When you want to make comparisons across industries, the most common way is to make use of financial ratios for companies in the respective industries. However, this requires an assumption of similarity in business models or scale of operations.
For a more generic comparison, it could be better to compare the market forces in each respective industry. This is especially when you need to take into account the competitive landscapes of these companies.
Going by the strategic management perspective, the five forces model of Porter (2008) is a standard tool for getting an overview of the key players in an industry. It is a framework which analyzes the attractiveness of an industry by looking at the market forces. We have a detailed guide on how to do industry analysis to get an overview of the attractiveness of a specific industry.
However, what if you wanted to compare one industry to another? This guide takes industry analysis a step further and explains how to compare market forces across multiple industries.
Comparing the attractiveness across multiple industries
To compare the attractive of multiple industries, you would typically repeat the industry analysis for each one separately and try to summarize your research. However, if you were to present these findings only in textual form, it would be difficult to see which factors are more significant in which industries. The comparisons that you make between the industries would also be somewhat difficult for the readers to understand and follow.
Instead, we recommend that you make a visual representation of what you are trying to say. In a way, we are trying you push you towards visualization of your ideas. This is a good skill to have not just in academic writing contexts, but for any career.
We have prepared a file that can help with this. This tool is essentially an interactive table. You can enter values on a scale for each of the five forces for different industries. Based on your input, you will get a visual output of comparisons across industries. You can then use the generated table and chart to better explain the differences in market forces in the respective industries. This will help support your explanation of the industry attractiveness for each of these.
Taking this extra effort to include visual representations will make your assignments special, helping you stand out from your peers. It could be very useful in getting you better grades. This is especially if your professor intends to use rank-based grading (also known as grading on a curve).
Instructions for using the different industries comparison tool
This tool is designed to be used on a desktop for best experience. You may face cropping issues if you are using this on a mobile device.
The table, values and chart will all be reset if you refresh the page or close and then reopen it.
Please follow these instructions to use this tool effectively.
- Change the headings for industries to suit your specific requirement
- Delete any unnecessary industries or sectors, according to your requirement
- Assign values for each market force on a scale from 0 to 10 (0 being lowest threat, and 10 being highest)
- Text-based representations of your values are generated to grade the threat from very low to very high
- Visual representation is also generated for the comparisons across industries
- Copy the table or chart to your assignment files by using the ‘Snip Feature’ in Windows (as explained in this guide from Microsoft), or follow this guide for taking screenshots on a Mac OS
References
Porter, M. E. (2008). The five competitive forces that shape strategy. Harvard business review, 86 (1), 25-40.