Question

Assume that the environment influences firm profitability. Assume further that under such conditions, then the role of management is to select favorable industries to enter. How does this effect you?

If you think about it, more jobs will be made available in growing industries than in declining ones. More promotions will be available in growing industries than in declining ones. Morale tends to be better under conditions of growth vs. decline. All in all, you are ore than likely to be better off looking for work in healthy industries than in sick ones. A good career search strategy then is to first identify the health of an industry.

1. In this assignment, select an industry where you might want to apply your degree.

2. Ignore industry profitability for a brief moment--why would you want to work in this industry? This is probably 3-4 sentences in length.

3. Now then, conduct a five forces model analysis on the industry (do the one page diagram). Make an assessment of the industry, and gauge its profitability. Remember, this is a paragraph that fleshes out the one page diagram.

4. Which of the five forces effects you most as someone seeking employment in this industry? Next, discuss how easy it will be to get into this industry, and to advance in this industry.

a.    As an example, You may find that an industry that has no barriers to entry will be a poor industry for you to enter. Or it may have barriers that keep you out.

Answer 1

(a) IT services or IT Product or client services.

(b) Benefits of working in IT industry:-

• Payscale, Hikes, and min 30% hikes when switching companies
• Sit and work in AC
• Onsite Opportunities ( Short or Long)
• Team Outings / Team lunch
• Interacting with all Geo's /Client Meetings

(c)

Existing competition:-commoditization,difficult to differentiate based on these service offerings.,differentiation through niche-specialization occurs.

Bargaining power of customers-for conventional IT services, bargaining power of the buyer is large and the possibility of pressure on rates exists.

Bargaining Power of Suppliers: The bargaining power for suppliers is very low and since high-standardization exists, there is little scope of suppliers having any clout. The suppliers consists of IT Infrastructure providers (Servers, computers etc.), Recruitment firms, Office Space Suppliers etc.

Threat of New Entrants: In context of the highly commoditized IT services, there is little threat of new entrants.

Availability of Substitutes: There are no substantial substitutes to IT services apart from Internal IT departments, which have lost clout over the years and are ever thinner in numbers and significance.

(d) Availability of Substitutes: There are no substantial substitutes to IT services apart from Internal IT departments, One argument for internal IT is retaining control over pertinent aspects of business but the argument against would be since the main business of the company is not IT services, it should outsource as much as possible and focus on future growth in core areas. Over time there has been a steady decrease in in-house IT development and maintenance with more and more being outsourced and the internal IT staff has settled into a supervisory (program management) role.