BUSI 4940.

002, Spring 2017

Final Exam
Assignment Coverage: SBI 1A, 1B & 2A (Industry, Firm, and Strategic
Gap Analysis)

Industry: TBA on 4/30/17

Firm: TBA on 4/30/17

Please note the following:

The final exam is worth 200 points. Students will submit their analysis
to the appropriate Turnitin Assignment link (in corresponding folder) by
3:30pm on Monday, May 8th.

A suggested template for your report is included below as reference.

Individuals are expected to work independently on this exam and

address the analysis to the leadership team of the focal company.

The report should be 6-7 typed, single spaced pages of content

(excluding title pages, tables of contents, tables, figures, exhibits,
references, etc.)

Each report must, (a) demonstrate a command and understanding of

the issues involved in the assignment and their interrelationships, and
your ability to systematically apply the Strategic Business Integration
Process, (b) use sound logic and well thought through justifications, (c)
display an appropriate use of graphs, charts and tables to support your
points, and (d) cite appropriately.

The grading rubric for your report is included below.

Report Structure

Beyond the content itself, your report should include the following (outside of
page limit) to make it a professional presentation:
A title page
An executive summary (not more than one page)

1
 A table of contents
A table of figures
A reference list

Then proceed to the content of the report itself . . .

2
 SBI 1A: ANALYZING THE ENVIRONMENT
Your final product should:
1. Offer an overview of the industry as a whole (e.g., size of industry overall,
growth rate, number and size of competitors, etc.)
2. Identify forces in the environment
o Evaluate the various forces in the broader environment (e.g., PEST
Analysis) and then select the top3 forces.
o Evaluate the various forces in the competitive environment (e.g., 5-
Forces Analysis) and then select the top3 forces.
3. Use the information collected on environmental forces to determine the
most significant
o Drivers of Change
o Key Survival Factors
4. Arrive at a conclusion of how attractive the industry is today and how
attractive it might be in 5 years.

Steps and questions to consider:

1. DATA COLLECTION

Use the theory and tools presented in the class, book, and supplemental
readings to gather information about the environment that you believe
will be useful to the analysis. You may use frameworks and tools like
P.E.S.T., Five-Forces Analysis and others to help structure your
exploration and the collection of key pieces of information.
Document the sources that you surveyed to collect the information so
that you can defend your analysis. Also, provide details on the approach
used to gather information and the information that was gathered.
2. ORGANIZATION AND ANALYSIS OF DATA

2.1 Assess the influence of forces in the broad environment

Use techniques taught in class (e.g., the P.E.S.T analysis) to evaluate

how forces in the broad environment drive competition in this industry.
Your investigation will generate several such unique forces in the broad
environment. List these forces, categorize the impact (High, medium, or
low) and then identify the top three forces on firms in this industry (with
justification and explanation).

2.2 Assess the influence of forces in the competitive

environment

Use techniques taught in class (e.g., the 5-forces analysis) to evaluate

how competitive forces drive competition in this industry. Your
investigation will generate several such unique forces in the industry.

3
 List these forces, categorize the impact (high, medium, or low) and then
identify the top three forces on firms in this industry (with justification and
explanation).

2.3 Determine the Drivers of Change and Key Survival Factors

for the Industry
Use the information generated in the previous steps to help
determine the Drivers of Change and Key Survival Factors for this industry.
Be sure to rigorously demonstrate how this determination follows from
your PEST and 5-Forces analyses i.e., the drivers and KSF must be
derived from the information presented up to this point rather than
coming out of the blue.
1. What are the most significant Drivers of change in this industry?
Justify your selection (why these and not others?). Note: Some of
the significant drivers could have a positive impact on
competition in the industry. Others could have a negative impact on
competition in the industry.

2. What are the most significant Key Survival Factors that must be
addressed by every firm in this industry? Justify your selection (why
these and not others?). Note: Some of the significant drivers
could have a positive impact on competition in the industry. Others
could have a negative impact on competition in the industry.

