MPE@NMIMS

Course: Industry Analysis

Batch - 16 Trimester 03-05

a
OVERVIEW OF COURSE
All organizations operate in a macro environment consisting broadly of
the economy at large, population demographics, societal values and
lifestyles, governmental legislations and regulation, technological factors,
and the companys immediate industry and competitive environment. The
macro environment includes all the relevant factors outside a companys
boundaries relevant in the sense that they are important enough to have a
bearing on the business decisions of the company. Company managements
are nonetheless obliged to monitor the macro environment, though it is
beyond the companys sphere of influence.
This necessitates managers to make a detailed diagnosis of a
companys immediate industry and competitive environment. Without
perceptive understanding of the strategic aspects of a companys external
and internal environments, the chances are greatly increased, that the
managers will concoct a strategic game plan that doesnt fit the situation
well, that holds little prospect for building competitive advantage , and that
is unlikely to boost companys performance.
Managers are not prepared to decide on a long term direction or a
strategy until they have a keen understanding of the industry. The working
definition of the word industry is a group of firms whose products have so
many of the same attributes that they compete for the same buyers.
Industries differ widely in their economic characteristics, competitive
situations, and future profit prospects.
Industry analysis is a systematic approach to understand the economic
and competitive features of an industry. Industry analysis entails a of tool kit
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MPE@NMIMS

Course: Industry Analysis

Batch - 16 Trimester 03-05

a
which provides a way of thinking strategically about any industrys overall
situation and drawing conclusions about whether the industry represents an
attractive investment for companys funds.
Scope of the Course
The course titled Industry Analysis is designed as a part of the
Programme curriculum, with an aim to provide hands on experience to the
budding managers. This course begins with first trimester of the programme
and ends with third trimester. It provides ample scope for the students to do
industry analysis in three stages.

Stage One:
o Detailed Economic Profiling of the chosen industry: Capacity,
production, turnover,
o Identify the participants/stake holders and product segments in
the industry
o Describe the nature of competition and extent of global
integration
o Identify the drivers of competitive advantage
o Analyse the trends
o Understand the processes and technology
o Viable economic size of an undertaking
o PESTEL Analysis
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MPE@NMIMS

Course: Industry Analysis

Batch - 16 Trimester 03-05

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o Report due by 7th May, 2016

Stage Two:
o Industry : Competitive Analysis ; Market Analysis;

Financial Analysis of Industry Aggregates

Profitability Ratios, Leverage Ratios, Turnover Ratios,

Valuation Ratios, Liquidity Ratios, Cost Structure
(Percentage and per unit basis)

Firm: Financial Statement Analysis (About 3 firms)

o Functional Analysis: Marketing, HR, Technology, Operations and

Supply Chain

Marketing Spend, Training expenditure, Employee cost,

R&D expenditure, etc.

o Identify Key Performance Indicators (KPIs) in each functional area

and analyze the industry participants based on them.
o Operating Measures: Capacity, Capacity Utilization, Sales
Realizations
o Preliminary Analysis using Porters Five Forces framework, SWOT,
Profit Pool Analysis, Value Chain Analysis.
Sources:

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MPE@NMIMS

Course: Industry Analysis

Batch - 16 Trimester 03-05

a
-

Annual Reports of companies: Directors Report, Management

Discussion & Analysis, Notes to the Accounts, Auditors Reports in
addition to the financial statements

Red Herring Prospectus of any company in the Industry

Databases: Capitaline, Prowess for company data and industry

aggregates, Crisil for industry data

Government of India and Industry Association web sites

All the financial data should be sourced from databases or from official
company annual reports, government sources and industry
associations

Stage Three: Assessment of Industry Attractiveness and Profitability

o Final Analysis using Porters Five Forces framework, SWOT, Profit
Pool Analysis, Value Chain Analysis.
o The final report should integrate all three stages of analysis. The
report should be an integrated assessment of the attractiveness
of the industry
o Bring out the unique features of the industry
Over a period of three trimesters students will build their conceptual

understanding of different functional areas of management. They can

systematically link the concepts and the tools and techniques learnt in
different courses while performing industry analysis in real life scenario.
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MPE@NMIMS

Course: Industry Analysis

Batch - 16 Trimester 03-05

a
Course Objectives:

To provide hands-on experience to do real life industry analysis

To provide a platform to relate the functional concepts of management

with real life industry scenario

Learning Outcomes
Through this course the students will

Learn to profile an industry and its structure

Analyze the competitive forces

Identify and Evaluate the key factors for its competitive success

Assess the industry attractiveness and its profitability

Pedagogy
This course is designed to develop the ability of the participants to
dissect, analyse and interpret an industry based on the conceptual learning
imparted during the program. The class room sessions are kept at a
minimum to promote self- learning. Structure, broad guidelines, an
occasional facilitation and periodical review and feedback will be provided to
the students. Students are required to follow the guidelines provided and
conduct the industry analysis on their own.
The entire study of this course will be carried out as a group study.
Each group will be assigned a specific industry. The complete list of selected
industries is provided in Annexure 1. A group will consist of 4-5 students.
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MPE@NMIMS

