Porter’s five forces model is used as part of the industry analysis completed in this workshop and the ADP. Refer to the form illustrated in Figure 1. The aim is to determine an organization’s competitive advantage compared to its competitors. Assessing the competition in the industry, determining the potential of new entrants, the power of the suppliers and customers, and the threat of substitutes enables an organization to continually reassess its strategy. Additional areas addressed in this week’s industry analysis are rivalry intensity, economies of scale, and distribution channels. The latter has been of interest post-pandemic. The process is crucial “because an optimized supply chain results in lower costs and a more efficient production cycle. Companies seek to improve their supply chains so they can reduce their costs and remain competitive” (Hayes, 2022, para. 2).
- Read the Miniature Guide to Critical Thinking: Concepts and Tools.
- Review Chapter 6 Mechanics of Style in the APA Style Manual 7e.
- Conduct research to locate the most current, relevant information on how automation is taking jobs from the employee industry.
- Complete industry analysis for each content area in the ADP Industry Analysis form once the data has been collected.
Student Guide:
INDUSTRY ANALYSIS
For the Industry Analysis milestone, you will conduct research on the selected industry. Data will then be analyzed to consider the market conditions to better understand the competitiveness of the industry, new entrants, ease of entry and difficulties associated with exiting, buyer power, supplier power, the distribution channels, and economies of scale. Having a knowledge of the competition and market trends better enables an organization to forecast supply and demand and other industry factors. Knowledge of the industry prepares doctoral students to position themselves to have more informed discussions with potential partner organizations and to be better positioned for making a good partner organization selection.
MILESTONE: Industry Analysis
For this milestone, you will engage in the following steps to lay the foundational support for the successful completion of the Applied Doctoral Project:
NOTE The Identification of Five Potential Partner Organizations section of the Industry Analysis form is intentionally placed in Step 2. The purpose is to provide you with an opportunity to gain much insight about your selected industry before identifying five potential partner organizations so you may make a more informed decision.
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Industry Analysis |
STEPS |
MILESTONE |
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Identification of Five Potential Partner Organizations |
Step 2 |
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Porter's Five Forces Analysis |
Step 1 |
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Competitor Rivalry |
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Threat of New Entrants |
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Threat of Substitute Products and or Services |
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Bargaining Power of Suppliers |
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Distribution Channels |
Step 3 |
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Economies of Scale |
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Industry Analysis Form |
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Resources
· Document: DBA Handbook
· Document: IBISWorld Measuring & Tracking Industry Risk
· Document: IBIS World Pet Stores Industry Report
· Document: Industry Analysis form
· JPG Files: Virtuous Business Model
· Webpage: CEO Express
· Webpage: Decision Matrix Analysis by Mindtools
· Webpage: How to Conduct and Prepare a Competitive Analysis
· Webpage: IBIS World Industry Trends for 2021
· Webpage: IBISWorld List of Industries
· Webpage: IBIS World Religious Organizations Industry in the US
· Webpage: Library of Congress: Doing Industry Research
· Webpage: Mindtool’s Porter’s Five Forces Model
· Webpage: NAICS Code List (SIC codes also identified)
· Webpage: Public Administration NAICS Codes
· Webpage: U.S. Bureau of Labor Statistics Industries at a Glance
· Webpage: What is a Decision Matrix?
SCHEDULE
There are three steps prior to completion of the Industry Analysis milestone. Review the content due for each step and the milestone in its entirety. Although completion dates are flexible in the ADP Experience, for the traditional student track (approximate 3-year program), the recommended pacing is to complete one step about every 4 to 5 weeks during the four-month semester. For students enrolled in the DBA degree-completion track (approximate 18-month program), the recommended pacing is to proximate one step every 2 to 3 weeks for this milestone.
1. Check to be sure that you have the most current DBA Handbook. Download and review updates, as applicable.
2. Read this Student Guide in its entirety.
3. Attend the monthly Zoom session with your Research Chair.
4. Complete the steps in order.
5. To pace yourself for timely completion, refer to the suggested schedule in this Student Guide.
6. Utilize the resources to support accurate completion of the steps.
7. Locate and read additional resources to expand your understanding of the concepts.
8. As you have questions, ideas, concerns, prayer requests, praises, or AHA! moments, post them in the Q&A discussion forum.
