For the past several weeks we have been examining firms’ environmental contexts. The purpose of this in-depth analysis is to: * understand how to document an industry’s systemic profitability (or loss) rate * understand the forces surrounding the industry (based on Porter analysis) that drive its underlying profitability (or lack thereof) * understand how macro-environmental factors influence the dynamics of the industry * understand how to draw appropriate conclusions from industry level data * understand how to support conclusions with application of Ch 2 theories and data understand how to summarize industry information in an informative way.
Your first case analysis is to analyze an industry to determine its future potential. The format for this assignment is consistent with what you might be expected to do on the job. Often, when you are given an assignment, you must present your findings in a concise memo, documented by exhibits which support your analysis. You then also present your work orally.
DESCRIPTION OF THE PROJECT
Assume you are an analyst (or team of analysts) for a consulting company. As analysts, your boss has asked your team to examine an industry for a client who is considering future investment possibilities. You don’t know what company or companies may be involved or if this is a potential new entrant. You are only asked to provide an evaluation of the industry, its structure, its profitability, attractiveness, opportunities and threats, and future prospects.
1) If you are doing this as an individual written assignment: MEMO submitted to Turnitin. * A business memo addressed to the professor/your boss (no more than 3 typed pages total –double spaced). This deliverable must be submitted to “Turnitin.” Although this is a memo, you should cite sources of factual data and information that is not common knowledge. * At least 2 and no more than 5 exhibits with data (graphs, charts, models, summary, etc) which supports the narrative presented in the memo. These should be attached after the memo. Each attachment should be referenced in the memo in order of appearance in the memo. * One required exhibit should provide some indication of industry performance (is this industry becoming more or less difficult). Think in terms of financial industry analysis and/or use the shipments data available on Blackboard. You MUST ANALYZE the information on Blackboard and extract information, NOT just paste it in your paper. * One required exhibit is a Porter analysis
ALL EXHIBITS MUST BE RELATED TO AND EXPAND UPON YOUR NARRATIVE. THESE TWO DELIVERABLES MUST FIT TOGETHER!
2) If you are doing the team presentation: Power Point WITH narration must be submitted to Blackboard and a HARD COPY of the slides given your professor in class. * Slides from your presentation. (No more than 15 slides total.). * Webex presentation should be 10 minutes long, not including time for Q&A.
* I expect a complete PEST
* I expect a complete PORTER
* I expect some conclusion about current and future industry analysis that is based on the PEST and PORTER
WHAT GOES INTO THE DELIVERABLES?
The list below should be the basis for your analysis. Remember, while you should look at all of these elements for a complete analysis, your judgment and application of concepts from Ch. 2 should inform your decisions regarding which pieces of the analysis are important for the memo and presentation. This means that not all of the below items will ultimately be included in the deliverables, even if you analyzed them initially. Only the most significant items will be included in the limited space of the deliverables.
1) Description of the elements of the industry.
* What is the description of the industry? (Not its history, just its definitional parameters) * At what stage of the industry life cycle is this industry?(Use data to define and defend this) * Profitability?(This should be presented as DATA, over time, relative to some other standard, for comparison)
2) Who are the primary competitors in this industry?
* Are there important strategic groups? * What segment or group dominates? What segment (if any) is doing well? What segment (if any) is weak?
DYNAMICS OF THE INDUSTRY:
1) What key trends in the general environment are important and affecting the future demand for the product or supply of necessary materials of this industry? Why?
2) Which forces (Porter) are most critical for this industry? I.e., which ones best explain the profitability rate that you described above?
* Barriers to entry? (which ones?)
* Powerful Suppliers? (which ones, why?)
* Powerful Buyers? (which ones, why?)
* Powerful Substitute INDUSTRY(s) (which ones, why?)
* Hi Rivalry of Competitors? (what is the source of rivalry?)
FORCES FOR CHANGE THAT ARE EMERGING:
1) How are the forces (Porter) in the industry changing over time to become a. Stronger? (What macro-trends are driving this?)
b. Weaker? (What macro-trends are driving this?)
2) Based on the Porter analysis (from #4& #5 above), is this industry getting c. more attractive (easier to make profits) or
d. less attractive (harder to make profits)? (why?)
INTEGRATION OF THE INFORMATION:
3) What are logically-derived conclusions (based on the analyses above) for e. opportunities (trends) associated with this industry? f. threats (trends) associated with this industry?
4) What are some key issues that players in this industry must be aware of?
FORMAT for the Assignment:
The MEMO format should include:
1) Business memo format: Please use the “Elegant Memo” template in Word, but double spaced. Also, insert page numbers. 2) Attachments should be labeled in numeric order (i.e. Exhibit 1), with a title underneath which indicates the nature of the information in the attachment. 3) Attachments should be numbered in the order in which they are introduced in the memo text.
The Power Point slides:
1) Slide 1 should include the name of the industry and the names of the team members. 2) All team members should be prepared to answer questions regarding the team analysis.