company analysis

You are asked to write a thorough company analysis. This means writing a paper that is 14 to 16 doublespaced pages (1-inch margins, 12-point New Times Roman font). The page limit does not include exhibits and references. Extensive outside research will be required to complete the assignment. Please specify were you got your information using Modern Language Association (MLA) style. A good MLA style online reference is: When writing this assignment, you should adopt the role of an outside analyst from a consulting firm that is evaluating the current and future potential of the strategies being pursued by the firm being researched. For assistance with the external research, please contact Sr. Librarian, Loreen Henry. She is the JSOMâs liaison to the McDermott Library. Her email is, and office number is, 972 883- 2126. A complete analysis contains five main parts: 1. A financial analysis to assess the companyâs health 2. An external analysis of the firm 3. An internal analysis of the firm 4. The identification of the firm’s strategy as well as the strategies of its competitors 5. A set of strategic recommendations for the focal firm based on your analysis; a discussion about the potential implementation constraints and alternatives to address these constraints Begin your final report with a short executive summaryâabout five sentencesâthat explains which firm you are analyzing, what you looked at, and (in one short paragraph or less) what you recommend. This will help your readers grasp what is happening without reading the entire case in order to set up the scenario. You should also use subtitles to help your reader follow your writing (e.g., (1) Financial Analysis, (2) External Analysis, etc.). If your reader cannot follow what your write, you will get zero points. The best time to write this summary is after youâve completed the 5 main parts of the paper. 1. Financial Analysis The financial analysis should demonstrate two things: 1. Is the firm itself financially healthy? Look at its performance over time, both in terms of being profitable or solvent, and how the market has rewarded it. In general, this portion of the assignment should be an in-depth analysis of the financial status of the firm(s) being considered. 2. How strong is it relative to its competition? Are its competitors more or less profitable over time? How has the market valued them? You should include appropriate figures and ratios to illustrate your points. Whatever you find from outside research put it into useful charts or tables and place it in the exhibits section. State your conclusions in the report itself, and reference the specific exhibits when you do. The key is to support 2 your conclusions. Everything you include must lead to a point, otherwise do not include it. The tables below should serve as a template for your analysis. Sample Tables for the Financial Analysis Table 1. Change in Financials Case Firm Current Year Prior Years Average % Change Income Statement … Balance Sheet … Table 2. Common Size Statements of Case firm and closest competitor Case Firm % Closest Competitor(s) % Income Statement Sales 100% 100% … Balance Sheet Total Assets 100% 100% … Table 3. Financial Ratios for Case firm and closest competitor Ratio Case Firm Closest Competitor(s) Current Ratio Quick Ratio Debt-to-equity Ratio Debt-to-total Assets Ratio Inventory Turnover Total Asset Turnover Gross Profit Margin Net Profit Margin Return on Assets Return on Equity 2. External Analysis The external analysis of the firm describes the context in which the firm must compete and infers the opportunities and threats the firm faces. Thorough external analyses will first address the general environment described in class. The external analysis should also look at the industry dynamics and competitive market (e.g. who is the firm selling to, what challenges does the firm face in profitably reaching their customers, who are the firmâs competitorsâare they larger, smaller, more profitable, more flexible?) The 5-forces model is a good tool to organize your work when defining the competitive environment. While not perfect, it will ensure that you have covered the main points. 3. Internal Analysis The internal analysis of the firm describes the strengths and weaknesses the firm brings to its competitive environment. What resources or capabilities can a firm leverage against its competitors and/or to tap new markets? What weaknesses might we see that will handicap the firm in the future? What are the key 3 strategies the firm is pursuing? Explain whether the strategies are good or bad, and provide support for your arguments. To answer the above questions, you should perform the internal analysis using the value chain approach we will discuss in class. Specifically, you should consider each part of the value chain activities and determine which activity(ies) is helping your firm yield a competitive advantage. A good internal analysis will show the link between the firmâs core competencies and results. As an example, cost leadership can be the result of engineering capabilities. The VRIN (valuable, rare, inimitable, nonsubstitutable) analysis is a good analytical tool, which can help you to organize your thoughts and develop a supporting argument for why a resource or capability yields a competitive advantage. 