3. CONCLUSIONS AND RECOMMENDATIONS

The analyses conducted in the Data Collection and Organization and

Analysis of Data sections provide you with a wealth of information,
including several Drivers of Change, and Key Survival Factors in the
industry. Please synthesize the information and then answer the
following:
1. Overall, how attractive is this industry today? Areas to address in
this regard might include such things as (1) the intensity of
competition, (2) average profitability of firms in this industry, (3)
capital intensity of firms in the industry, (4) Growth potential,
volatility, risk etc. for players in the industry. Be sure to ground
your conclusions in information from the analysis above.

2. Given your analysis in the previous section, speculate on what the

industry is likely to look like 5 years from now? That is, what will
the industry look like 5 years from now in terms of its average
profitability, the number and size of firms in the industry, its sales
growth, the supply-demand nexus, the likely nature of the key
survival factors, etc. Be sure to contrast major expected changes
with the conditions as they exist today, and to ground your
predictions in the information from the analysis above.
4
5
 Part 1-B: ASSESS THE CURRENT STATUS OF THE
FIRM
Your final product should:
ASSESS THE CURRENT STATUS OF THE FIRM
Identify the current mission of the firm
Identify the current vision of the firm
Identify the current strategy of the firm (i.e., the goals, product focus,
market focus and value proposition)

ASSESS FIRM PERFORMANCE

Discuss the current performance of the firm and benchmark it against the
industry and competitors, as well the firms own goals.
Identify the most appropriate performance measures that should be used
for this firm (and for the industry) on each of the performance dimensions.
Provide your arguments and conclusions on:
o The financial performance and profitability of the firm
o The market performance of the firm
o The organizational health of the firm
o The overall performance of the firm (position on 2x2 performance
matrix)

ASSESS CURRENT ORGANIZATIONAL CAPABILITIES

Identify current organizational capabilities by type:
o Customer capabilities
o Innovation capabilities
o Operational capabilities
Provide details on how the firm has used the following components in
each capability
o Management Preferences
o Resources
o Organizing processes
Draw conclusions about the top 2-3 business capabilities of the firm.

Steps and questions to consider:

ASSESS THE CURRENT STRATEGY OF THE FIRM
1. What is the mission of the firm?
2. What is the vision of the firm?
3. What is the strategy of the firm?

6
 4. What are the goals of the firm?
5. What is the Product and Market Focus of the firm?
6. What is the firms Value Proposition?

ASSESS FIRM PERFORMANCE

1. DATA COLLECTION
Begin by collecting as much information as possible regarding both the
firm and industry performance. Be sure to collect data in each of the
areas of performance. Information on the company will generally come
from the either case material (if provided) or from public filings.
Information on the industry should come from a variety of sources,
including industry financial information, industry analysis publications,
trade associations, and more. Remember that for the industry you are
trying to get a sense in each of the performance areas of what the
average levels are as well as what the best firms are able to achieve.
The wider you cast your net, the better the ideas you are likely to
come up with.

Data should be collected on both the firm and the industry in

each of these areas:
Operating Performance:
o Financial Performance
Financial Position
Profitability
o Market Performance
Organizational Health

2. ORGANIZATION AND ANALYSIS OF DATA

You now need to begin pulling together your data from the
above. Remember that you will need to:
Identify the most appropriate measures for this firm on each of
the performance dimensions. Remember that each performance
area can have multiple measures. Note that you must justify
your choice of measures (why are these important in this
industry?).
Make sure that you have information on industry benchmarks.
Remember that you must provide details on where you found the
statistics and/or information you are using.
Where possible, report firm performance benchmarks (e.g., firm
goals either explicitly or implicitly stated in the case, past firm
performance, etc.).

3. CONCLUSIONS AND RECOMMENDATIONS

7
 Compare information organized above and arrive at specific
conclusions about the firms performance (Use the methodology taught
in class to complete this analysis)
a. Provide your arguments and conclusions below. Be sure to
explain how/why you came to each conclusion.
The financial performance and profitability of the firm is . . . .
The market performance of the firm is . . . .
The organizational health of the firm is . . . .
b. Given the above, provide an overall assessment of the firms
performance. This should include:
Identifying where the firm should be placed in the performance
matrix
Discussing trends in performance (e.g., stable? moving from
good to poor?, etc.)
Based on this assessment, what is the relative urgency of change
for the firm?

