April 1, 2024

Your first course project gives you an opportunity to demonstrate your ability to utilize information from industry and scholarly sources to inform problem solving and decision making.

Project 1

Part 1

Scenario

You are the sales department manager for a U.S.-based company that builds engines for the automotive manufacturing industry. Your company is considering diversifying into other business opportunities where your motors can be sold in order to bolster the company’s portfolio and increase revenue. Based on your knowledge of the national sales landscape, your manager would like you to conduct preliminary research and prepare a presentation with your recommendation for opportunity in a new industry that will allow for this diversification through a new sales division and increased sales.

You have been asked to make your presentation at the next stakeholder meeting, where you will address internal stakeholders from across the company as well as external stakeholders such as customers, investors, and suppliers. As a preliminary step in developing this presentation, your manager would like to see an executive summary of your research findings and evaluate your decision modeling.

In Module One, you chose an industry (Construction equipment, specifically, generators and light machinery like landscaping equipment) that you think would provide an opportunity for diversifying your company. Now, using industry-specific and scholarly resources to inform your decision, you will research both the automotive industry and the new industry you chose to create an executive summary of your findings.

Part 1: Define the Current Industry

For this part of the project, you will focus on defining and describing the automotive manufacturing industry. This is the industry that currently buys the motors your company builds.

You will begin by defining the problem that your company is trying to solve through diversification. Then you will use research to provide a broad overview of the U.S. automotive industry and describe the current trends in the automotive market.

Part 2: Research the New Industry

For the next part of the project, you will focus on describing and analyzing the industry that you believe provides an opportunity for diversifying your company. This is the new industry that could potentially buy motors from your company.

Using your research, you will provide a broad description of the new industry you’ve identified, summarize its current trends, and then conduct a Porter’s Five Forces analysis of it.

Part 3: Compare the Two Industries

For the final part of the project, you will focus on comparing the new industry you’ve identified for diversification with the current one, the automotive manufacturing industry. To do this comparison, you will use the Porter’s Five Forces framework to analyze the automotive industry. Then you will compare the two industries and summarize your findings.

Now that you have a better understanding of what you need to do for your project, you’re ready to get started. On the next page, you’ll define the problem you are trying to solve through diversification, conduct research on the automotive industry, and provide a broad description of the automotive industry.

Part 1

Define the Problem

Begin Part 1 of your executive summary for Project 1

To begin the executive summary for your manager, you will draft an introduction. Your introduction should describe the problem you are trying to solve for your company and the types of qualitative and quantitative data you will need to review in order to recommend a new industry for diversification.

<Describe why your company needs to diversify. What problem will diversifying the company solve? What kinds of quantitative and qualitative data will you target in your research on the current auto industry and the new industry?

Conduct Research on the Current Industry

Gather information about the U.S. automotive manufacturing industry.

Now that you’ve defined the problem you will solve by diversifying your company, you’ll need to conduct research on the U.S. automotive industry. The data you gather in your research will help you to complete your executive summary by giving you the information you need in order to make informed business decisions.

These project resources include the following databases and websites that will be helpful in researching both the automotive industry and the new industry you recommend for diversifying your company.

 IBISWorld provides industry reports with qualitative and quantitative information on the automotive industry and a wide range of other industries that you may choose to investigate.

 MarketLine industry reports are useful for finding information such as an industry’s market value, which is related to its net worth.

 The National Automobile Dealers Association tracks a range of industry-related statistics. Its annual and mid-year reports include total automobile sales by state.

 The Alliance for Automotive Innovation compiles industry data such as auto sales by state and the number of registered vehicles by body type and powertrain. From the Resources menu on their website, review the Economic Insights and Market Reports options.

What Data Am I Looking For?

As you conduct your research, you’ll want to find sources that can provide accurate information about the total value of the automotive industry as well as information about sales. You can narrow your search and provide more specific information in your description by looking for information about the following:

 sales by region,

 sales by fuel type (e.g., electric, hybrid, gas),

 sales by body type of the vehicle (e.g., SUVs, trucks, sedans), and

 the total value of the industry.

You’ll also want to look for trends in the data as you conduct your research, since they will help inform your decision making. You can do this by asking yourself what kinds of vehicles are being purchased more than others. You should be able to find data on the following:

 trends in the types of motors consumers are wanting in their cars (e.g., electric, gas),

 trends in customer demands like vehicle color, style, and extra features,

 trends in fuel efficiency that customers are demanding, and

 trends in the body types of vehicles sold (e.g., SUVs, trucks, sedans, motorcycles).

