Analysis Industry (Case 1) Paper Instructions
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 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 quality of research and grades. To do extremely well, 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.
The best reports also summarize what you have learned from your research. A great report demonstrates a
thorough understanding of the industry and the ability to:
Comprehend Paraphrase or interpret the information in ones 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 but avoid trying to fill in the information required
for the report as long as you can. This may be frustrating, 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 use your student ID from your home computer to access these sites for free.
Outline: What follows 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.
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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)
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. Industrys Dominant Economic Features (one to two pages)
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 industrywhat 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)
See text and lecture notes for a discussion of Porters 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? Dont 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. Dont forget to state the overall level of strength of this force for
your industry. Be sure to discuss the relevant criteria for this force.
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.). Dont 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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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. Dont 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, Dont etc. 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 forces 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 forces 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)
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.
4. Companies in the Strongest/Weakest Positions (two or three pages)
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
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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 Porters
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)
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?
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Analysis and Summary - Industrys Attractiveness and Prospects for Long-Term Profitability (up to two pages)
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 youve already
learned. You might even find some forecasts in your research that might help to support your assertions regarding
the industrys prospects.
Report: Critical note: You should discuss all of these issues:
Future growth potential
Will competitive forces get stronger?
Will driving forces increase/decrease profitability?
Which companys 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:
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Is this an attractive industry in which to participate?
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Appendix, if needed:
Bibliography or Works Cited
Any other related documents, in the order in which they are mentioned in your report.
Paper Format Guidelines (Im not that picky about formatting, so long as it looks neat and professional, and
is easy to follow. But if youre looking for something more specific, here are some guides.)
Use double spacing.
Use 12-point Times New Roman font.
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 subheading when appropriate, such as for Porters Five Forces.
Do not include a table of contents.
Cite your sources!!!
Simply staple your paper in the upper left-hand corner. D o not use a binder, notebook, folder, etc.
Include a cover sheet with your team name and all team members names clearly presented.
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