Industry Analysis (Case 1) Paper Instructions and Grade SheetMAN 4720 Strategic Management

Assignment Value - 50 points possible (all team members receive the same grade)

Due Date: See syllabus

Purpose: Each team will select an industry to study. You will conduct an industry analysis (also called a competitive analysis) of your assigned industry, and to collectively write a paper reporting your results. This paper will require that you apply the concepts that you have learned in the course.

This assignment will enable you to learn how to research and analyze the external and competitive nature of an industry. It is necessary to have a thorough understanding of an industry before a firm can develop strategic plans to obtain competitive advantages.

Basic Attributes of Your Report: The best reports are the result of a lot of research. There is a direct correlation between research and grades. To earn the highest grade possible, your report should demonstrate evidence of:

Significant secondary research. Integration of course concepts. Written in plain English and demonstrating understanding that clarifies and distills the problems and

opportunities competitors in the industry are facing. Precise business writing skills. (You will be penalized for writing mistakes.)

The best reports also summarize what you have learned from your research. A great report demonstrates that the student has thoroughly researched the industry, and demonstrates the ability to:

Comprehend –Paraphrase or interpret the information in one’s own words. Analyze – Break down the information gathered during your research into parts, and show

interrelationships. Synthesize – Bring together parts of knowledge from various sources to form the report. Evaluate – Make judgments based on the information researched.

Research Overview: Do not procrastinate! Start your research as soon as you have chosen your industry.

Begin by just learning as much about the industry as you can -- avoid trying to fill in the information required for the report as long as you can. This may be frustrating for you as there is a tendency to look for specific information for one section of your report during your research, but you will rarely find such information in a single source.

Information you are seeking includes industry trends, past growth rate and future growth projections, target market wants and needs. Also look for typical products/services offered by competitors, client/customer demographic descriptions, pricing, location, promotional methods, distribution methods, customer service reputation, quality track record, etc. Learn how industry competitors operate.

Suggested Approach to Research: Here is how you might start your research:1. Determine your NAICS code. This will increase the efficiency of your research. If you cannot identify the

NAICS code, then try using a SIC code instead.

2. Find magazine/journal articles or books about your type of business; print the articles to insure that you have the source of the information. List the articles and books you researched and describe the pertinent information you found that will be included in your report.

3. Use the Internet. There is a wide variety of Internet sources of information available to you as a UCF student. The UCF Library has licenses to many databases and online information sources; either access them from an on-campus computer lab or install the Pegasus CD on your home computer to access these sites for free.

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Length of the Paper: A quality paper will likely be about 15 pages long. Much less, and you may not have invested sufficient effort in your research and/or your analysis. Much more, and you have probably not done enough analysis, synthesis, or evaluation of your material required to produce a concise well-written report.

Document Your Sources: As you conduct your research, carefully document the sources of the information. We have a Zero Tolerance policy for plagiarism in this course. You MUST submit your paper to Turnitin.com, an online anti-plagiarism website. The instructions for submitting your paper to Turnitin.com can be found on my website.

Outline: Following is an outline of the types of issues you will want to address in your paper. Be sure to go beyond just describing the industry. Discuss the implications of your findings for firms competing in your industry. Note that not all issues contained within each section will apply to every industry. Choose the most pertinent issues and discuss them according to the applicability to your assigned industry. However, there are certain sections that are required for all papers and are marked as such, so please make sure to include them in your assignment.

Executive Summary and Introduction: (up to one page - 2 points)Research: Find the NAICS or SIC codes first, then determine generic descriptions of the industry and the general products that this industry produces. If you were studying steel production, you would look up what steel production/manufacturing encompasses.

1. Industry’s Dominant Economic Features (one to two pages - 3 Points)Research: While you are getting familiar with this industry through your research, make note of information related to any dominant economic features such as market size; scope of rivalry; growth rate and what stage of the life cycle is the industry in; number of rivals and their relative size; prevalence of forward/backwards integration; channels of distribution; 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, are important; to what extent do learning curves exist; are high rates of capacity utilization important for profitability; what are the historical levels of profitability; are there segments within the industry, and if so, what are they, and how do their presence effect firms, strategies, competition, and levels of profitability within each segment?

Report: Summarize what you have learned about the economic factors in the industry that have the most impact on it. In addition, if your industry is not a main industry, it might be a sub-industry within a main industry. For example, if you were studying steel production companies, the main industry is called metals and mining; within metals and mining there are two sub-industries dealing with steel, you would study steel production (also sometimes called steel manufacturing). Basically describe the purpose of your industry—what does it do, and what dominant economic features influence it the most. Choose carefully what information belongs in this section of your report, and what information should be included in one of the other five sections of the report.

2. Porter's Five Forces (about two pages each – 5 points each, total of 25 points) See text and lecture notes for a discussion of Porter’s Five Forces. If you want a head start, this is widely available online as well.