Tip: Different sources might focus on different segments of the industry. For example, a report that includes information on new car sales may not address sales of motorcycles, new hybrid or electric vehicles, or SUVs and other light trucks, all of which are separate categories. Similarly, automotive engines are sometimes classified separately from the larger category of engines and turbines, which include diesel engines. Keep track of the market segment covered by each source that you find useful.

Take Good Notes

In your final draft, you’ll need to list your sources in APA Style, so be sure to collect all the information you need for proper citations as you are doing your research.

Describe the Current Automotive Industry

Continue drafting the first part of Project One.

Now that you’ve conducted your research, you’re ready to write a broad description of the current state of the U.S. automotive manufacturing industry for your executive summary. Make sure to include the following information:

 the total value of the industry

 sales by region

 sales by fuel and motor type (electric, hybrid, gas, diesel)

 sales by body types of vehicles sold (e.g., SUVs, trucks, sedans)

 any other relevant data that will help your manager understand the current automotive industry

Use this writing template to describe the current U.S. automotive industry:

<Using information from your research, provide a broad description of the U.S. automotive industry. Be sure to include information related to each item listed above.

Describe Current Trends for the Automotive Industry

Continue drafting the first part of Project One.

Now that you’ve defined the problem you want to solve and described the automotive industry, it’s time to describe the current trends impacting that industry. You can illustrate these trends by either (1) providing data such as how sales for different types of cars have changed over time, (2) quoting forecasts by experts, or (3) discussing the results of customer surveys. Be sure to include the following information:

 trends in products, such as different types of motors

 trends in the body types of vehicles sold (SUVs, trucks, sedans)

 trends in customer demands relating to cost, safety features, vehicle color, etc.

 any other data that will help your manager understand important trends in the automotive market

Use the writing template to describe current trends in the U.S. automotive industry.

<Add resources for the previous section here:

Part 2

On the previous page, you began work on your executive summary by describing the automotive industry and the trends impacting it. On this page, you will shift your focus to the industry that you believe provides an opportunity for diversifying your company.

Conduct Research on the New Industry

Gather information about the industry you are targeting to diversify your company.

In Module One, you selected a new industry that your company could potentially sell into. Before you get started on your research, make sure the industry you previously selected is still the one you want to recommend for diversifying your company. If you want to make changes, you can do so in the template below.

Here’s the new industry you decided would be a good fit for your company. Make edits if you need to: Construction Equipment.

To conduct your research on this new industry, you’ll begin with some of the same project resources you used to research the auto industry.

Use the following resources:

 IBISWorld provides industry reports with qualitative and quantitative information on a wide range of industries.

 MarketLine industry reports are useful for finding information such as an industry’s market value, which is related to its net worth.

What Data Am I Looking For?

As you conduct your research on the new industry, you will want to find information that is similar to the data you collected about the automotive industry. Specifically, you will be searching for accurate information about the value of the new industry, its growth potential, the current market trends affecting it, and the other companies currently selling motors to this industry. Be sure to look for the following types of information:

 Sales data. Just as you did for your research on the automotive industry, you will need to find sales data by region and product type for the new industry. You will also need to note how sales have changed over the past few years and find information about the overall value of the industry.

 Growth considerations. To assess the overall attractiveness of the new industry, you will want to know about any factors affecting the industry’s growth. This requires you to identify conditions that might increase or decrease demand for the product created by this industry.

 Competitive factors. You also need to assess the competitive landscape by identifying the factors that have allowed competitors to be successful in this industry so far. This includes finding out the number of companies that are well established in the industry, the level of expertise necessary for success in the industry, and any regulations that make it hard to enter the industry.

 Current market trends. Look for trends such as products or services that have led to increased sales over recent years. Also, look for the types of customer demands surrounding the industry’s products.

Gathering these types of information will help you provide an overview of the opportunity the new industry presents for your company.

Describe the New Industry

Begin drafting the second part of Project One by providing an overview of the new industry.

Now that you’ve conducted your research, you’re ready to write a broad description of the new industry you believe provides an opportunity for diversifying your company. As you write your overview of this industry, consider addressing the topics and questions listed below:

 Sales for the industry. What have sales been like for the new industry? How do sales vary based on state, geographic region, and type of product?

 Value of the industry. How is the industry’s value currently trending?

 Overall attractiveness of the industry. Is this a growing industry? Is this an industry that has growth potential? What outside factors are affecting industry growth? What are the areas of expected growth in this industry?