ASSESS CURRENT ORGANIZATIONAL CAPABILITIES

1. DATA COLLECTION, ORGANIZATION AND ANALYSIS

Step 1
Use the information collected in the prior section to identify multiple
current organizational capabilities that the firm currently possesses by type
Operational Capabilities, Customer Capabilities, and Innovation
Capabilities. These capabilities tend to be important for the firm in
remaining competitive in its industry and/or in delivering its value
proposition.

Step 2
Theory informs us that Organizational capabilities result from a
purposeful combination of a firms resources and organizing processes, and
that they are influenced by the desires and preferences of managers. To
understand this you should:

a. MANAGEMENT PREFERENCES
Identify as much as you can about the preferences of key managers
and how that has enabled or constrained the capabilities you
identified within the firm. Gather information on recent actions by
management that could highlight the underlying management
preference that drove those actions. Areas to gather data might be:
the management discussion section of the 10K, the Annual Report
summary of strategic decisions, public statements by leadership of
the firm, industry analysts and public press commentary, and
transcripts of annual meetings.

8
 b. FIRM RESOURCES
Identify as much as you can about the resources of the firm that are
used in the capabilities identified in Step 1. Using ideas covered in
class consider both tangible and intangible resources in a variety of
areas within the firm.

c. ORGANIZING PROCESSES
The Organizing Processes piece of your analysis is focused on
examining and interpreting indicators of how the firm organizes its
assets in ways that create specific capabilities for the firm and,
ultimately, value for its customers. The organizing that occurs, in
turn, results from three organizational components: a) organization
structure, b) management processes, and c) leadership behavior.
Identify as much as you can about how the firm puts its resources into
action within broader capabilities.

Step 3
Organize your identified firm capabilities and the underlying components
that are necessary for them to be effective. On their own, resources,
management preferences and organization are simply pieces of the puzzle.
Put them together correctly, however, and a firm can generate powerful
organizational capabilities.

2. CONCLUSIONS AND RECOMMENDATIONS

Given your analysis above, you are now in a position to arrive at
conclusions regarding the most significant organizational capabilities. You
need to determine which are necessary to deliver the value position of the
current strategy and which capabilities offer the firm a competitive
advantage over competitors in the industry. In other words, you need to
evaluate each of the current organizational capabilities in light of the VRIO
criteria. Your intent should be to identify the 2 or 3 most important current
organizational capabilities that support the value proposition of the firm.
Justify your answer.

9
 SBI 2A:

CONDUCT A STRATEGIC GAP ANALYSIS AND

IDENTIFY MAJOR ISSUES

ASSESS OVERALL FIT AND IDENTIFY KEY

ISSUES/PROBLEMS:
(ENVIRONMENT STRATEGY ORG. CAPABILITIES)

Your final product should:

Use information gleaned from your analysis of Part1 of the SBI process to:
Assess environmental opportunities and threats in the context of the firms
current strategy (i.e., compare the drivers of change and key survival factors of
the environment with the strategy components of the firm)
Assess organizational capabilities in the context of the firms current strategy
(i.e., compare the firms capabilities with its strategy components)
Assess whether the gaps identified above explain the lapses in firm performance
found on one or more of the performance dimensions: financial performance,
market performance and organizational health?

The outcome of your analysis should include:

The identification of most significant strategic gaps (issues) facing the firm
A forecast of future performance of the firm if it continues using its current
strategy (use the commonsize technique, appropriately adjusted to account for
the identified strategic gaps, to make these projections)

Steps and questions to consider:

Having worked through each of the individual components of the criterion of
consistency framework, it is now time to put the various pieces together to assess
the overall fit between the current strategy and both the external environment and
the org. capabilities (built on resources, management preferences and
organization). In doing so, you should also be able to identify the key
issues/problems that the firm is facing. If you have done your analysis correctly, the
key issues/problems that surface should provide evidence of and an explanation for
the current performance of the firm.
The process is the same as that used in each of the previous steps Collect all the
needed information (Data Collection), put the information into a form that can be
reviewed and studied (Analysis and Organization), and then synthesize and
integrate what you have learned so that you can make good decisions (Conclusions

10
and Recommendations). The difference is the levels of analysis. In previous steps
you looked at each component of the model. Now, you are going to bring the
information and conclusions from previous steps together to gain an overall
understanding of the firms position.

