Industry Analysis

INDUSTRY PAPER

I. Introduction

This part of the paper is the only concession I make to an English paper – which every student begins writing.

A. Description This is to be a general introduction to the particular nature of the industry. A brief history, key players, and general information are required to set the stage.

B. Segments Identify the segments of the industry, and specifically state the focus of the paper. Almost every industry has segments – some have too many, such as the computer industry. Students can not be expected to do all segments within one semester.

C. Caveats State limitations encountered in the study that prevent a complete analysis. No caveats are allowed without prior conversation with the instructor. Work-arounds are possible. Caveats that I agree exist are written because I can’t remember all the conversations.

II. Socio-Economic

B. Economic indicators relevant for this industry An example would be disposable income for firms in industries selling discretionary goods or services.

III. Porter’s Five Forces

A. Threat of New Entrants

1. Economies of scale

If economies of scale exist, it represents a high barrier to entry. Firms within the industry will have achieved these economies, and if we enter, we will have to match their scale size, but without the benefits of the associated learning curve. Since economies of scale do not exist in any tangible way, you must prove their existence or non-existence. Provide two measures related to the basic premise that increases in capital investment should lead to lower unit costs. Reach a conclusion: based on your analysis, do economies exist? What does this do to the threat of new entrants? Does this make the industry attractive or unattractive? Provide similar conclusions for each of the following sub-sections.

2. Working capital requirements

How much money will we have to tie up to keep the doors open? This is money that can not be invested in any other way. It will never...