Determine what is important in the industry. What activities MUST a company do well to succeed? What are the key success factors (identify at least three)? Usually, you can find what is important by reading the 10-K (management discusses this), or by reading industry analysts’ reports. Use your own personal experience (if you have some in respect to the industry). For example, in the retail industry, managing inventory is critical. A clothing company must have the right product available (on shelves or available on the website) at the right time.
Identify the key metrics that could be used to illustrate how each company has done on those key success factors detailed in point 2 above. Make sure you calculate any metrics over at least a 3-year period. For example, in order to understand whether a clothing company is managing inventory well, you could examine the inventory turnover ratio (or days in inventory) and the gross margin. The gross margin tells you whether the company is able to sell the product at a higher price relative to the cost of purchasing the item (obviously the higher this ratio the better). The inventory turnover ratio tells you whether the company is not able to sell its product as quickly as it had in the past.
For example, let’s assume that the gross margin stayed the same over the past three years. However, you notice that the inventory turnover ratio is decreasing. This likely means that your company has to hold onto its inventory longer to sell it. If I were the CEO, I would begin to wonder whether my buyers were doing a good job (this would indicate a potential problem to me). Alternatively, let’s assume that the gross margin has started to decline over the last three years but the inventory turnover ratio remained fairly stable. This might mean that the company has started to reduce the price of its product just to sell the product (so that the inventory doesn’t become dated). Looking at the days in inventory would help here too. As the CEO, I would again begin to wonder whether my buyers were missing important fashion trends. By digging into these key success factors, you can identify not only strengths or weaknesses of your company, but also whether there are opportunities to take advantage of competitors.

2- Write a brief assessment (approximately a paragraph) for each of the following industry forces based on your research.

Bargaining Power of Buyers
Bargaining Power of Suppliers
Threat of New Entrants
Threat of Substitute Products
Interfirm Rivalry

3- EXTERNAL ENVIRONMENT ANALYSIS

General Environment

Economic
Sociocultural
Global
Technological
Political/legal
Demographics
Physical

– Please provide graphs and charts.