1. DATA COLLECTION
As noted, you have collected the data through your work on each of the previous
steps. What is needed now is to simply bring it all together in one place. Review
your conclusions from the previous steps on firm performance, environment,
strategy, and org. capabilities and jot-down the important information here.
Note that you can use short-hand notes here, so long as you remember the
richness of your ideas in each section and refer back to those when you are
analyzing and making decisions on the information below.
THE ENVIRONMENT/INDUSTRY
1. Drivers of change
2. Key survival factors
3. Product/Market and Value Proposition possibilities

STRATEGY OF THE FIRM

1. Goals
2. Product focus and market focus
3. Value proposition
4. Core Activities

ORGANIZATIONAL CAPABILITIES OF THE FIRM

1. ___________________
2. ___________________
3. ___________________

PERFORMANCE OF THE FIRM

1. Financial Performance
2. Market Performance
3. Organizational Health

2. ORGANIZATION AND ANALYSIS

a. The Strategy Environment Link
Compare the drivers of change and key survival factors of the environment
with the strategy components of the firm. Identify:
Where, if at all, there is a good fit between environmental demands
and the firms strategy. That is, identify how the strategy does a good
job of addressing/responding to specific drivers and/or KSFs
Where, if at all, there is a misfit between the environmental demands
and the firms strategy. That is, identify how the strategy does a poor
job of addressing/responding to specific drivers and/or KSFs

11
 Where there are potential future misfits (given current industry
trends). That is, identify where the strategy is likely to fall short of
addressing/responding to specific drivers and/or KSFs in the future

b. The Strategy Organizational Capabilities Link

Now look inside the firm and compare the package of Org. Capabilities
created by Resources, Management Preferences, and Organization with the
strategy components of the firm. Identify:
Where, if at all, there is a good fit between the org. capabilities of the
firm and the firms strategy. That is, show how the capabilities support
specific aspects (value proposition, goals, etc.) of the firms strategy
Where, if at all, there is a misfit between the org. capabilities of the
firm and the firms strategy. That is, show how the capabilities fail to
support specific aspects (value proposition, goals, etc.) of the firms
strategy
Where there are potential future misfits (given current trends within
the firm). That is, show where/how the capabilities may fail to support
specific aspects (value proposition, goals, etc.) of the firms strategy in
the future
c. Firm Performance and Strategic Gaps
Theory and empirical research inform us that firm performance is closely
related to the firms position vis--vis the criterion of consistency. That is, the
better the fit among the three components of in the criterion of consistency
framework, the better is the firms performance.
Review the results of your fit analysis and attempt to document how the
fits/misfits identified in your analysis may explain the achievements or lapses
in firm performance on one or more of the three dimensions: financial
performance, market performance and organizational health
3. CONCLUSIONS AND RECOMMENDATIONS
Given the above, answer the following questions:
a. Overall FIT and Symptoms: Taken together, how do you see the overall
alignment among the elements of the criterion of consistency? That is, is
there a good fit, an ok but weakening fit, a poor fit, a really bad fit, etc.? Be
sure to explain WHY you believe this is the case. Next, refer back to
your assessment of firm performance and show how this fit (or lack of fit) is
reflected in the performance of the firm. That is, can the symptoms of
underlying problems (e.g., decreasing sales or market share, poor
profitability, disgruntled employees, etc.) identified in your analysis of the
firms performance be traced to specific strategic fit problems?

b. Selecting the Most Significant Issues Facing the Firm:

Based on the fit/misfit identified above, highlight the areas that you see as
the biggest issues/problems. That intent here is to move beyond the
symptoms identified through performance and other previous analysis above

12
to reveal the underlying causes that the firm must address. That is, what is
causing the symptoms (e.g., decreasing sales or shrinking market share, poor
profitability, disgruntled employees, etc.) that were identified above? Where
possible, these causes should be expressed in terms of the alignment (or
misalignment) between specific strategy components and specific aspects of
the environment and/or org. capabilities (e.g., the product/market focus is no
longer appropriate for the environmental conditions of because; the org.
capabilities do not support the value proposition because ..., etc.).

13