Analyzing the External Environment
Assignment Overview:
Answer the following prompts in the template on the assigned industry (TBA in Class) using resources from class discussions, the text (Chapters 2 and 11, Appendices A and B of the text), and research conducted through the UNT library (http://guides.library.unt.edu/c.php?g=69756&p=452408). You may also use other internet sources, but they should be reputable business news or industry-specific outlets.
You should submit your assignment via CANVAS. You MUST cite sources of information in APA format (include a reference list at the end of your submission). Be sure to put information in your own words to avoid plagiarism. In other words, information taken from sources should never be verbatim unless it is in quotes and effective business writing keeps quotes to a minimum. Turnitin will help you avoid plagiarism issues. Give yourself enough time to submit and make changes prior to the deadline.
This is an individual assignment. You should develop the analyses and answers on your own without help from classmates, things posted online, people from previous semesters, etc. In other words, you should not copy work, in part or completely, from anyone else. Remember, there may be no one “right” answer, as this assignment (and class) is about critical thinking. What matters is that you present data-supported and logical answers based in your own research.
Grading Rubric for
Individual Assignment Template (100 points) Not Completed (0%) Severely
Deficient (50%) Somewhat Acceptable
(65%) Acceptable
(75%) Good
(85%) Excellent
(95%) Top of Class
(100%)
Section A – Define the Industry (10 points)
Section B – Porters Five Forces (25 points)
Section C – PESTEL Forces (25 points)
Section D – Identify Industry Segmentation (20 points)
Sections E – Drivers of Change (10 points)
Section F – Key Survival Factors (10 points)
Grading Rubric for
Individual Assignment Essay (50 points) Not Completed (0%) Severely
Deficient (50%) Somewhat Acceptable
(65%) Acceptable
(75%) Good
(85%) Excellent
(95%) Top of Class
(100%)
Introductory paragraph – clearly stated position with key supporting reasons (10 points)
Includes support from research template: Porter, PESTEL, DOC, KSF (10 Points)
Body – three strong supporting paragraphs from introductory lead-in (10 points)
Concluding paragraph- restate position and address both current and future perspective (10 Points)
Quality of the writing – no typos, grammar issues, etc. Appropriate use of citations and references (10 Points)
RESEARCH TEMPLATE FOR INDIVIDUAL ASSIGNMENT – EXTERNAL ANALYSIS
SECTION A – Describe the Industry (include citations) (10 points)
1 Name and Definition/NAICS & SIC Codes
Name and Define the Industry you are analyzing in your own words and include research source descriptions. Identify Govt NAICS and SIC codes
2 Industry size and growth trend
What is the annual revenue of the industry – What is the revenue growth trend of the industry (3-5 yrs.)? How does this compare with other industries and with GDP growth?
3 Industry profitability and trend
What is the average operating profit margin in the industry? Is it increasing or decreasing? How does this compare with other industries? Is it a profitable industry?
4 Future Outlook of the industry
What are the forecasts for future revenue and profit growth for the industry?
5 Industry Competition
Is the industry concentrated or fragmented? Who are the primary competitors in the industry? What percent of the market share do the largest companies control? Is the industry a clearly defined industry or does it overlap with other industries? Which ones?
6 Summary of Section A
Based on this financial assessment, is the industry attractive or unattractive and why? Remember the importance of industry profitability to industry attractiveness (per Porter)
SECTION B – Porter’s Five Forces Industry Analysis (include citations) (25 points) Make sure that you clearly identify the strength of each force and provide an explanation of the force relevant to the industry (1-5). You are asked (6) to summarize the top 2-3 forces and explain if they suggest the industry is attractive or unattractive. This helps connect to your essay conclusion which is why it is so important.
1 Supplier Power
Strength of force? How concentrated are the suppliers? How important are the suppliers’ product to the industry? How differentiated are the inputs? Are switching costs high or low? Are alternate supply sources available? Is the threat of supplier forward integration high?
2 Buyer Power
Strength of force? How much power do the customers have in the industry? How differentiated are the products in the industry? Are customer switching costs high or low? Is there a high degree of loyalty? How price and demand sensitive is the industry?
3 Threat of Substituted
Strength of force? What are substitute products in the industry? How attractive are the substitutes based on pricing? Features?
4 Threat of New Entrants
Strength of force? Are entry barriers to the industry high or low? Why? Explain why or why not.
5 Rivalry
Strength of force? How concentrated is the industry? Are exit barriers high or low? How fast is the industry growth? How differentiated are the industry products?
