Industry Analysis Paper

Below is an outline of the types of issues you will want to address in your Industry Analysis. Be sure to go beyond just describing the industry; that is, discuss the implications of your findings for firms competing in your industry.

Introduction: Introduce your industry in a few sentences. Detail the products and services offered by the typical firm in the industry, and perhaps those NOT offered. Describe where in the vertical chain firms operate (e.g., chip manufactures sell their products to manufacturers of consumer and industrial electronics companies, who then might in turn sell their products directly to customers or through retailers). Provide a list of the typical firms that compete in this sector.

1. The Industry's Dominant Economic Features – 20%

Features may include: market size (e.g., annual revenues), scope of rivalry (e.g., local/national), annual growth rate and what stage of the life cycle is the industry in, number of rivals and their relative size (e.g., size and market share of major competitors), number of buyers and their size (e.g. who buys from the industry, how many buyers are there), prevalence of forward/backwards integration, channels of distribution (e.g., where/how is the product sold?), pace of process and product technology change, whether products are highly differentiated or very similar, to what extent are economies of scale in purchasing, distribution, advertising, etc. important, to what extent do learning curves exist, are high rates of capacity utilization important for profitability, and what are the historical levels of profitability. How attractive financially, in terms of profit/operating margins has this industry been. Are they increasing/decreasing?

Further, are there segments within the industry? If so, what are they, and how do their presence effect firms, strategies, competition, and levels of profitability within each segment?

2. Porter's Five Forces – 25%

For Power of Buyers:

  • Who are the buyers?
  • What are the issues that represent high or low power?
  • What level of power do the buyers have in this industry?Which buyers are weak/strong? Why?
  • Determine whether the force affects the attractiveness of the industry.

For Power of Suppliers:

  • Who are the key suppliers?
  • What are the issues that represent high or low power?
  • What level of power do the suppliers have in the industry? Which suppliers are weak/strong? Why?
  • Determine whether the force affects the attractiveness of the industry.

For Barriers to Entry:

  • Is this an easy or difficult industry to enter? Why or why not?
  • Determine whether the force affects the attractiveness of the industry.

For Threat of Substitutes

  • What are the substitutes in this industry that fulfill a similar need?
  • What impact does the availability/unavailability of substitutes have on the attractiveness of the industry?

For Competitive Rivalry:

  • What factors drive/curb rivalry in this industry?
  • What impact does rivalry have on industry profitability?

After you have gone through all five forces:

  • Include a summary of your analysis and what it means for the industry.
  • If the industry is segmented, be sure to include a brief discussion of that fact and how the forces might differ across the different segments.

3. The Drivers of Change in the Industry and Impact They Will Have – 10%

Most common drivers include: Long term growth rate, Who buys the product and how they use it, Product innovation & technological change, Marketing innovation, Entry/exits of major firms, Diffusion of technological know-how, Globalization, Changes in costs and efficiencies, Emerging buyer preferences (shift towards differentiation or commodity), Regulatory influences, Changes in societal concerns, attitudes, lifestyles, and Reductions in uncertainty and risk in the industry over time.

You are to pick 2-5 of the most significant of these drivers, and discuss what is happening and how it is affecting the industry and competition. What trends are most important to consider?

4. Companies in the Strongest/Weakest Positions – 25%

Identify at least three different firms (or types of firms) in your industry and discuss how each has positioned, or tried to position, themselves, in their industry. Are there positions in the industry that are more attractive than others? What strategies do each of these rivals pursue?

Identify characteristics that differentiate - quality/price, geographic coverage, vertical integration, product line breadth, distribution, or service, to name a few. Strategic group mapping might be one tool used here. For each firm, conduct a brief review of their strategy and its relative strategic and financial performance. Compare and contrast the firms, their strategies and their relative performance.

5. Key Success Factors for Competitive Success – 15%

What are the 3-4 key issues/factors that have the strongest relationship with success and profitability? Do these KSFs vary by segment? How are these KSFs likely to vary over time and what are the implications of this evolution?

6. Industry’s Attractiveness and Prospects for Long-Term Profitability – 5%

Examples may include: growth potential, will competitive forces strengthen, will driving forces increase/decrease profitability, which company’s strategic position will improve/decline, how can firms insulate themselves from the unattractive forces in the industry, degree of uncertainty and severity of problems confronting industry, which types of firms/strategies seem to be most lucrative, is this an attractive industry in which to participate?

Paper Format

Double space, using a 12-point font

1inch margins all around

It should take 12 -15 pages of text to do a thorough job on this analysis

Use headings

Grammar and punctuation count.

Clear writing reflects clear thinking.

Staple in the upper left-hand corner of the paper. No binders, notebooks, etc.

Papers not handed in by the end of class will lose 20 points for every 24 hour period they are late

One cover sheet listing your name, section and team name.

Be sure you properly cite others’ work. I don’t care if you use APA or MLA, just make sure your reference section looks professional. Be sure to cite all original sources. Failure to cite other sources properly was result is serious academic violations, including a failing grade for the course and being referred to Academic Affairs for plagiarism.

You must reference your citations throughout the paper. For example, you could use the following format in your paper. “According to industry experts, the semi-conductor industry is likely to experience between 12 and 15 percent growth rates in terms of revenues over the next three years (Jones, 2008)” Thus, you paper should include have a bibliography and have citations imbedded in its text throughout.

Do not plagiarize. Do not take others work as your own. Use other sources, but avoid using it word for word. Summarize using your own words. If you do use a quote, do not include quotes over 3-4 lines long. Be sure to give credit to others for their work. If you used the internet to find your material, so can I.

Pay attention to how much each section is worth. Focus your effort on those sections which reflect higher point value.

Once the content of your paper is assessed and graded, additional points will be deducted if your paper does not observe the format guidelines discussed above.