Global Industry Analysis Brief

In this brief you will prepare a careful analysis of a global industry. Please address each of the numbered points below. The bulleted points may or may not be important for your industry.

1. Describe the industryand its global context in the most general terms.

• What defines the industry? What is the main product or service?
• What is the main source of value creation? Describe the production process.
• How large is the industry? What is the value of global sales or market value of companies?
• Are there any variations in the definition of the industry?  There are often variations in the definition of industries. For example, the lines between computing hardware, consumer electronics, peripherals, software are often blurred. Is your industry a part of another industry? Production of beef is a part of agricultural production, wine is a part of alcoholic beverages.
• Describe the internationalization of the industry. How is this industry affected by the global environment? Does production rely on imported intermediates? Does it locate production to take advantage of market access or low production costs? Does the industry benefit from larger global markets to take advantage of economies of scale? Does the industry benefit from international fragmentation of production? Does it rely on foreign direct investments? What about use of foreign patents and licenses?

2. Describe how trends in global forcesaffect the demand and competitive conditions in the industry.

• Is the industry sensitive to exchange rate fluctuations? What are some considerations with respect to recent trends in the appreciation or depreciation of major currencies?
• How is the industry affected by the changes in the global cost factors such as: labor costs, costs of fuel, commodity prices?
• How is the industry demand affected by the fluctuations in global business cycles? How pro-cyclical is the industry demand?
• How is the industry affected by the economic geography and transportation? Is logistics playing an important role in the fragmentation of production?
• Do demographic and income distribution changes affect global industry demand? Does the rise of the middle class in the emerging economies matter? What about aging of population in many developed countries? How about higher birth rates in the developing countries?
• How susceptible is the industry to the global risks? Do any of the global risks present an opportunity for the industry? Think broadly: climate change, pandemics, disruption of logistic chains, terrorism, international conflict.

 

3. To what extent is the industry sensitive to the cross-country differencesin operating conditions and demand?

• Are cultural differences affecting the operation of the industry?
• What about differences in tastes and preferences across countries?
• What about political differences?
• Is the industry sensitive to the differences in the intellectual property right enforcement across the countries.
• Is the industry affected by the differences in environmental, labor and other regulations across countries?
• Are there consequential cross-country differences in product standards, safety requirements, content requirements?
• Are differences in business environment, corruption, taxes, regulation affect the location of industry?

 

4. Describe the competitive environment in the industry.

 

4.1. List the main competitors.

• Are these competitors present in all markets?
• What is the relative size of the main competitors?
• Does any of the competitors dominate a particular (perhaps the home-country) market?

4.2. Where is this industry in its lifecycle?

• Is it in the pioneering development, rapid accelerating growth, mature growth, market maturity, decline? Perhaps a combination of the stages.
• Are there products within the industry that are at different stages in the lifecycle? Production of incandescent light bulbs and LED bulbs are a part of the same industry but the two are at different stages of production.
• Do the stages differ across countries?
• Is there a potential for serious disruption due to technological innovation?
• How is the movement through the stages affected by globalization of an industry?

4.3. Describe the nature of competition and competitive strategies employed in this industry.

• Do firms compete based on product differentiation, niche, cost-based competition, or a mix of strategies?
• How is the nature of competition affected by the global economic forces and cross-country differences?
• Is there a race to enter new markets or are most markets entered

4.4. Comment on each of the Porter’s competitive forces that shape industry paying especially close attention to the global aspect of each of the forces. Portern’s forces are related to some of the points listed above. It is also acceptable to point out relation to the Porter’s five forces throughout your narrative.

 

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Formatting requirements: File format – Word, Pages, or PDF; length – 3-5 pages, 1 inch margins all around, times new roman, 12pt, Chicago citation style (APA is also acceptable, as long as you remain consistent and I can clearly check your references), numbered pages, 1.5-2 line spacing.

All other additional materials are not to be counted towards the the 3-5 pages of content. Optional additional materials include: table of content, title page, figures, tables, maps, list of references, appendices.

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Specific style and content guidelines

Below are some guidelines, answers to common questions, and grading notes about the industry brief.

Grading notes. This report is less structured than the country brief. This is because the relative importance of various characteristics differs from industry to industry. If you are reviewing an industry that involved in production of a global commodity, the cultural differences might play a smaller role than if you are talking about fashion.