6 Summary of Five Forces Analysis
What were the strongest 2-3 forces? What does the strength of these forces suggest about the attractiveness of the industry?
SECTION C – PESTLE Analysis – Broad Environmental Forces Industry Influence (Include references) (25 points) Make sure that you clearly identify the strength of each force and provide an explanation of the force relevant to the industry (1-6). You are asked (7) to summarize the top 2-3 forces and explain if they suggest the industry is attractive or unattractive. This helps connect to your essay conclusion which is why it is so important.
1 Political
Strength of force? To what extent does the government influence the economy of the industry? Give examples.
2 Economic
Strength of force? To what extent does the economy impact the industry performance? Give examples.
3 Social
Strength of force? To what extent do social changes, cultural trends, and demographics influence the industry demand and future? Give examples.
4 Technological
Strength of force? To what extent to technology innovations affect the operations of the industry? Give examples.
5 Legal
Strength of force? To what extent do legal factors influence the industry? Give examples.
6 Environmental
Strength of force? To what extent do environmental factors influence the industry (i.e.; tourism, farming, climate, sustainability) Give examples.
7 Summary of PESTLE Analysis.
What are the strongest 2-3 broad environmental forces? What does this analysis tell you about the attractiveness of the industry?
SECTION D – Industry Segmentation (20 Points)
Following the guidance in the lecture 2 and construct a Strategic Group Map to better assess the competitive landscape for the industry.
Insert a Graphic of Your Industry Segmentation Map then answer the questions below
Place Graphic Here
1 Describe your X and Y axes –
What are the defining factors you considered in creating your industry segmentation map and why? On what dimensions do products/services in the industry vary?
2 Customers Included in your Map –
Who are the major players in the industry? Are there differences in how they compete? The more companies you include the better your map (select ~10)
3 Clusters/Strategic Groups
Draw a circle around the clusters of companies that are located near each other on your map. Describe each cluster in your map and provide an appropriate label “name” for each cluster.
4 Summary of Strategic Group Map
What can you learn from the map concerning group barriers, competitive dynamics in the industry, and new opportunities (white space on map). Refer to power point slide in lecture “How do companies use strategic group maps”
SECTION E – Top Three Industry Drivers of Change (10 Points) Define the term Driver of Change (1) then in 2-4 describe the top 3 Drivers of Change in the industry.
1 Define the term “Driver of Change” – Define the term in your own words or from another sources/lecture.
2 Driver of Change 1 – Describe the driver and explain your selection
3 Driver of Change 2 – Describe the driver and explain your selection
4 Driver of Change 3 – Describe the driver and explain your selection
SECTION F – Industry Key Survival Factors (10 Points) Define the term Key Survival Factor (1) then in 2-4 describe the top 3 Drivers of Change in the industry.
1 Define the term “Industry Survival Factor” Define the term Key industry survival factor.
2 Survival Factor 1 – Describe the survival factor and explain your selection
3 Survival Factor 2 – Describe the survival factor and explain your selection
4 Survival Factor 3 – Describe the survival factor and explain your selection
Your research template should be in a separate word document and submitted through the Template submission on CANVAS. Include separate reference list and citations for the template.
REFERENCE LIST (APA FORMAT)
ESSAY FOR INDIVIDUAL ASSIGNMENT – EXTERNAL ANALYSIS
SUMMARY OF FINDINGS – Clearly answer the question, is the industry attractive? (50 Points)
Using insights from each section of your above analysis, determine the overall attractiveness of the industry now and in the future. Be specific and clear – is the industry attractive or not and why. Summarize your findings into a professionally written summary appropriate for your boss or a client (no more or less than one page single spaced, 12-point font, 1” margins). Please note that summary is not a description of the process you followed, but rather a high-level review of key findings. Use citations as appropriate (anything that is not your own original thought should be cited.
A strong argumentative essay starts with a strong introductory paragraph that clearly states your position and 3-4 key supporting reasons. Then a tight paragraph follows for each of the 3-4 explaining that reason with the research presented for example – financials are unattractive (revenue profit xx compared to xxx) – a paragraph on financials. Another could be on the strongest Porters forces and their indication of industry attractiveness then the same for the environmental factors. Then you would end with a strong conclusion summing it all up. Remember that we are not solving problems or making recommendations!
Your essay should be in a separate word document and submitted through the ESSAY submission on CANVAS. Include separate reference list and citations for the essay.
REFERENCE LIST (APA FORMAT)