Threat of Substitute Products (Include as a sub-heading.)Research: If you were studying steel production, you would look up information in your industry to see if there are many substitutes for steel and steel production. If so, discuss what these are and how they act as substitutes. If not, state that this is not an issue. For example, is plastic (a different industry) a good substitute for steel? Don’t forget to state the overall level of strength of this force for your industry.

Intensity of Competitive Rivalry in the Industry (Include as a sub-heading.)Research: Look up information in your industry to see if there is a lot of rivalry between and among the companies currently in the industry and describe that here. Don’t forget to state the overall level of strength of this force for your industry. Be sure to discuss the relevant criteria for this force.

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Threat of New Entrants (Include as a sub-heading.)Research: If you were studying steel production, you would look up information in your industry to see if there is a high likelihood for new firms to enter the steel production industry. Describe reasons why there are – or are not – barriers to entry into this industry (e.g., is there a high capital requirement to enter this industry, is it difficult to obtain the resources to produce steel, etc.). Don’t forget to state the overall level of strength of this force for your industry. Be sure to discuss the relevant criteria for this force.

The Power of Buyers (Include as a sub-heading.)Research: If you were studying steel production, you would look up information in your industry to see those people purchasing the steel that is produced have a high level of power over the steel producers such that they can control the prices and terms of contracts. Don’t forget to state the overall level of strength of this force for your industry. Be sure to discuss the relevant criteria for this force.

The Power of Suppliers (Include as a sub-heading.)Research: If you were studying steel production, you would look up information in your industry to see if those supplying the steel manufacturers have a high level of power over the steel producers such that there are no other suppliers, they can charge high prices, they can control the terms of contracts, etc. Don’t forget to state the overall level of strength of this force for your industry. Be sure to discuss the relevant criteria for this force.

Report: For each force, go through the issues that represent high or low power for each force. Determine whether or not each individual force affects the attractiveness of the industry. Then, after you have gone through all five forces, summarize the collective attractiveness of the industry. Be sure to 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.

The best way to approach this section is to use each of the forces as a secondary heading and discuss how each of the force’s corresponding criteria (or those that are relevant) impacts the strength of that force for the industry. Be sure to provide relevant (and cited) examples of how the suppliers, buyers, new entrants, rivals, and substitutes are impacted by these different criteria. Then, after discussing each force’s relevant criteria, conclude a final level of strength of impact of that force relative to the industry (e.g., you might include a concluding sentence that says something like “Based on the analyses conducted above, the power of buyers is low”. Alternatively, begin the section with a sentence something like “The power of buyers in this industry is low. This was determined by examining each of the criteria relevant to the power of buyers, as discussed below.” Then you would discuss each criterion that leads you to that conclusion).

3. Drivers for Change in the Broad Environment (one or two pages – 5 points) Research: Search for information such as: Sociocultural, technological, political/legal, or economic trends; long term growth rate; who buys the product and how they use it; significance of product innovation and technological change; marketing innovation; entry/exits of major firms; diffusion of technological know-how; extent of globalization; changes in costs and efficiencies; emerging buyer preferences (shift towards differentiation or commodity); regulatory influences; changes in societal concerns, attitudes, or lifestyles; reductions in uncertainty and risk in the industry over time.

Report: You do NOT need to discuss all factors in the general environment, only those relevant to the industry under study. Thus, be sure to discuss ONLY the most relevant factors for your industry. The most common general environmental factors include political, economic, socio-cultural, technological, legal, and environmental forces. And of course, these may span international boundaries. Simply discuss how the relevant trends in the general environment impact your industry. A nice way to approach this section is to include cited examples of firms within the industry that have had to adjust their business practices (or who have responded to the trend) as a consequence of the trend. Be sure to also discuss the implications of the trends for the industry. As such, you will not just state what the trend is, but you need to directly tie the trend to the implications that it will have (or is having) on the industry. The text and lecture notes will help with all of these.

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4. Companies in the Strongest/Weakest Positions (two or three pages – 5 points) Research: Identify three individual companies in the industry that are either leaders or those that need to be put out of their misery. Identify how each firm has positioned, or tried to position, themselves, in their industry. For example, are there positions in the industry that are more attractive than others? What strategies does each of these rivals pursue? Identify characteristics that differentiate the companies from each other based on quality/price, geographic coverage, vertical integration, product line breadth, distribution, or service.

Report: Identify at least THREE different 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?