 Competition within the industry. Who are the major competitors? What factors have allowed competitors to be successful in this industry?

<Provide a broad description of the new industry (Construction equipment) that includes information about its sales, overall value, growth potential, and current competitors.

Describe Current Trends for the New Industry

Continue drafting the second part of Project One by describing current market trends for the new industry.

Next, you will describe the current market trends affecting or expected to affect the new industry. In your description, make sure to address the following questions:

 What products or services are trending for this industry?

 How are customer demands trending?

 How has the industry changed over time, and how is it likely to change in the next few years?

The description of the industry trends should support your suggestion that your company diversify into this new industry.

<Describe the current market trends impacting the new industry (Construction equipment). Be sure to include information related to each question posed above.

<List resources for this previous section here:

Part 2, continued

Now that you have conducted research and provided a description of the new industry and the market trends impacting it, you are ready to complete Part 2 by conducting a Porter’s Five Forces analysis.

Perform a Porter’s Five Forces Analysis on the New Industry

Analyze the industry you’ve selected for diversifying your company using the Porter’s Five Forces framework.

To complete Part 2 of your project, you will utilize the Porter’s Five Forces framework to analyze the new industry and inform your decision to diversify. The analytical framework will help you develop insight into the potential success of moving into this new industry. You may need to find additional sources to conduct the Porter’s Five Forces analysis.

1. Analyze Rivalry Among Existing Competitors

Intense competition for market share can limit a company’s profits when diversifying into a new industry. Consider the following questions as you describe the rivalry in the market:

 How many competitors are there in the industry?

 What is each competitor’s position? How much of the market share has each one captured?

 Do companies compete intensely in this industry? If so, do they engage in rivalry and lower prices to gain market share?

 Do companies compete to provide additional services or constant innovation?

<Describe the rivalry among existing competitors in the new industry you’ve identified (Construction equipment).

2. Analyze Threats of New Entrants to the Market

If other companies can easily enter the industry, your company’s position can be ruined quickly. Analyze whether it is easy or hard to enter the market and explain your findings in the template below. Be sure to answer the following questions:

 What barriers do companies face when entering the market?

 Are there many regulations or legal barriers?

 Are there high costs associated with gaining the expertise necessary to produce goods or provide services for the market?

 How many other companies are just as prepared or better prepared than yours to enter this industry?

<Describe the threats of new entrants to the market in the new industry (Construction equipment).

3. Analyze the Bargaining Power of Suppliers

Evaluate how much power the suppliers of raw materials might have to drive up prices in the new industry. Be sure to answer the following questions:

 Which companies provide the raw materials for the product?

 Are there many suppliers or only a few?

 Does rivalry between the suppliers drive down the price of some of the raw materials?

 Is a virtual monopoly on some of the raw materials by a single supplier likely to drive up the price of raw materials?

 Overall, how will the bargaining power of suppliers affect the cost and ease of obtaining the materials necessary to enter the new industry?

<Describe the bargaining power of suppliers in the new industry (Construction equipment).

4. Analyze the Threat of Substitute Products

Assess the threat of substitute products in the new industry. Be sure to answer the following questions:

 Are other products emerging in this industry that might compete with existing products?

 What are these possible competing products?

 Are these possible competing products cheaper to produce than the industry’s current products?

 Are these possible competing products better in other ways?

 Could these possible competing products force your company out of the market?

<Describe the threat of substitute products in the new industry (Construction equipment).

5. Analyze the Bargaining Power of Buyers

The fewer the buyers, the more pressure they may be able to put on your company to sell products and services for less. Consider the following questions as you evaluate the bargaining power of buyers:

 How many different companies or consumer groups buy the products sold in this new industry?

 If there are only a few customers, would they be able to push to lower the price of the products?

 If there are many customers, are there any organizations that enable the customers to band together and apply pressure to reduce the costs of your products?

<Describe the bargaining power of buyers in the new industry (Construction equipment).

Summarize Your Analysis

To complete your Porter’s Five Forces analysis, you’ll need to summarize each of the five forces as they relate to the industry you chose. Your summaries will be included in a chart like the one below when you download Project One as a Word document.

<Summarize each of the five forces related to the new industry (Construction equipment) in just one sentence per force. Be sure to assess the effect of each force as low, medium, or high in your summary. These summaries will be pulled into a chart like the one shown above when you download Project One.

