EQUITY MODULE 44

Question 1

44.1 Where does this city in the curriculum?

Answer 1

Question 2

44.1 What steps do we take in order to understand what industry or sub-sector a company operates in?

Do not need to know by heart but need to appreciate the commercial breakdowns

Answer 2

Question 3

44.1 What are some industry classification methods?

Answer 3

Analysts broadly have their own take on this

Question 4

44.1 What is involved in an industry survey?

Answer 4

Question 5

44.1 Characterising industry growth: what is a style box?

Answer 5

Question 6

44.1 What can the HHI do for us here?

Answer 6

can see how concentrated the market is

2,500 is where regulators start to get nervous about concentration

Movements upwards are concerning

Question 7

44.1 Describe the porter’s five forces model:

Answer 7

Showing what the 5 forces are that have the power to squash profits

threat of new entrants - can make barriers to entry (like making your brand really strong)

Question 8

44.1 consider how the model would characterise porters 5 forces acting on the uS retail market:

Answer 8

Question 9

44.1 External influences on industry growth: describe PESTLE analysis:

Answer 9

Question 10

44.1 What three dimensions should an analyst assess a company strategy on?

Answer 10

Question 11

44.1 What did professor Porter say was a good way of being competitive?

Answer 11

Do one thing very well, Eg cost leadership.

Don’t try to do everything

Question 12

44.1 In an industry and competitive analysis, the industry base rate is best described as the:

Answer 12

overall baseline profitability for the industry as a whole

Question 13

44.1 What would be characteristic of a firm choosing to employ a focus-based competitive strategy?

Answer 13

It is often a hybrid strategy, as it may involve elements of both cost leadership and differentiation.

Question 14

44.1 A commercial industry classification system has a hierarchical structure: economic sectors, business sectors, industry groups, industries, and activities. Which classification does this represent?

Answer 14

Refinitiv Business Classification (TRBC).

This is the hierarchical structure for the TRBC classification system: economic sectors, business sectors, industry groups, industries, and activities.