9. Complete the ADP milestone, incorporating prior feedback from the Research Chair.
10. Revise the completed milestone (as often and as much as needed) based on feedback from the Research Chair.
Religious Organizations Industry
It may be questioned if the churches and other religious organizations can be assessed similar to for profit industries. The answer is ‘YES’. The religious organizations industry (SIC 8661 | NAICS 813110)
consists of religious organizations that provide religious worship or promote religious activities for both organized religions and smaller faiths that are not recognized in mainstream religious teaching. Operators include churches, temples, mosques, synagogues and other houses of worship, in addition to convents, monasteries and religiously affiliated community centers. This industry does not include schools and hospitals operated by religious organizations.
Main Activities
· Bible society operation
· Church operation
· Missionary society operation
· Monastery operation (except schools)
· Mosque operation
· Synagogue operation
· Temple operation
· Religious shrines operation
· Convents (except schools) operation (“Religious Organizations Industry in the US,” 2021, para. 5)
As with for-profit industry analysis, the non-profit religious organizations industry can be analyzed for various factors as shown in Table 1.
Table 1
Industry Analysis Factors Common Among Industries
Source: IBIS World, Religious Organizations Industry in the US (2021)
Governmental Industry Analysis
We have shown that the religious organization industry can be analyzed similarly as the for-profit industry, but what about the government market? Once again, the answer is ‘YES’.
The Government Market consists of public sectors controlled by national, state or provincial, and local governments. Public sectors can include critical services such as national defense, homeland security, police protection, urban planning, taxation, etc. Market Research reports for the Public Sector industry can help build the foundation for effective solicitation and creation of contracts. Government agencies use market research and trend analysis as a critical component to determine best practice for acquisition planning, while commercial organizations use it to position themselves to bid on those contracts.
Research has a high impact on government planning and the procurement process. Utilizing analyzed data can assist in making these processes more successful. Market research also provides government personnel with the foundation to accurately promote fair and open competition for businesses.
NAICS Codes for public administration (PA) begin with the sector number 92. Refer to a listing of the specific codes for the PA sector: https://www.naics.com/six-digit-naics/?code=92
STEP one: Porter’s Five Forces Analysis
The starting point for conducting industry analysis is to refer to the NAICS code that applies to the partner organization selected for your applied doctoral project. What is the NAICS code? Based on that code, conduct the industry analysis—updating and expanding on the analysis first completed in the Industry Analysis milestone. Identifying the correct code assures that the data gathered directly corresponds to the partner organization.
Organizations respond to external environments not only through their structures, but also by the domains they choose and the internal dimensions and capabilities they select. An organization defines itself and its niche in an environment by the choice of its domain, i.e., what sector or field of the environment it will use its technology, products, and services to compete in and serve. Some of the major sectors of a task environment include marketing, technology, government, financial resources, and human resources.
Presently, several environmental domains that once were considered stable have become more complex and unstable—e.g., toys, public utilities, the U.S. Postal Service, and higher education. And even domains are changing. For example, the traditionally stable and somewhat unchanging domain of higher education has become more complex with the entry of for-profit educational institutions, MOOCs (massive open online courses), internal company “universities,” and other certification and degree programs outside traditional private institutions. Sharing-economy companies such as Uber and Airbnb have redefined the transportation domain in which taxis operate and the hospitality domain in which hotels and bed and breakfasts serve. New business models that use mobile phones, ICTs (information communication technologies), and apps remove middle management layers in traditional organizations and structures.
With a chosen domain in which to operate, owners and leaders must organize internal dimensions to compete in and serve their markets. For example, hierarchies of authority and chain of command are used by owners and top-level leaders to develop and implement strategic and enterprise decisions; managers are required to provide technologies, training, accounting, legal, and other infrastructure resources; and cultures still count to establish and maintain norms, relationships, legal and ethical practices, and the reputation of organizations. (“Principles of Management,” n.d., paras. 4–6).
