the luxury automobile industry in the U.S.

 

Introduce your industry in 2 or 3 short (five to seven sentence) paragraphs. The introduction frames your research and defines not only what you will be analyzing, but also what you will

Not be analyzing. This is especially important in an industry with multiple or disjointed segments.

A.

INDUSTRY ANALYSIS

1. The Industry’s Dominant Economic Features

This section must include:

·

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, etc. 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?

·

If so, what are they, and how do their presence effect firms, strategies, competition, and levels of

profitability within each

segment

2. Porter’s Five Forces

For each of the five forces:

·

What are the issues that represent high or low power?

·

Determine whether or not, collectively, the force affects the attractiveness of the industry.

·

After you have gone through all five forces, 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.

3. The Drivers

of Change in the Industry and Their Impact

The drivers of change section must include:

·

Long term growth rate

·

Who buys the product and how they use it

·

Significance of product innovation & technological change

·

Marketing innovation

·

Entry/exits of major firms

·

Diffusion of technological know-How

Impact of Globalization

Changes in costs and efficiencies

·

Emerging buyer preferences (shift towards differentiation or commodity)

·

Regulatory influences

·

Changes in societal concerns, attitudes, lifestyles

·

Reductions in uncertainty and risk in the industry over time.

4. Key Success Factors for Competitive Success

·

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?

5. Industry’s Attractiveness and Prospects for Long

Term Profitability

Analysis of the industry’s attractiveness must include:

·

Growth potential,

·

Will competitive forces strengthen,

·

Will driving forces increase/decrease profitability,

·

Which company’s 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,

·

Is this an attractive industry in which to participate?

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