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Paper Topic:

Investment Analysis


Marks Spencer and Vodafone are both listed on the London Stock Exchange and if a certain investor wanted to put his money in either of the two shares , then he would have to carry out a number of analyses to find out which of these two shares would yield a higher return . The two companies belong to different industries . Marks Spencer conducts business in the consumer goods industry and Vodafone conducts business in the telecommunications industry . Thus the analyses would have to focus on not only the different internal structure specific

to each company but also on the industry dynamics that are specific to each company . A comparison of the two analyses would reveal which of the two companies would continue to generate greater profits in the next five years . Whichever company has the greater positive expectations of the future would be a better buy

Porter 's five forces analysis

A company 's business performance is not a world of its own . It operates in an industry the performance of which will affect the performance of its own operations . It happens rarely that one business organization can alter the course of an entire industry . One of those rare cases is the software industry which Microsoft dominates . Microsoft has such a commanding presence in the software industry that whatever it does has a major impact on the industry as a whole and the other players in the industry have little choice but to follow its lead . In the consumer goods industry however , in which Marks Spencer operates , the situation is hardly that simple . The consumer goods industry is a highly competitive industry and therefore Marks Spencer on its own will not be able to make an impact to the extent that it can turn the whole industry around assuming that the industry is not doing so well Therefore the five forces analysis will have to be conducted rigourously to make sure that the future projections concerning the company 's profitability are reliable . In the case of the consumer goods industry barriers to entry are very low . This has happened because of the emergence of the e-commerce business model which Amazon .com pioneered Because most of the consumer goods can be sold online , capital expenditures have been brought down to a minimal . A company like Amazon .com does not have to invest billions of dollars in renting space It does have to maintain distribution warehouses , but then those companies in the consumer goods industry which do not conduct operations online or which , at the very least , jumped on the internet bandwagon a bit late in the game and are currently selling online and the traditional way concurrently , have to maintain not only the distribution warehouses but also miles of space for brick-and-mortar department stores . This nearly doubles operating expenses for companies like Marks Spencer . Therefore , the low barriers to entry are definitely a threat for MarksSpencer

The remaining four forces of Porter 's industry analysis do not present a brightly glowing...

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