In the textbook there are 21 questions provided regarding items to consider when

In the textbook there are 21 questions provided regarding items to consider when conducting an industry analysis. Review the questions listed on pages 169 and 170. Choose three that you think are the most important of all questions provided. Discuss why those three items are important when conducting an industry analysis. Participate in follow-up discussion by reviewing classmates’ posts and discussing whether the cost leadership or differentiation competitive strategy would be the most effective approach based on the three items provided.
Jessica Lewis
When analyzing industry, I think the following questions are the most important.
1. How many suppliers are there, and are there available substitutes?
a. This is important because if there is a small amount of suppliers, the cost of product is defined by the supplier, and there is little room to negotiate price when attempting to purchase in bulk. It also can create a delay in shipping if there is a limited amount of suppliers, causing delays in sales for the customers.
2. What are the key economic and regulatory issues faced by companies in this industry?
a. Regulatory issues could cause delays, because if product does not pass regulation standards, it causes delays with delivery, thereby delaying sales for the company. If a company is delayed for too long due to regulatory issues, customers may require refunds, which ends up putting the company is a difficult situation because they are now out monies with both the supplier and the customer.
3. Do purchasers buy in large quantities?
a. If this is something required by suppliers, then customers need to know what they are purchasing because of the investment of inventories, and the delay that this can cause in reconciling inventories. They may show in one period the purchase of the inventories, and it may not be until the next period or later that the amount in sales is able to balance the loss of monies from inventories. This can affect how customers purchase from suppliers, or how they sell their goods.
Young, S. D., Cohen, J., & Bens, D. A. (2018). Corporate financial reporting and analysis (4th ed.). Wiley.