Course: Industry Analysis

Batch - 16 Trimester 03-05

a

Assessment and Grading

At the end of the course students are required to come out with the
Industry analysis report on their assigned industry. The same will be
assessed both by the industry invitees as well the management Faculty. The
grading break up will be as below:
Criteria

Trimester

Trimester

Trimester

III

IV

Total

Marks
Report

10

20

20

50

25

25

( Group
wise marks
will be
allotted)
Presentati

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MPE@NMIMS

Course: Industry Analysis

Batch - 16 Trimester 03-05

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on
( Students
will be
evaluated
individuall
y)
Viva-voce

25

25

70

100

( Students
will be
evaluated
individuall
y)
Total

10

20

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MPE@NMIMS

Course: Industry Analysis

Batch - 16 Trimester 03-05

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Industry analysis tool kit:
Industry analysis uses a tool kit of concepts and techniques to get a clear fix
on industry traits, the intensity of competition, the drivers of industry
change, the market positions and strategies of rival companies, the keys to
competitive success, and the industrys profit outlook. The following is the
indicative framework of matrixes, students use while doing their industry
analysis.
Industry and Competition
Market Size and Characteristics

Describe each separate geographic market for each of the companys

(INDUSTRY) services/product groups.

Set forth any market surveys from independent institutes.

Market Trends

Describe historical, current and future patterns or trends relating to

each market (together with reasons why) including:

Changes in pricing
Changes in customer base
Changes in the types of users
Forward or backward integration trends

Market Structure

Describe the different categories of participants in each market with

detailed descriptions of the major participants.

Distinguish between competition from outside the industry and from

within the industry e.g Larger and financially stronger companies
acquiring lines of business in the specific companys industry.
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MPE@NMIMS

Course: Industry Analysis

Batch - 16 Trimester 03-05

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Describe the stability of the companies engaged in the industry.

Describe the current market share of each major participant.

Describe any historical/projected changes in the relative market share

of major participants and discuss reasons for these changes.

Characteristics of competitors

Describe the factors affecting the relative success of each major

competitor.

The existence of any economies of scale enjoyed by any company.

The existence of product differentiation enjoyed by the competitor

Existence of backward or forward integration enjoyed by the

competitor.

Superior management, Superior facilities, Superior technological knowhow, favorable access to attractive workforce.

Favorable relationship with suppliers

Favorable relationship with customer or customer groups.

Ways of competition/Behavioral traits of each major competitor

Price competition

Service competition

Trends towards (or away from) concentration or domination

Niche players? Mavericks?

Responsible/Irresponsible competitors (ethical/legal behavior etc)

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MPE@NMIMS

Course: Industry Analysis

Batch - 16 Trimester 03-05

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Some Metrics that would be useful to analyze the attractiveness of

the Industry
1.

Market Product/Services, Size, Outlook, Geographical Scope, Business Model

2.

Market Share Pattern, Brand Categories of major companies

3.

Economies of Scale

4.

Role of Technology

5.

Porters 5 Force Analysis

6.

Profit pool Analysis

7.

KPIs in the particular industry

Operational, Financial, HR, IT

8.

Problems and Opportunities in the industry

9.

Fixed Asset Analysis

10.

Operating Cost Structure Fixed/Variable

11.

Gross and Operating Margin

12.

Financial Cost Structure

13.

Financial Risk

14.

Tax Rates

15.

Liquidity Working Capital Requirements

16.

Training/Development hours and Cost

17.

Revenue per employee

18.

Compensation- Average Salary Levels, Benefits as a percentage of total

compensation, Fungibility of fixed/variable salaries.

19.

Regulation Environmental, Investment, Export/Import, Pricing, Tax Incentives,

Repatriation of Profits etc

20.

Social Responsibility Initiatives

MPE@NMIMS

Course: Industry Analysis

Batch - 16 Trimester 03-05

a
Annexure - 1
PESTEL Analysis
Political
-

Government Type and Stability

Freedom of Press, Rule of Law, Levels of Bureaucracy and Corruption
Regulation and De-regulation trends
Social and Employment legislation
Tax policy, Trade and tariff controls
Environmental and consumer protection legislation
Likely changes in the political environment

Economic
-

Stage of Business Cycle and likely changes in the economic environment

Current and Projected economic indicators: GDP growth, IIP growth, inflation and interest rates.
Labour availability and costs
Income distribution
Impact of technological changes on the economy

Social
-

Demographics
Health, education, mobility
Job markets and attitudes
Social attitudes, public opinion, etc
Lifestyle choices
Socio-cultural changes.

Technological
-

Impact of emerging technologies

Impact of internet, telecom
R&D Activity
Impact of technology transfer
Automation

Environmental
-

Impact of the industry on the environment: Carbon footprint, pollution, bio-diversity

Waste and disposal
Water usage
Climate change

Legal
-

Laws related to the industry

Consumer law, Antitrust law, Health and Safety laws, Discrimination laws, labour laws

ANNEXURE 2

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MPE@NMIMS

Course: Industry Analysis

Batch - 16 Trimester 03-05

a
Choice List of Industries
As per separate Excel file

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