5-Force Analysis- Conclusion

5-Force Analysis- Conclusion

Five-Force Analysis: Table and Conclusion

The firms that we conduct analysis on are public firms because we can have the information available for the project.  Privately owned companies do not reveal their strategic data such as financial and accounting information as well as their strategic intent for the next three years.

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For most of the public owned firms, they do not operate in one business and often are diversified in multiple businesses (unit).  If we analyze one business without considering others, we do not see the big picture since all the businesses are inter-related and the decision or recommendations are made for the whole well-being of the corporate.

The table for the 5-force analysis is to put all the businesses (firms or units) in different industries and have a better idea of the general situation of the focal firm that we are analyzing.  All the faculty members in the business school are involved in proposing firms for our use.  We are working to get a list of firms for the next three years so that both professors and students will know what we will do for the MBA Conference.  We try very hard to locate firms that have minimum business units operating in different industries.  If the business units are functioning in the same industry, you do not need to provide duplicate information.  You can decide how many industries according to the real situation of the focal firm.

In summary, the table is designed to get information for different industries where the focal has operations (business units).  The function of the table is the quick visual aid, but it does not replace the written analysis.  A table (showing data), no matter how good it may be, will not get many points without detailed analysis to make the readers understand what you want to communicate.

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In the same section, the most fatal error we often see is that people conduct analysis on five forces without providing “So What?”,  the conclusion.  If you fail to provide the summary for 5-force analysis with an industry attractiveness conclusion in terms of the industry profitability potential, you will lose most the credits associated with that section because you do not know why (the purpose) you need to conduct 5-force analysis.

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