Company Strategy Case Paper
? Give a brief introduction of the company, what their products/services are and how they make money – their business model (Note this intro needs to be brief, esp. if this is the company everybody is familiar with)
? What is the economics of the industry? How is the growth potential of the industry? Will predicted demand keep growing? Do you have any charts, figures, or facts to support that? How attractive is the industry to your company? How attractive is it to the competitors? Will it become more or less attractive in the future?
? Describe the competition dynamics of this industry using the industry’s five forces model, and analyze how strong a position your company has in its industry, in relation to its competitors, buyers, suppliers, new entrants, and substitute products. (Please use statistics such as the market share of each of the company’s products, or its closest competitors, how they stack up and predict how these market shares will shift in the future and give your rationale)
? Where do you think the industry is headed? Are there major trends that may potentially change the structure/rule of the industry? How will these industry changes affect your company? How is the industry/company impacted by the globalization?
mpany to evaluate its performance such as its Revenue, Cost, Gross profit margin, ROE, Cash flow and their growth rate over the last 5 or 10 years. What does these numbers and growth rates tell you about the prospects for the company?
? How has the trend been for the company’s revenue (top line) growth? Where does the revenue come from and where does its revenue mainly come from and how about predicting their future growth rates? (Consult Bloomberg or SEC filing 10-K or 10-Q for revenue breakdown into different segments/products/geographies).
? How has the trend been for the company’s net profit (bottom line) growth? What is the gross profit margin like and has it been increasing or decreasing in recent years? What is the company’s cost structure?
? Does your company have a superior mix of products/services, compared to competitors? What are strengths and weaknesses of your company? How does your company compared with competitors in terms of cost, efficiency, brand recognition, ability to come up with new innovation, etc.? And what are the opportunities and threats your company is facing based on these strengths and weaknesses?
? What is the core competency of your company? How does your company’s value chain look like? What parts of the value chain particularly add value to your company’s performance? How is that value achieved?
? How is the company’s cash flow position like? Does it have enough cash to sustain its growth or is it overly leveraged / reliant on debt?
? In essence, do you think the company has a competitive advantage? What is the strategy you think has led to the current success/failure of the company? How do they deliver it?
? Do you think the company is well positioned for the future? Do you think the company has a sustainable competitive advantage in the future years? Explain why.
? What current issues does it face and what impact will it have on the company? Do you have recommendations for the company about its future moves?
? How is the company’s ethical standard? Is this ethical standard doing well for the company?
? If you were an investor looking for stocks to invest in for the long term, would you invest in the company’s stock? Why or why not? (Note that this is a purely hypothetical question assuming stock market is rational and price reasonable, while in the real world the market is often irrational and investing involves many more considerations than studied here)
Based on the past experience, I have the following advice and suggestions:
• Don’t get buried in the information. Focus on the questions/issues and use first your common sense and the framework learned in the chapter in identifying and analyzing new entrants, buyers, suppliers, competitors, etc. and how they affect the dynamics of the industry that your company resides in.
• Questions not necessarily have a single right answer. The important thing is being able to support your argument with analyses and evidence. Not only is it OK to differ; but actually it is key in strategy to be able to think differently from others.
• Analyses need to be well grounded. A simple listing of SWOT analysis with no depth and insight from independent thinking and research will count against you.
• Delve into figures and facts: numbers are often the most revealing, and try to gain ideas from the numbers and find out the business model support behind the numbers.
• Be forward looking: look not only how successful the company has been but also more importantly the future competitiveness of the company. As the saying goes: you need to go where the puck is going to be, not where it is.
• Do not forget the industry: many people tend to focus on the company, but as we said, industry is one of the most critical elements impacting the company, so please analyze the industry characteristics, how they are changing, and how they impact the growth of the company.
1. Company’s SEC filings, such as 10K (annual), 10Q (quarterly), which gives you comprehensive information about the company’s business, financials, company’s own analysis, and many other details (you can Google 10K or find it from company’s own or SEC website)
2. Mergent Online (a library database) gives you 15 years of the company’s financial statements so you can easily see the trend, plus many other resources
3. Bloomberg. Our business school just installed a Bloomberg terminal outside of the technology support office, room PA435. Bloomberg gives you all the information you need in one place including company news, all the financials, SEC filings, analyst reports, and much more. After creating a login, you can type in MAIN to go in the main menu, choose equities, then type in the company name in the command line. Then choose the kind of analysis you want, e.g. you can choose to read company news, do financial analysis, or supply chain analysis (which gives all the suppliers and customers of the company), etc. Play around and you will discover a treasure trove of information.
4. Other library databases such as Business Source Premier (library database), which often gives you the company’s SWOT analysis, industry profiles, and many articles and coverage from various journals and newspapers (But pls. note the SWOT and other industry analysis here are only to jog your thinking, and copying the SWOT analysis here without giving your own thought will only count against you).
The guide about how to access many the above-mentioned databases and resources is available in the library page: http://montclair.libguides.com/business. Please note you may need to click on different tabs to find the information you want. If you have any questions, please feel free to contact me or our business librarian, with his information listed on the page.