Based on the identified code, conduct the industry analysis. A primary means to conduct an industry analysis is through Porter’s five forces model as shown in Figure 2.
Industry structure changes over time, and is not static. Over time, buyers or suppliers can become more or less powerful. Technological or managerial innovations can make new entry or substitution more or less likely. Changes in regulation can change the intensity of rivalry, threat of entry and affect barriers to entry. Choices by competition, such as new pricing or distribution approaches, can also affect the path of industry competition.
Five Forces analysis is essential to anticipate and exploit industry structural change. (“The Five Forces,” n.d., Industry Structure, para. 1)
Figure 2
Porter’s Five Forces Model
Source: The five forces model (n.d.)
Guidelines for Completing the Industry Analysis using Porter’s Five Forces Model
Prior to completing each of the five forces sections in the Industry Analysis form, review various resources detailing Porter’s five forces model to gain a clear understanding of the business management concept. Next, complete industry research using the known NAICS Code, gathering data that is both current and relevant. Complete an analysis for each of the five forces and report the findings in the Industry Analysis form.
TIP Check out a number of industry reports and formatting for content of industry analysis reports. See, for example, IBISWorld’s Pet Store Industry sample report available for download via the internet link for the source listed in Resources earlier in this Student Guide.
STEP TWO: Idenitification of five organizations
Now that you have obtained a good understanding of your selected industry, do you have potential partner organizations identified? It is possible that you already have an indication of the organization with whom you will partner—especially if it is your workplace or an organization with which you already have a relationship established (e.g., church, affiliated member organization, or non-profit entity). Notwithstanding, this first section of the Industry Analysis form will be completed by all students.
NOTE All students are required to complete the five potential partner organizations section in the Industry Analysis form in its entirety—even if you already have an organization selected. The reason is that it will further expand your understanding of the competition and the effort has the propensity to provide you with a contingency plan of sorts just in case the organization partnership does not occur as originally planned.
So, what is the best way to select five potential partner organizations? One possibility is to create a matrix to assess each of the organization on prioritized factors—some ‘must haves’ along with wants and desires. For example, it may be imperative for you to work with an organization that is in close proximity to where you live, although that is definitely not a requirement for completion of the applied doctoral project. It may be that you have a desire to engage in a new professional career and so seek to partner with an organization where you can either gain access to key people—those who may become connections within the organization or external to it. Or, perhaps, you have a “dream” organization in your sights. If so, you are encouraged to pursue your dreams. It was Goethe who said,
Passion is actually one of the most powerful motivators. Students are encouraged to pursue their godly passions as they have often been most closely aligned to one’s life calling (Millard, 2012).
STEP THREE: Distribution channels & economies of scale
For this step, you will research, analyze, and write about distribution channels and economies of scale in the industry. The two business concepts are introduced below.
Distribution Channels
Understanding Distribution Channels
A distribution channel is a path by which all goods and services must travel to arrive at the intended consumer. Conversely, it also describes the pathway payments make from the end consumer to the original vendor. Distribution channels can be short or long, and depend on the number of intermediaries required to deliver a product or service.
Goods and services sometimes make their way to consumers through multiple channels—a combination of short and long. Increasing the number of ways a consumer is able to find a good can increase sales. But it can also create a complex system that sometimes makes distribution management difficult. Longer distribution channels can also mean less profit each intermediary charges a manufacturer for its service.
Direct and Indirect Channels
Channels are broken into two different forms—direct and indirect. A direct channel allows the consumer to make purchases from the manufacturer while an indirect channel allows the consumer to buy the goods from a wholesaler or retailer. Indirect channels are typical for goods that are sold in traditional brick-and-mortar stores.
Economies of Scale
What Are Economies of Scale?
Economies of scale are cost advantages reaped by companies when production becomes efficient. Companies can achieve economies of scale by increasing production and lowering costs. This happens because costs are spread over a larger number of goods. Costs can be both fixed and variable.
The size of the business generally matters when it comes to economies of scale. The larger the business, the more the cost savings.
Understanding Economies of Scale
Economies of scale are an important concept for any business in any industry and represent the cost-savings and competitive advantages larger businesses have over smaller ones.
