Subject: Business Policy and Strategy
APA Format
For your course project you will select a company for analysis. Choose a company for analysis and begin collecting data as soon as possible. A good analysis takes time so begin early. DO NO PROCRASTINATE. Company Web pages often provide a wealth of information. DO NOT, however, rely solely on the company’s web page for data.
For part one of the project you will identify the company’s external and internal environment.
THE EXTERNAL ENVIRONMENT: Describe the external environment the company is facing :
I. Identify and analyze the industry’s dominant economic characteristics
ii. Identify and analyze the current driving forces in the industry
iii. Identify and analyze the five forces of industry competition
iv. Prepare a strategic group map of the industry. Discuss the implications
v. Identify and analyze future key success factors
vi. Discuss the implications.
THE INTERNAL ENVIRONMENT: Describe the internal environment the company is facing
I. Review the leadership of the company. Are any patterns or
inconsistencies present?
ii. Perform a financial analysis. Analyze the findings
iii. Identify and analyze the structure and culture of the company
iv. Identify and analyze the other relevant skills and competencies (e.g.
marketing, human resources etc,) of the company
Summarize this section by discussing the strengths and weaknesses facing the company. Discuss the implications.
You can use this for helpful tips
I. Industry’s Dominant Economic Characteristics
Market Size: Annual sales revenue and total volume.
Scope of Competitive Rivalry: Local, regional, international, global
Market Growth Rate: 2-3 percent annually
Stage in Life Cycle: Early development? Rapid growth? Mature.
Number of Companies in Industry: Lots of small companies or few dominant ones.
EX: 110 plant locations and capacity of 4.5 million tons. Market shares range from a low of 3 percent to a high of 21 percent.
Customers: How many buyers are there? Do they need large/small orders?
Degree of Vertical Integration: How prevalent is backward (suppliers) and forward integration (distributors, retailers).
Ease of Entry/Exit: Barriers to enter/leave the industry. EX: Moderate entry barriers exist in the form of capital requirements to construct a new plant of minimum efficient size (cost equals $10 million) and ability to build a customer base inside a 250-mile radius of plant
Technology/Innovation: What is the pace of technological change in both productions, process innovation and new products introductions?
Product Characteristics: Goods/services highly differentiated, weakly differentiated or essentially identical? Buyers perceive little real difference from seller to seller?
Scale Economies: What impact does large volume have on – purchasing, mfg, transportation, and marketing?
Experience Curve What is the impact of learning and experience in this industry?
Capacity Utilization: Do you only achieve low cost production efficiency with high levels of capacity? EX: Manufacturing efficiency is highest between 90-100 percent of rated capacity; below 90 percent utilization unit costs run significantly higher
Industry Profitability: Is it above or below the norm? Do profits track the strength of demand for the industry’s products? Impact on prices?