Porter’s Five Forces

Rivalry Among Existing Competitors

Summary:

Threats of New Entrants

Summary:

Bargaining Power of Suppliers

Summary:

Threat of Substitute Products

Summary:

Bargaining Power of Suppliers

Summary:

<Porter’s Five Forces Resources>

Part 3

In order to make your recommendation about a new industry for diversifying your company, you will need to compare it to the automotive industry, for which your company currently manufactures engines. And to make this comparison, you will first need to conduct a Porter’s Five Forces analysis of the automotive manufacturing industry.

Perform a Porter’s Five Forces Analysis on the Automotive Industry

Analyze your company’s current industry, the automotive manufacturing industry, using the Porter’s Five Forces framework.

As you did on the previous page, you will begin your Porter’s Five Forces analysis by describing each of the forces. This time, you will be focusing on the forces as they relate to the auto industry.

1. Analyze Rivalry Among Existing Competitors

Intense competition for market share can limit a company’s profits when diversifying into a new industry. Consider the following questions as you describe the rivalry in your company’s existing industry.

 How many competitors currently supply engines for the automotive manufacturing industry?

 What is each competitor’s position? How much of the market share has each one captured?

 Do these companies compete intensely in the automotive industry? If so, do they engage in rivalry and lower prices to gain market share?

 Do companies compete to provide additional services or constant innovation?

<Describe the rivalry among your company’s existing competitors (supplying engines to the automotive manufacturing industry).

2. Analyze Threats of New Entrants to the Market

Analyze whether it is easy or hard for new companies to begin supplying engines to the automotive manufacturing industry, and explain your findings in the template below. Be sure to consider the following questions:

 What barriers do companies face when beginning to supply engines to the automotive manufacturing industry?

 Are there many regulations or legal barriers?

 Are there high costs associated with gaining the expertise necessary to produce goods or provide services for the market?

 How many companies are prepared to enter the automotive industry?

< Describe the threats of new entrants to the automotive manufacturing industry.

3. Analyze the Bargaining Power of Suppliers

Evaluate how much power the suppliers of raw materials might have to drive up prices. Be sure to answer the following questions:

 Which companies provide the raw materials for your product?

 Are there many suppliers, or only a few?

 Does rivalry between the suppliers drive down the price of some of the raw materials?

 Is a virtual monopoly on some of the raw materials by a single supplier likely to drive up the price of raw materials?

 Overall, how will the bargaining power of suppliers affect the cost and ease of obtaining the materials necessary to sell in the automotive industry?

<Describe the bargaining power of suppliers in the automotive manufacturing industry.

4. Analyze the Threat of Substitute Products

Assess the threat of substitute products in the auto industry. Be sure to answer the following questions:

 Are other products emerging in this industry that might compete with existing products?

 What are these possible competing products?

 Are these possible competing products cheaper to produce than the industry’s current products?

 Are these possible competing products better in other ways?

 Could these possible competing products force your company out of the market?

<Describe the threat of substitute products in the automotive manufacturing industry.

5. Analyze the Bargaining Power of Buyers

The fewer the buyers, the more pressure they may be able to put on your company to sell products and services for less. Consider these questions as you evaluate the bargaining power of buyers:

 How many different companies or consumer groups buy the engines your company currently builds for the automotive manufacturing industry?

 If there are only a few customers, are they able to push to lower the price of the products?

 If there are many customers, are there any organizations that enable the customers to band together and apply pressure to reduce the costs of your products?

<Describe the bargaining power of buyers in the automotive manufacturing industry.

Summarize Your Analysis

Summarize each of the five forces you described on this page in just one sentence per force. Be sure to assess the effect of each force as low, medium, or high in your summary. These summaries will be pulled into a chart like the one above when you download Project One.

Porter’s Five Forces

Rivalry Among Existing Competitors

Summary:

Threats of New Entrants

Summary:

Bargaining Power of Suppliers

Summary:

Threat of Substitute Products

Summary:

Bargaining Power of Suppliers

Summary:

<Porter’s Five Forces Resources>

Part 3

Now that you’ve completed the analyses of the automotive manufacturing industry and the new industry, you are ready to wrap up Part 3 of this project. On this page, you will first explain how the two industries compare to one another. Then you’ll explain how your findings address the problem your company is trying to solve.

Compare the Two Industries

To begin your comparison of the two industries, carefully review the summaries of the analyses you’ve conducted for both industries in the template below. The similarities and differences that you notice will be the basis of your explanation for this part of Part 3.

Porter’s Five Forces

Rivalry Among Existing Competitors