Syllabus - Accounting Paper Auditing Outline

Accounting Paper Auditing Outline for first part of group project: Five Forces Model (Massi and Elie)

How clearly is the industry defined?

1. Introduction to the Paper/Industry

2. Starbucks, Fast Food coffee, Regular coffee shops (who is in the industry)

3. What products mainly do they sell

4. Maybe hit on prices too , average price for Coffee

How well are the five forces identified?

1. Threat of New Entrants:

Economies of Scale; does the cost of producing products decrease when we increase the number of products produced ?.... Efficiency ?

Economies of Scale could be in marketing, manufacturing, research and development

Product Differentiation:

Are the products unique to the customers? (Customer service, advertising)

Brand Loyalty? Will customers change to other products if offered at lower prices?

Capital Requirements:

How much does it cost to get in the industry; resources, capital, physical facilities, knowledge..

Switching Costs:

Will it cost customers to buy other products?

Are there customer loyalty programs in the industry that increase switching costs? (Example credit card rewards system, you get points for using, attractive to people)

Access to distribution channels:

Do new entrants have to pay or fight for shelf-space?

Will distributors (of beans) have switching costs to supply new group of entrants?

Cost disadvantage independent of economies of scale:

Firms already in the industry have favorable access to raw materials? Desirable locations? Product Technology?

Government Policy:

Are there restrictions on new entrants in an effort to protect jobs or quality of products?

Permits or Requirements?

2. Bargaining Power of Suppliers:

Who Are the Suppliers?

Few or many sellers?

Is the industry a significant customer of these suppliers?

Is it possible for Suppliers to forward integrate? (Make the products themselves)

High