Industry and Competitive Analysis

Overview

Industry and competitive analysis (ICA) is a part of any strategy development in firms and other organizations. It contains a very practical set of methods to quickly obtain a good grasp of an industry, be it pharmaceuticals, information and communication technology, aluminum, or even the beer industry. The purpose of ICA is to understand factors that impact on the performance of the industry, and as well the performance of firms within the industry. Firms in an industry can be categorized in so called “strategic groups” based on the strategies they are pursuing. Each strategic group is associated with a certain level of performance, and the firms' “membership” in such groups can be used to predict their moves within the industry. Moreover, managers use ICA to allocate resources, reach strategic goals such as market share or profitability, and help their firms improve their position within the industry.

Instructor: Dr. Martin Wallin
Assistant: Lise Rechsteiner

Goals of the course

• Students develop an understanding of how the structure of industries impact on firm and industry-level performance
• Students get familiar with, and obtain practical skills in analyzing industries and firms within them.
• Students develop in-depth knowledge of one industry.

Format

The course is organized as a combination of lectures and tutored group work involving the selection and analysis of industries, analysis and development of strategies for selected competitors, and presentation of results.

Structure

Thursdays, 9:15 - 13:00 (9am - 1pm)

Lecture room: LFW C1 (except for final session)

Room for final session: HG F33.1

21.02.2013, Session 1: Introduction to strategy
(Lecture slides)
(Organizational issues)
Lecture
Division into industry analysis groups

28.02.2013, Session 2: Understanding industry analysis
(Lecture slides)
Lecture
Tutoring on gathering and assessing industry information

07.03.2013, Session 3: Understanding strategic groups and firm membership
(Lecture slides)
Lecture
Tutoring on industry structure analysis

14.03.2013, Session 4: Strategic group analysis
(Lecture slides)
Lecture
Tutoring on industry structure analysis

21.03.2013, Session 5: Guest Lecture on Competitive Intelligence
Lecture by Chris Pallaris, i-intelligence
(Lecture slides)
Tutoring on industry structure analysis

16.05.2013, Session 8: Final workshop (mandatory)
Presentation of ICA reports

Administratives

Load/credit:

2 SWS / 3 credits

Grade:

2/3 paper/industry report
1/3 presentation / discussion

A letter of confirmation indicates students' analysis of a particular industry and testifies to the completion of an industry report. The course on Industry and Competitive Analysis is an elective course within the MTEC Master program. Students from other ETH departments are welcome.

Registration

Due to intensity of the tutoring format, the number of students is limited to 30 participants (e.g., 6 students in 5 Industry Groups). Students will be accepted according to the order of enrollment in myStudies. The exchange students may register by sending e-mail to lrechsteiner@ethz.ch if they face any problems with registration to myStudies. The exchange students should send individual emails. E-mails that are sent before the starting date of registration to myStudies will not be accepted.

Prerequisites

There are no specific course prerequisites. However, it is recommended MTEC students follow Strategic Management in parallel. Experience in statistical analysis with tools such as SPSS or equivalents, is an advantage.

Literature

Industry Analysis

• Porter; Michael. 2008. The Competitive Forces that shape Strategy. Harvard Business Review. 86 (1): 78-93.
• Porter; Michael. 1996. What is Strategy. Harvard Business Review. 74 (6): 61-78.
• Bain, J. S. 1968. “The Relation of Market Structure to Market Performance”, Industrial Organization, New York, John Wiley, pp. 430-468.
• Caves, R.E. and Porter, M.E. 1977. “From Entry Barriers to Mobility Barriers: Conjectural Decisions and Contrived Deterrence to New Competition”, Quarterly Journal of Economics, 91, pp. 241-261.
• Porter, M.E. 1981. “The Contribution of Industrial Organization to Strategic Management”, Academy of Management Review, 6 (4), pp. 609-620.

Strategic Groups

• Short, Jeremy C., David J. Ketchen, Timothy B. Palmer, and G. Tomas M. Hult. 2007. “Firm, Strategic Group, and Industry Influences on Performance.” Strategic Management Journal, 28: 147-167.
• Fiegenbaum, A., McGee, J. and Thomas, H. 1987. “Exploring the Linkage between Strategic Groups and Competitive Strategy”, International Studies of Management and Organization, 18 (1), pp. 6-25.
• Dranove, D., Peteraf, M. and Shanley, M. 1998. “Do Strategic Groups Exist? An Economic Framework for Analysis”, Strategic Management Journal, 19. pp. 1029-1044.
• Harrigan, K.R. 1985. “An Application of Clustering for Strategic Group Analysis”, Strategic Management Journal, 6, pp. 55-73.

Further Readings

• Barney, J.B. 1996. Gaining and Sustaining Competitive Advantage. Addison-Wesley, Reading MA.
• Porter, M.E. 1998. “The Structural Analysis of Industries”, Competitive Strategy, Free Press, New York, pp. 3-33.
• Porter, M. E. 1998. Competitive Advantage, Fee Press, New York.