Case Study

Section 2. Industry Analysis (For Parts A-C: no more than 10 full content pages, excluding graphs/tables

Remember, this is an industry analysis not a company analysis. Therefore, limit

the amount of specific company (organizational) information.

A. Basis description of the industry. Will include, as a minimum:

1. The nature of the product or service

2. Information about customers and channels of distribution

3. Size of the industry (sales)

4. Geographic location of the industry

5. Profit trends

6. Competitive nature of the industry

B. Factors that influence demand. These factors may cause demand to increase or decrease. For each factor that you discuss, indicate whether it will cause demand to increase or decrease. You should demonstrate an understanding of why customers buy the product or service (e.g., customer service, quality, cost to name only a few). Also include:

1. The functions served by the product/Why customers buy the products or services

2. Stage of the product life cycle.
3. Economic trends.
4. Demographic trends

5. Social/cultural trends

6. Political trends

7. Technological trends

8. Programs developed by companies in the industry (new marketing programs, new distribution channels, etc.)

9. Pricing actions/trends (how do competitors us price as a competitive weapon, etc.)

C. Factors that influence cost structures and profitability

1. Stage of the product life cycle. (Stage of the product life cycle affects pattern of investment, cash flows, and profitability.)

2. Competitive environment. Thoroughly analyze and discuss Porter’s Five

Forces of Industry Competition. Explain effects on costs and

profitability.

3. Cost drivers. Describe the major cost drivers or identify what contributes to the price a company must charge for its product or service (e.g., labor, material, manufacturing). Give percentages or other data if available. Also, discuss the value chain as it relates to cost

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