( An IACBE Accredited Institution )

Industry AnalyticsPost Graduate Programme

(2010 – 12)

3rd Term

Alliance Business SchoolBangalore

04/19/23 PGP, Alliance Business School 2

Overview of Industry Analytics

04/19/23 PGP, Alliance Business School 3

What is Industry Analytics?

Industry analytics is a course of study designed to provide the student with a comprehensive understanding of industry or sector: Global and Indian.

It imparts knowledge and expertise about industry or sector to students.

Each student group will identify and select ONE industry or sector from the manufacturing / service sector in India.

04/19/23 PGP, Alliance Business School 4

Objectives of the Course

After completion of this course, you should be able:o To analysis the Indian economy and its various sectors.

o To provide a comprehensive and focused insight within the sector.

o To acquire skills in analyzing the situation and making broad decisions about industry.

o To understand how industry structure drives competition, which determines the level of industry profitability.

o To assess industry attractiveness (future profit potential).

o To use evidence on changes in industry structure to forecast future profitability.

o To formulate strategies to change industry structure to improve industry profitability.

o To identify Key Success Factors.

The course is aimed at preparing the students on one industry or sector through useful methodologies and knowledge of data, their location, and use of databases.

1.1

Analysis of demandAnalysis of demand

• Who are our customers?Who are our customers?

• What do they want?What do they want?

Analysis of competitionAnalysis of competition

• What drives competition?What drives competition?

• What are the main dimensions What are the main dimensions of competition?of competition?

•How intense is competition?How intense is competition?

•How to obtain a superior How to obtain a superior competitive position?competitive position?

What do customers What do customers want?want?

How does the firm survive How does the firm survive competitioncompetition

Pre-requisites for success

Identifying Key Success Factors

KEY SUCCESS FACTORS

SUPPLIERS

POTENTIALENTRANTS SUBSTITUTES

BUYERS

INDUSTRYCOMPETITORS

Rivalry AmongExisting Firms

Bargaining power of suppliers

Bargaining power of buyers

Threat of

new entrants

Threat of

substitutes

Porter’s Five Forces of Competition Framework

THREAT OF ENTRY• Capital requirements• Economies of scale• Absolute cost advantage• Product differentiation• Access to distribution channels• Legal/ regulatory barriers• Retaliation

SUBSTITUTECOMPETITION

• Buyers’ propensity to substitute• Relative prices & performance of substitutes

SUPPLIER POWER• Uniqueness of service

• Ability to substitute

INDUSTRY RIVALRY•Concentration•Diversity of competitors•Product differentiation•Excess capacity & exit barriers•Cost conditions

BUYER POWER• Buyers’ price sensitivity

• Relative bargaining power

The Structural Determinants of Competition

Macro and Micro Economic Analysis

Chapterisation Scheme

Introduction & Literature Review Global Scenario Country Review Industry Review Analytical Framework Company Review Industry Outlook – Future Prospects

04/19/23 9PGP, Alliance Business School

Chapter 1: Introduction & Literature Review

Introduction of the study – need for the study – importance of the study – methodology – data sources.

Review of existing literature available for the industry/ sector.

04/19/23 10PGP, Alliance Business School

Chapter 2: Global Scenario

The selection of the industry sector will be first studied from a global perspective.

For example, global cement industry; global banking industry, global automobile industry.

Manufacturing sector: industry sector

Services sector: industry sector

04/19/23 11PGP, Alliance Business School

Manufacturing Sector

Global Market Structure: Growth pattern Global Players Global Products Global Technology Global Investments Producers/Production Consumption Sales Exports Pricing Demand and Supply Productivity

04/19/23 12PGP, Alliance Business School

Services Sector

Global market structure: Growth pattern Global players Global trends Global products Global Human Capital

04/19/23 13PGP, Alliance Business School

Chapter 3: Country Review

Industry Structure: Organized Sector

Contribution to GDP

Economic importance: capacity utilization

Employment, gross value added (I/O), employment

Fixed investment (www.mospi.nic.in, I/O tables CSO)

Capacity expansion

Corporate Taxation

Technology process

Exports and imports

CapitalLinePlus, ASI, Planning Commission statistics.

04/19/23 14PGP, Alliance Business School

Chapter 3: Country Review (Service sector) Sector overview Service Tax Act 1996 Regulations and Government Approvals Contribution to GDP Employment Technology Corporate Taxation Trends Consolidation FDI

04/19/23 15PGP, Alliance Business School

Chapter 4: Analytical Framework

1. Technical Analysis: R&D investment, technology processes, upgradation.

2. Commercial Analysis: Cost structure analysis, Pricing analysis.

3. Industry Analysis: Porter’s Five Forces Analysis, SWOT Analysis, 5 Key Ratio Analysis (Debt-equity Ratios, Current Ratios, Turn over Ratios, Profitability Ratios).

04/19/23 16PGP, Alliance Business School

Chapter 5: Company Analysis

Top Five Companies of the sector Bottom Five Companies of the sector Company details: historical background, equity,

profits and losses, sales, assets, turnover, profitability analysis.

Year-on-Year performance analysis based on:

- ratio analysis (five key ratios)

- comparisons with the industry average ratios

- inter-company comparison04/19/23 17PGP, Alliance Business School

Chapter 6: Industry Outlook

Outlook for the Year 2010.

1. Prospects: government policies regulating the industry and

Central Budget 2009 highlights and analysis

2. Projections: Trends – sales, production, employment, capital and

financing, profits and losses, investments; Policy environment:

growth-oriented, dampener

3. Challenges: competition, imports, technology, growth of

consumer and industrial market segments

04/19/23 18PGP, Alliance Business School

Industries can be considered

1. Steel

2. Automobile

3. Cement

4. Information Technology

5. Sugar

6. Textile

7. Power

8. Telecom

9. Aviation

10. Paper

04/19/23 PGP, Alliance Business School 19

11. Banking (Public)

12. Banking (Private)

13. Paint

14. Pharmaceutical

15. Retailing

16. Refinery

17. Aluminium

18. Hotel

19. Biotechnology

20. Hospital

04/19/23 PGP, Alliance Business School 20

?