External Analysis: PESTEL Analysis: Political – The recent regulations changes to the Canada Wheat Board regulations, which can affect the industry. For example, the farmers can send the product to the market directly without the wholesaler. Economic – Cervus Equipment Corporation is in a good economic situation although the global economic is moderating. Moreover, according to MarketLine Analyst, the global agricultural machinery market is forecasted for growing, and the farming industry is achieved unprecedented growth in western Canada. Additionally, lower interest rate helps farmers to lease and rent new equipment cheaply. Additionally, Cervus Equipment tries to achieve economic of scale, and gets the better results. Sociocultural – The world population is predicted to increase 23 percent by 2025, and global food production is expected to rise 50 percent. The manager wants to satisfy the customers’ needs, and Cervus Equipment creates the Cervus Leadership University (CLU) to find out the employees, who can satisfy and understand the customers. Moreover, when Cervus Equipment expands the market to New Zealand, the company needs to understand more differences in international markets and cultures. Technological – Because of the increasing of the population, food production, and unchanged total arable farmland, the new equipment technology is formed, as “Site Specific or Precision Farming.” This strategy includes many good systems to manage the farm resources better. Environmental – Cervus Equipment uses the diversification growth strategy in the industrial equipment markets. However, the company also needs to find a way to solve the used equipment inventories problem, which is an important financial risk. Legal – When Cervus Equipment wants to expand the business to other countries, it needs to consider other countries’ political and legal environments are mature or not. Moreover, the company also needs to follow other countries regulations and legislations when it does business there. Additionally, company should care about the equipment’s quality regulations. From the PESTEL analysis, Cervus Equipment is in a profitable economic situation, and expects a good growth rate in the future. Moreover, Cervus Equipment uses the good strategy and new technology to achieve the future growth goal under the political and legal environment. However, when Cervus Equipment expands the business to the New Zealand, it faces the challenge because the significant difference in the agricultural markets and cultures. Porter’s Five Forces Analysis: Degree of Rivalry – Low: One formidable competitor is Rocky Mountain Equipment, which is represented reputable international brand. However, it has much lower margins and bigger consolidation challenges than Cervus Equipment, and results in a lower market valuation. The other competitor is Titan, which focus on American and European market, and no intensions of entering to Canada. Barriers to Entry– High: The equipment market needs new technology and business strategy, which are not easy to understand and explore. Moreover, having the relationship with employees and customers, and the dealerships with partners are hard to achieve. Threat of Substitutes –Low: Other competitors cannot shake Cervus Equipment’s position in the industry. Customers trust Cervus Equipment and it earns lots of loyalty. Moreover, Cervus Equipment has a big market share in the Canadian industry. Supplier Power – Medium: Cervus Equipment needs to explore new technology and train the new employees to satisfy farmers’ needs. Moreover, the company applies the most equipment for the Western Canada. Buyer Power – High: Many farms purchase the new equipment every one or two years. Moreover, Cervus Equipment always updates the technology to the new machines, and attracts the farms to buy the new ones. The above analysis indicates that Cervus Equipment is in a good situation. Cervus Equipment has an advantage on competition compares to competitors. Additionally, the new entrants are not easy to enter the equipment market, and Cervus Equipment cannot replace by others. Moreover, the company’s sales are increasing every year, and it serves most areas in Western Canada.