4. Identification of the firm’s strategy and its competitors’ strategies This section is meant to accomplish two goals: First, you are asked to summarize the focal firm’s strategy as well as its competitors’ strategies, based upon your analysis of the internal and the external environments. Second, you should discuss why each firm has chosen its respective strategy, as well as the main advantages and disadvantages of each, based upon the firm’s characteristics. Keep in mind that this does not mean you should replicate the same level of analysis that you have performed on the focal firm on every competitor. However, you should be familiar enough with each competitor to discuss its strategy at a high level. This task could be accomplished by means of a table, as follows: Firm Name Strategy Highlights Rationale for Strategy Pros and Cons Focal firm … Competitor 1 … Competitor 2 … … 5. Recommendations Having analyzed the firm and its competitors, you should have an idea of what strengths the firm should be leveraging on and you can look again at the external environment to see what opportunities it should pursue. You should be able to propose several (~3) strategy recommendations for your firm. As you describe each strategy, you should also discuss at least two influences on other functions within the firm. In many of the cases, the firm in question is contemplating, or has implemented, several specific strategic actions (e.g., an acquisition). In this situation, the written case analysis should also include an evaluation of these specific strategic actions. Where appropriate, strategy recommendations should be made with a concern towards ethics and logically justified. The recommended strategy should occupy the last quarter to one-third of your paper. Ideally, you would give three alternatives, possibly listed in bulleted form, and then expanded upon in turn. One option could actually include âdonât change anything,â but very likely this will not be the best choice, especially in a competitive market. Select one of these alternatives as the preferred recommendation. While all three might be good, a firm may only be able to attack one at a time, and will want to know which one you think has the biggest return. Explain why you believe this is the best option for the firm. In addition, discuss constraints (or trade-offs) the firm may encounter while pursuing your recommendation. Discuss alternative recommendations to address such constraints. The alternatives need to be specific action itemsâsomething that if it were developed into a plan, you could go to a bank and 4 get financing. As an example, instead of saying âFirm Z should acquire other companies,â try to suggest possible candidatesâand say why Firm Z would benefit. If you canât find specific firms, you could say, âacquire firms in the range of $XX revenue, or $YY market capitalization,â or some other relevant factor. Instead of saying, âform an alliance,â you could recommend âform an R&D alliance with Q to leverage this firmâs superior product rollout capabilities against Qâs more advanced technology.â It may take some effort, but this will show that you understand a) what makes the firm strong or weak and b) how it can take advantage of those factors. You could even recommend a firm liquidateâbe specific and say how management should sell it off. Additional Requirements Obviously to do a good strategic analysis of a firm, you will need to compile additional data. The university subscribes to many online journals, and much news is available from sources like AP or Reuters, or even Lexis-Nexis. Keep records of what you find. If you cite from press releases or articles, list them in a reference section. If you use numbers from an investing website, compile the information you use into some easy-to read tables or charts, and put all of this into your exhibit section. Try not to include things in the exhibits for the sake of taking up spaceâpredigest the useful knowledge for your audience so that they can quickly spot what is important. Finally, you should be thinking critically about the firm in this analysis. I donât have to agree with your conclusions or recommendations, if you argue them convincingly. I am looking to see that you understand the process for completing this assignment. Once you understand the logical framework to follow, good answers come with practice. Additional Written Evaluation Guidelines. Excellent analyses âtell a storyâ about a firmâs strategies and describe the fundamental economics of a firmâs strategy, how different parts of the strategy are related, and the longer-term objectives of a given strategy. It is important that each major point in the arguments to be justified with reference to critical facts in your research, and appropriate ideas and concepts from lectures and the readings be seamlessly incorporated into the discussion. Mediocre analyses demonstrate few of these attributes. Instead of âtelling a storyâ about a firmâs corporate strategies, these analyses simply repeat the facts and assertions contained in the materials you gather. Critical facts about the company are ignored, or not integrated into the paper. For example, a mediocre analysis will often include a summary and cursory discussion of a firmâs profit and loss statement and its balance sheet, but will fail to discuss the strategic implications of these analyses. The author(s) of these analyses often seem more interested in making sure that every theory or model mentioned by the professor or in the book is mentioned in the report than making sure that the report tells an integrated story about a firmâs strategy. Often, the different parts of these mediocre analyses are not linked–almost as if different people wrote different sections, but no one took the time to bring these sections together or to discuss the implications of each section for other sections. These analyses rarely generate any counter-intuitive or surprising analyses or recommendations. At the end of reading or listening to these analyses, the reader/listener is only convinced that, in fact, members of the group read the case. The reader is not convinced about the wisdom of any final recommendations. Good writing is paramount to telling an excellent âstoryâ. Give yourself enough time before your deadline to edit your writing to make it clear, concise, direct, cohesive, and correct in grammar, spelling and punctuation. A good guidebook on writing well is The Elements of Style by Strunk and White

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