Project on EIC
Analysis & Summary
Lesson 8 : Module 1
SAPM
Lesson goals
To understand the basic models for
analyzing the Industry
To evaluate the learning in this module
EIC Analysis
EIC Analysis is a top-down approach.
Here we evaluate the present status of
economy and understand which industries will
thrive and in those industries which companies
have the potential to grow.
So industry analysis is an important step
requiring focus.
First we will look at the models for industry
analysis and then see how it is practically done
with an example.
Models for Industry Analysis
Five Forces
Four routes to strategic advantage
PESTLIED
BCG Matrix
SWOT Analysis
Five Forces
Given by Michael E
Porter
Professor – Harvard
University
Books - Competitive
Strategy: Techniques for
Analyzing Industries and
Competitors (1980)
The Competitive Advantage
of Nations (1991)
Source: http://hbr.org/2008/01/the-five-competitive-forces-that-shape-
strategy/
Four routes to strategic advantage
Kenichi Ohmae
The Mind of the Strategist",
The End of the Nation State
The Borderless World.
Four routes to strategic advantage
1. Key Factors for success
Resources are allocated where they will
be most effective in relation to the
identified key success factors.
2. Relative Superiority
Competitors’ weaknesses are exploited
using new technology or other strengths
such as an effective sales force.
Four routes to strategic advantage
3. Aggressive Initiative
Direct competition with new business or
new products.
4.Strategic Degrees of Freedom
Embrace innovations in products or
markets where no competition exists.
PESTLIED
While analyzing organizations, the environmental
factors that need to be addressed.
P -Political I -International
E -Economic E -Environmental
S -Social D -Demographic
T -Technological
L -Legal
Applications
PESTLIED is used in analysis and audit.
The model is used as a checklist in the
planning process.
The managers are also forced to consider
the impact of external influences on their
organizations.
BCG Matrix
Large organizations face the challenge of
allocating resources among various
strategic units.
Boston Consulting group developed a
model for managing business units.
BCG Matrix
BCG Matrix Explained
Cow: Market is matured but firm is doing
well. So there are no additional investment
opportunities.
Star: Doing well in a growth market. May
need to invest continuously to capture
market.
Question Mark: Need to invest to grow in a
growing market and future is not certain.
Dog: Market is matured and performance is
not good. May need to close.
SWOT Analysis
A tool that identifies the strengths, weaknesses
opportunities and threats of an organization /
project / industry.
The method is to take the information from an
environmental analysis and separate it into
internal (strengths and weaknesses) and
external issues (opportunities and threats).
SWOT analysis determines what may assist the
firm in accomplishing its objectives, and what
obstacles must be overcome or minimized to
achieve desired results.
Indian Leather & Tanning Industry
Profile 2010
http://italiaindia.com/images/uploads/pdf/le
ather-industry-in-india-2010.pdf
You may visit the site above and read the
complete report on the Leather & tanning
Industry.
SWOT Analysis of the Indian Leather Industry
Strengths
Uniqueness of Leather
Fashion Choice
Fine Quality of Skins
Abundance of Human Resource
Easily Accessible Raw Material
Prevalence of Production Chain from Village
to Fashion
Versatile Bio-Polymer Collagen
Policy Support from the Government
Encouragement by International-
Development Agencies
Weaknesses
Traditional Processing Technology
Dependence on Imported Machines and
Components
Inadequate Internal Demand
Pollution Problem
High Degree of Subjectivity in Quality
Assessment and Grading
Widely Dispersed Units
Insufficient Enterprising Attitude of the Industry
Poor Database
Technology Management and Financial Problems
Opportunities
Incentive from the Government
Advances in Modern Biology, Genetics,
Chemical Engineering, Computers and
Electro polymer Science
Opulence of Synthetic Support Materials
Preference for Indian Leather –The
Goodwill factor
Threats
Environmental Pollution may force closure of
Tanneries unless relocated to a specified
cluster
Liability Aspects of Pollution
High Price of Leather & Leather products
Inelastic Supply of Raw Material
Perpetual Dependence on Western Market
Rising Aggressive Competition from
International Players
Challenges from Synthetics
Module Summary
1. Introduction to Stock Markets
2. Introduction to Security Analysis & Portfolio
Management
3. Portfolio objectives
4. Financial Mathematics
5. Illustrations / Examples
6. Illustrations / Examples
7. Global forces affecting the world economy
8. Summary & Project on EIC analysis
Thank you