Critical note: You are required to answer this question, using course concepts: “What strategy does each of these rivals pursue?” The criteria that you can use to determine the strategic positions of the firms include Porter’s generic strategies (e.g., low cost, differentiation, etc.). Do some generic strategies seem to work better in the industry than others? Are some firms more successful at executing the generic strategies then others? If so, why (how do you know)? Other criteria that you can use to determine the strategic positions of the firms include how the firms position their products on a number of criteria like quality and price. Do some firms have high quality and highly priced products/services while others have adequate quality and low priced products/services? Are some firms competing on a large geographic scale than others (e.g., compete in more geographic markets—internationally or in more domestic markets than others)? Do some firms offer a broader product/service selection than others? Do some firms benefit from first-mover advantages? Do some firms possess resources and capabilities that allow them to gain a competitive advantage?

5. Key Success Factors For Competitive Success (KSFs) (one or two pages – 3 points)Research: This section probably does not require additional research. Instead you should reflect back on all that you have already learned about this industry. Analyze, synthesize, and evaluate what you have learned.

Report: Critical note: You are required to answer all of these questions.What are the 3-4 key industry 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?What are the implications of this evolution?

6. Analysis and Summary - Industry’s Attractiveness and Prospects for Long-Term Profitability (up to two pages - 7 points)

Research: No additional research should be needed to complete this section. Write it last so that you can summarize information from the previously-written sections. Thus, you should use all of your analyses to determine how attractive the industry is and what the prospects for long-term profitability are. For example, you should identify the level of attractiveness and prospects for long-term profitability based on what you’ve already learned. You might even find some forecasts in your research that might help to support your assertions regarding the industry’s prospects.

Report: Critical note: You are required to discuss all of these issues: Future growth potential Will competitive forces get stronger? 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? And to conclude: Is this an attractive industry in which to participate?

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Appendix Bibliography or Works Cited Any other related documents, in the order in which they are mentioned in your report.

Paper Format The paper must be double-spaced. Use 12-point Times New Roman font only. Provide 1-inch margins on all sides. Write in paragraphs using dialog. Avoid using bullets unless you include short lists of similar

issues. It will take about 15 pages of text to do a thorough job on this analysis. (20 page maximum.) You can provide appendices (charts, graphs, etc.), but these should not be considered part of the 20

page maximum of text. Put items in the Appendix in the same order they are discussed in the paper.

Use headings for each of the six main sections of the paper, and number each page. Use sub-heading when appropriate, such as for Porter’s Five Forces.

Do not include a table of contents. Papers must follow APA or MLA citation guidelines (including in-text citations). Staple your paper in the upper left-hand corner. Do not use a binder, notebook, folder, etc. You

will not receive extra points for “packaging” your report beyond the basics outlined here. You will likely need to use a heavy duty stapler for this. Multiple attempts with a typical stapler will be ineffective, create an unprofessional appearance, and result in pages getting lost. You may lose points for this, so plan ahead to staple your paper with a heavy duty stapler.

Include a cover sheet with your team name and all team members’ names clearly presented. (Alternatively, your instructor may request that you attach and use the Grade Sheet found at the end of this document instead of a cover sheet. If so, complete the information required on the grade sheet (name, team, etc.) for both the team level and the individual level portions.)

Cautions! Failure to properly cite your sources will be assumed to be plagiarism and will result in a 0 on the

assignment. Writing skills count. Review the Business Writer’s Companion or the Cornerstone Writing Handbook

to insure your writing skills meet requirements. Your writing skills must be precise and professional. Proof read your paper (and ask another person to proof read your paper) to insure there are no problems with your writing skills. You could lose 3 points for each error.

Once the content of your paper is assessed and graded, additional points will be deducted if you have failed to follow these instructions or if your writing skills are not exemplary.

Your paper will be graded from the perspective of an executive (your employer) reviewing a report, not just as an instructor reviewing a student’s paper. It must be professional in all respects.

A late paper will receive a ten percent penalty for each 24 hours it is late, including weekends and holidays. Compare your content and format with these instructions. You will lose points if you have not followed

directions. Don’t forget to submit this report to Turnitin.com. You will get a 0 if you forget.

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MAN 4720: Industry Analysis Grade Sheet – Team Level(Team Leader - Attach to the paper)

Name: __________________________ Industry ______________________________________

Section: ________ Team: ________________________________________

Team members: ______________________________________________________________________________

Section Possible Points

Your Points

Executive Summary and Introduction. Instructor Feedback: 2

1. The Industry's Dominant Economic Features. Instructor Feedback:3

2. Porter's Five Forces. Instructor Feedback: 25

3. The Drivers of Change in the Broad Environment & Impact They Will Have. Instructor Feedback: 5

4. Companies in the Strongest/Weakest Positions. Instructor Feedback:5

5. Key Success Factors for Competitive Success. Instructor Feedback:3

6. Analysis and Summary: Industry’s Attractiveness and Prospects for Long-Term Profitability. Instructor Feedback: 7

Points deducted for failure to follow instructions or for poor writing skills. Instructor Feedback:

Total Points 50

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