.
 Partnerships: Strategic partnerships are established by Vivint Solar Inc with its
suppliers, dealers, retailers and other stakeholders.

WEAKNESSES of VIVINT SOLAR INC

Research and Development: Even though Vivint Solar Inc is spending more than the average research
and development expenditure within the industry, it is spending way less than a few players that has a
significant advantage as a result of their innovative product.
High Day Sales Inventory: The time it takes for products to be purchased and sold are higher than the
industry average, meaning that Vivint Solar Inc builds up on inventory
Rented Property: A significant proportion of the property that Vivint Solar Inc owns is rented rather
than purchased.

Cash flow problems: There is a lack of proper financial planning at Vivint Solar Inc regarding cash flows,
leading to certain circumstances where there isn’t enough cash flow as required
Integration: Vivint Solar Inc's current structure and culture have resulted in the failure of various
mergers aimed at vertical integration.
Diversification in the workforce: The workforce at Vivint Solar Inc is concentrated with mostly local
workers, and low amounts of workers from other racial backgrounds.

Market Research: Vivint Solar Inc has not conducted market research within the market that is serves
since the past 2 years.

High employee turnover rates: Vivint Solar Inc has a higher employee turnover rate compared to
competitors.

Quality Control: Vivint Solar Inc has a lower budget for its quality control department than competitors.

This reliance on a few products makes Vivint Solar Inc vulnerable to external threats if these few
products suffer for any reason.
Opportuniities(30%)

 Internet: there has been an increase in the number of internet users all over the
world. This means that there is an opportunity for Vivint Solar Inc to expand their
presence online; by using the internet to interact with its customers.
 E-commerce: There has been a new trend and a growth in sales of the e-commerce
industry. This means that a lot of people are now making purchases online. Vivint
Solar Inc can earn revenue by opening online stores and making sales through
these.
 Social Media: there has been an increase in the number of social media users
worldwide. The three social media platforms; Facebook, Twitter and Instagram, have
shown the greatest number of increase in monthly active users. Vivint Solar Inc can
use social media to promote its products, interact with customers and collect
feedback from them.
 Technological developments: technology comes with numerous benefits among
many departments. Operations can be automated to reduce costs. Technology
enables better data to be collected on customers and improves on marketing efforts.
 There has been an increase in average household income along with an increase in
consumer spending following the recession. This will result in growth in Vivint Solar
Inc’s target market with new customers that can be attracted towards the business.
 Inflation: The inflation rate has been low and is expected to remain low in the next
two years. This is an opportunity for Vivint Solar Inc as its cost of inputs would
remain low for the next two years.
 Interest rate: Lower interest rates than compared to previous years provides an
opportunity for Vivint Solar Inc to undergo expansion projects that are financed with
loans at a cheaper interest rate.
 Green government drive: this provides an opportunity for Vivint Solar Inc for the sale
of Vivint Solar Inc's products to federal and state government contractors.
 Transport Industry: the transport industry has been flourishing in the past few years,
and shows growth potential in the future. This has reduced the costs of
transportation, which is beneficial for Vivint Solar Inc as it will lower its overall costs.
 Tax policy: the governments’ reduction in tax rate is beneficial for Vivint Solar Inc as
a lower amount would be expensed out as a tax.
 The government has also announced a subsidy on the sale of environmentally
friendly goods in this sector. Vivint Solar Inc can focus on these environmentally
friendly products and make use of this opportunity.
 Tourism: growth in tourism is beneficial for Vivint Solar Inc as it will provide new
potential customers that it can target in order to gain market share.
 Skilled workers: increase in education and training by numerous institutes has
increased the amount of skilled labor available within the country. This means that if
Vivint Solar Inc is able to hire skilled labor, it would have to spend less on training
and development, therefore, saving costs.
 The growth in consumer spending in the economy is likely to increase consumption
for Vivint Solar Inc's products. Vivint Solar Inc can sell products in these markets and
take advantage.
  Globalisation: Increased globalisation does not restrict Vivint Solar Inc to its own
country. It can extend its operations to other countries, entering into these markets
and making use of the opportunities that lie in these markets.
 Consumers within the industry are becoming more conscious of health, and this is a
segment that is growing. Vivint Solar Inc can take advantage by manufacturing
products that are beneficial to customer's health.

Threats(55 unique)

 Technological developments by competitors; New technological developments by a

few competitors within the industry pose a threat to Vivint Solar Inc as customer
attracted to this new technology can be lost to competitors, decreasing Vivint Solar
Inc’s overall market share.
 Suppliers: The bargaining power of suppliers has increased over the years with the
decrease in the number of suppliers. This means that the costs of inputs could
increase for Vivint Solar Inc.
 New entrants: there have been numerous players that have entered the market and
are gaining market share by gaining existing companies’ market share. This is a
threat to Vivint Solar Inc as it can lose its customers to these new entrants.
 Increasing competition: there has been an increase in competition within the industry
putting downward pressure on prices. This could lead to reduced revenue for Vivint
Solar Inc if it adjusts to the price changes, or loss of market share if it doesn’t.
 Exchange Rate: the exchange rate keeps fluctuating and this affects a company like
Vivint Solar Inc that has sales internationally, while its suppliers are local.
 Political uncertainties in the country prove to be a barrier in business, hindering
performance at times and making the business incur unnecessary costs.
 The fluctuating interest rates in the country do not provide a stable financial and
economic environment.
 Consumer tastes are changing, and this puts pressure on companies to constantly
change their products to meet the needs of these customers.
 Regulations on international trade keep changing, and this requires compliance by
companies if they are to operate globally.
 Substitute products available are also increasing, which is threat collectively for the
whole industry as consumption of current products decrease.
 The rise in prices of fuel has increased in the input costs for Vivint Solar Inc. These
costs have also increased as other industries that provide inputs for this company
also have suffered from increasing fuel prices, thereby charging more.
 Increased promotions by competitors have been a threat for Vivint Solar Inc. On
most media, there is more clutter than ever, and customers are bombarded with
multiple messages. This reduces the effectiveness of promotional messages by
Vivint Solar Inc.
 Constant technological developments require the workforce to be trained accordingly
as the inability to keep up with these changes can lead to loss of business for Vivint
Solar Inc.