MHR 423 1 Spring 2005External-Analysis AssignmentThis is one of the most important parts of the business plan. The purpose of the assignment is to see to what extent you understand the external environment of the company for which you’re creating the business plan. What do you know about the industry and how it’s changing? Who are the company’s key competitors and why do youthink the company will succeed in spite of them? How much do you know about the company’s target market—the people or companies it expects to buy its products or services? Can you reassure us that they will need and buy your company’s product or service? What else is changing in the environment that might help or adversely affect the company?While the entire external analysis will become part of the group’s business plan (in three separate sections), the grades given for this assignment will be to individuals in the group, and hence may vary. Each group should divide up the external analysis so that each individual has roughly an equal portion of the work to do.1 Each student will conduct research by collecting secondary data (e.g., articles from periodicals, newspapers, journals, trade publications, reports, etc. that may or may not be found on the Internet) and/or primary data (e.g., conversation with an expert) on current factors or trends within their subsection that impact the business in question. Just reporting the research won’t be enough. Each student will have to analyze the implications of the research on the potential success/failure of the business, i.e., make the findings relevant to the business plan (if whatever you found is not relevant, obviously leave it out). The individual papers (each with the student’s name clearly identifying which portion was written by that student) should be collected together and either stapled or put in a folder (ideally, it would have been merged into one file and printed out, with page numbers.) Again, no group grade for this assignment, only individual grades (15 points maximum).This assignment comprises three sections of your business plan. If certain parts are found wanting, I will review the shortcomings with the individuals concerned, and they will have to make the necessary corrections or additions (the original grade will stand; the extra work—which should have been done before submitting the assignment for a grade—will not earn the student a higher grade, but will benefit the group’s final business plan). The paper must be grammatically and structurally correct—use a manual for writers or visit the university’s Writing Center for assistance. I will penalize students whoturn in careless work that should have been edited and proofread (I’m not looking for perfect work—just work that has had some care taken to produce it).The paper is due on or before Session 5, April 27 th. Late papers will be penalized two points for each day they are late. If a student in your group fails to turn in his or her paperto your group on time, it will not impact the grades of the other students if they turn in their parts on time. All papers should be double-spaced, 12-pt font, have one-inch margins, and be page-numbered.1 A suggested breakdown is: industry analysis, competitive analysis, market analysis, economic and technological environments, and demographic, lifestyles/attitudes, and regulatory/legislative environmentsMHR 423 2 Spring 2005Industry AnalysisThe first step before doing any research or analysis is to be sure you label the industry—the competitive arena in which the company competes, and it could be a niche or segmentof a larger industry—correctly. After that, here are some ideas to help you research and analyze the industry:- Try to find some articles about the industry and how it’s changing (although the industry comprises competitors, someone else is going to research them)2- Try to determine how fast it’s growing (or not). I’m referring to total dollar sales of the industry (though sometimes other measures are used). If it’s growing at >5%/yr, it’s in the growth stage of its lifecycle. If it had been growing but growth has slowed to <5%/yr, it’s mature. If growth has been negative for several years, it’s declining. If it is a very young or new industry, growing at <5%/yr, it is still emerging. Finally, if growth is slowing, companies are acquiring competitors (there’s a lot of consolidation going on), and small companies are failing or going bankrupt, then the industry is in shakeout.- If you have uncovered some evidence that leads you to believe the industry is changing, tell us how. What are the drivers of those changes? How will the industry be different tomorrow than it is today? For example, in most consumer electronics, trends include more performance, smaller models, and lower prices. Prices are high only for really new technology or higher levels of performance.- Do a Porter’s five-forces model of competitive threats, which is really an industry analysis (I assume most of you know how to do this, but see me if you don’t). Focus on intensity of rivalry among competitors, bargaining power of buyers and suppliers, height of barriers to entry, and strength of substitutes.- If your industry has disparate or strategically dissimilar competitors, you might also try to do a strategic-group map. Let me know if this might be true in your industry, and I’ll give you some help on constructing one. If not, just skip this.Competitive AnalysisThe purpose of this analysis is to find out how much you know about your competitors, especially those with whom you will be competing head-on. The following may help:- Determine the scope of competition—is it global, national, regional, statewide, local, or online? This will help determine who is—and isn’t—a competitor- Try to get market-share information for the industry, although this is often unavailable (be careful—if you get sales data for the top five or so in the industry,you cannot determine market shares unless you also know the total sales of all other companies in the industry)- Competitors that are publicly held are easy to get information on, especially financial information, as well as articles about them and their products2 For those who have not yet accessed the resources of your university library online, go to the CPP home page, <University Library>, <Databases>, and <Business/Economics>. For any database, you will need