1. Formatting requirement listed in the assignment.
2. Use of references. See the section on Introspection vs. Synthesis and References (see details below).
3. Every numbered point above needs to be included in the brief. This includes 1, 2, 3, 4.1, 4.2, 4.3, 4.4.
   1. The exact size of each section might vary. For example, the cross-country differences might be less important for a truly global industry like crude oil but would be absolutely crucial for grocery stores or tourism industry.
   2. The bulleted points are there to guide your content.
   3. Not every bulleted point should be included in every brief. Do not forget the Porter’s five forces! This is listed last but is absolutely crucial.
4. In every section it needs to be clear that you are talking about a global industry environment and international aspects of industry operation.
5. Edit the context of your brief to make sure that your brief avoids common shortcomings mentioned below, e.g. presentation vs. interpretation, benchmarking the numbers.

 

Which industry to choose? You can pick any industry you would like. It can be as narrow or as wide as you think is appropriate. I would base your choice on the ease of obtaining information. Successful briefs in the past have also used industries with which the authors had some first-hand familiarity. Do not feel constrained by the list of industries available among the resources included on the slides.

 

Introspection vs. synthesis. In this brief you are asked to combine your own thoughts with analysis of existing external information. Both are important.

You do not have to use the specific content from the resources and references from the slides. Please use those resources as examples of a narrative with industry analysis. Having said that, you do need to use references to support your conclusions and numbers. This is absolutely crucial in preparation of reports and briefs. The consumer of your information needs to know the origin of the numbers. This does not mean that you cannot

Frankly, I think the professionally prepared reports offer some great examples of how to condense a great deal of information into a limited space. Beyond that, your specific industry will dictate the content.

 

Presentation vs. interpretation. Some reports in the past tended to present information without giving us any guidance as to how to interpret that information. After each piece of information you present, ask yourself: what does this mean and why do I think it is important to include this particular piece of information? What point did I try to convey with this piece of information? Something as short as “The following table/figure illustrates the importance of X for Y” is enough. What is less useful is a “data dump” with a ton of numbers without any guidance on what they mean. For example, a list of countries with their GDP’s is not informative without a statement why the size of the countries matter for the industries. Similarly, a list of competitors with their market shares needs to be followed by a conclusion about the concentration of market power (or lack thereof) in the industry. Recall that the tables and figures do not count towards content size requirement.

 

Either the picture or the thousand words. Figures and tables are a great way to make a point with few words. Several reports in the past had a tendency to belabor a point even though there is a great figure or table that makes that same point very clearly. In other words, if there is a table or a figure, feel free to refer to that table without re-listing all the numbers in it. This would eliminate redundancy and streamlines presentation.

 

Mean business, global business. Some reports presented a lot of fascinating facts without clear connection to the international business. Why these facts are relevant for the global aspect of business? I don’t think this will be an issue with the industry brief because it is by its nature about business, but the concern about the international dimension of business remains.

There are often great anecdotes about a specific instance of a marketing snafu of how firm X tried to enter country Y and translated the name of the product in a way that meant something culturally unacceptable. Do not include those unless the lesson is generalizable to global business environment of the industry.

Sometimes there is a very interesting set of details about the geological detail of a particular mining industry. Talk about such detail only if it helps understand the business environment, the cost factors, the process of production, or the nature of competition.

 

Benchmark the numbers. Some numbers speak for themselves, like the GDP per capita expressed in real US dollars, while others need some context. For example, if a country scores 37 on the Hofstede’s individualism measure, it is less clear what that means without a comparison to other countries and their scores. In the past this had been a common theme throughout multiple reports. The numbers are often meaningful only in relative terms. If you report a size of the economy, don’t forget to tell us, how big is it relative to its neighbors or major trading partners. If the country is in 17th place in some ranking, don’t forget to tell us whether this is a high or low ranking relative to the countries with the similar level of development. If an economy is growing fast this year, don’t forget to mention how does the rate of growth compare to other countries and previous years. Please be mindful of this point in your industry briefs.

 

References! You need them. They need to be clearly cited in text. While the news outlets and the Wikipedia are important, don’t forget more serious sources. As a rule of thumb if you have less than 4 per page it is probably too few references, 5-7 is about right, more then 10 is probably not adding much at the margin. These are not hard rules, if you are citing a comprehensive report by a reputable agency (e.g. World Bank, US government) you can refer to a lot of information within that report.