| 2. External factors impacting upon the growth forecast
2.1 Existing rivalry among firms
SRA holds a 20% share of the share registrars market. The company has grown both organically and through acquisition. Acquisition tactics have included poaching several large accounts from rival firms. SRA expects continued strong growth and this is reflected in their YoY predicted growth in shareholder accounts. Currently, the share registrars market is dominated by two firms: Computershare and ASX/Perpetual Registry. These firms and other smaller companies involved in this market all have growth strategies and will be strong competition for SRA and other new and existing businesses. This will have major implications to SRA’s growth forecasts
2.2 Industry life cycle
SRA believe investment in the sharemarket is in the growth stage and expects the number of shareholders managed to grow significantly. External market ratings support this belief as studies suggest retail investors continue to invest their savings in the share market (Hale & Allen, 2001; Ferdie, 2000). SRA have based their on growth forecasts on these predictions and expectations. This factor will also have a major impact upon SRA’s growth forecasts…...
The company has growth expectations, especially in the small company market; however, the bargaining power of buyers will pose a significant threat to revenues and this could have implications for both growth and fee forecasts. The fee forecasts already suggest that SRA do and will have to discount (to inflation) their fee structure for large companies, as they target them for economies of scale…...
2.4 Technological change
SRA is already becoming increasingly reliant on technology. Although the advantages gained through the use of the new technology is expected to be positive for growth, the capital expenditure required to secure such technology can have a negative impact; for example, the company plans to develop a new share registry maintenance system and the capital expenditure for this technology will bring negative cash flow in 2002 …..
|The main heading is informative and specific. It contains two factors: the external factors and impact of these factors on the growth forecast.
The subheadings logically follow from the first of these factors as they are a list external factors that impact on the growth forecast.
The content under each of the subheadings relates to the second factor since it is a systematic examination of the impact of each external factor on the growth forecast.