Industry Classification

The first part of this section is defining the industry that “your company” fits into

and is an important macro identification. A valid test of the industry definition is

the answer to the question “with whom does your company compete?” Be careful

that the definition is not too narrow. For instance in the finance industry, Charles

Schwab is a discount broker and they obviously compete with other discount

brokers like Quick and Reilly and Fidelity. However, they also compete against full

service brokers and deep discounters.

There is also a risk of defining the industry too broadly. For instance, total retailing

in the U.S. is over $2 trillion a year. This includes everything sold to a consumer–

groceries, automobiles, fast food, clothing, etc. There are sub-sections to the retail

industry and these provide a better definition since they are consistent with the

criteria cited above regarding which companies compete against in the market.

Hence, it would be incorrect to identify your company as part of the hospitality

industry.

Explain the structure of the industry and identify the dominant companies. Who are

the current players, their products, their strengths and weaknesses? A chart (which

is located in the Appendix of your paper NOT within the body) showing the relative

size of dominant companies compared to your analysis company is often a good

idea.

Size and growth

Again, you are not looking at the “hospitality” but the subset of that industry to

which your company belongs.

Financial performance in this section deals with the industry and not your specific

analysis company. How has the industry done in recent years and what are the

projections for the future. The Value Line publication analysis is a good source for

this type of information as are trade publications that are devoted to the specific

industry. This is another opportunity to use a chart to show financial performance

of the industry over multiple years. Do not deal with quarters but focus on annual

performance.

Government regulations

Again, looking at the industry what are the important government regulations (if

any) that the industry is being forced to examine. Again, NOT the hospitality

industry.

3-3.5 pages