Understanding Economies of Scale
Economies of scale are an important concept for any business in any industry and represent the cost-savings and competitive advantages larger businesses have over smaller ones.
A company can create a diseconomy of scale when it becomes too large and chases an economy of scale.
Economies of scale can be both internal and external. Internal economies of scale are based on management decisions, while external ones have to do with outside factors.
Internal Versus External Economies of Scale
As mentioned above, there are two different types of economies of scale. Internal economies are borne from within the company. External ones are based on external factors.
Internal economies of scale happen when a company cuts costs internally, so they're unique to that particular firm. This may be the result of the sheer size of a company or because of decisions from the firm's management. Larger companies may be able to achieve internal economies of scale—lowering their costs and raising their production levels—because they can buy resources in bulk, have a patent or special technology, or because they can access more capital.
External economies of scale, on the other hand, are achieved because of external factors, or factors that affect an entire industry. That means no one company controls costs on its own. These occur when there is a highly-skilled labor pool, subsidies and/or tax reductions, and partnerships and joint ventures—anything that can cut down on costs to many companies in a specific industry. (Kenton, 2021, paras. 1, 2, 6–8)
milestone: industry analysis
Compilation of the Milestone
Upon completion of each of the steps and ahead of submitting the Industry Analysis form, complete the following:
· Read through the form in its entirety to be sure that the content is integrated. When writing specific segments over time, nuanced changes can occur.
· Review the completed form to be sure all areas are included.
· Include the Title (for name placement purposes) and References pages.
· All content is to be completed using the 7 C’s of good writing: clear, concise, complete, correct, correlated to the research, creative, and with evidence of your critical thinking. Write in the tone and style of professional consulting work.
· All narrative content is to be written single-spaced with one line space between paragraphs and lists.
· Complete a Word spelling and grammar check, and update accordingly.
· Complete a Grammarly check. Update as applicable.
· Review all figures and tables for proper formatting. Be sure that graphic content is readable.
· Ensure proper APA formatting is used throughout for headings, citations, and references.
· Do not include the previous Industry Selection or its associated references list, tables, figures, appendices, etc. Only submit the Industry Analysis and its associated pages.
· Save and back up this milestone. Ensure you have two saved copies.
· Submit the milestone to your Research Chair—in its entirety as a Word document.
IMPORTANT: The Industry Analysis milestone must be approved by your Research Chair before you can move on to the next milestone.
References
Fernando, J. (2021, January 24). Distribution Channel. In Investopedia.
https://www.investopedia.com/terms/d/distribution-channel.asp
Government market research reports & industry analysis. (n.d.). Market Research.
https://www.marketresearch.com/Public-Sector-c93/Government-c235/
Kenton, W. (2021, January 21). Economies of scale. In Investopedia.
https://www.investopedia.com/terms/e/economiesofscale.asp
Millard, B. (2012, January). Discover your life calling: Unleash the power of purpose in your life.
Life Calling & Leadership Center, Indiana Wesleyan University.
Principles of management. The internal organization and external environments. (n.d.). OpenStax. (Licensed
under a Creative Commons Attribution 4.0 International License).
https://opentextbc.ca/principlesofmanagementopenstax/chapter/the-internal-organization-and- external-environments/
Religious organizations industry in the US — market research report. (2021, February 9). IBISWorld.
Retrieved February 22, 2021, from
https://www.ibisworld.com/united-states/market-research-reports/religious-organizations-
industry/
The five forces model. (n.d.). Institute for Strategy & Effectiveness.
https://www.isc.hbs.edu/strategy/business-strategy/Pages/the-five-forces.aspx
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Industry Analysis
Complete the following form.
• See an example industry analysis from IBIS World for the pet industry:
https://www.ibisworld.com/resources/documents/45391-Pet-Stores-in-the-US-Industry-Sample-Report.pdf
Notice the inclusion of both description and varied graphics, all with detailed evidential support. One or
more appendix pages may be added to this report to convey data in graphic form or to provide in a single
page a digital dashboard display. If including appendix pages, be sure to reference them in the body of the
paragraphs as exampled by the following: See Appendix A. Ref