Economics 267
The Organization of Industry

Spring 2001
MWF 10:00-10:50, 213 Monteith
R. N. Langlois

Term Project: Industry Study

 

Introduction.

Twenty per cent of your grade in this course will be based on a term project that you will complete during the course of the semester. That project will be a structured report on a particular industry -- an industry study. Case studies of particular industries are an important tool of research in the field of industrial organization. Examining an industry in detail will give you a feel for how real-world firms and markets operate; it will also give you a chance to apply many of the theoretical ideas we will discuss in the course.

The choice of industry is up to you. You will also have wide latitude in what you choose to emphasize in your report. In order to give this project some discipline, however, I will insist on a number of groundrules.

·        Each of you will study a different industry, that is, no two students may work on the same industry.

·        You will hand in drafts of pieces of the report throughout the semester according to schedule.

·        Your report will follow a standard outline.

·        You will follow consistent rules of style, footnoting, and reference; and you will write clearly and grammatically.

·        There is no preset minimum or maximum number of pages. You will be judged on quality rather than quantity (although the two are not entirely unconnected).

Choice of topic.

You may choose any industry you wish. Examples would include automobiles, microelectronics, motion pictures, steel, beer, airlines, insurance, machine tools, banks and financial institutions, hospitals, overnight mail delivery, etc., etc. You are generally well advised to study a subsector of a larger industry, for example, microcomputers instead of all computers. Moreover, it may be a good idea to study a relatively more obscure industry rather than a well-known and glamorous one, as this would give more scope for original analysis and would prevent you from getting lost in an overload of secondary sources. You can use this report as a chance to investigate an industry you might want to work in when you graduate, or perhaps to find out more about an industry that one of your parents or relatives is connected with. If you need ideas, you might want to consult recent issues of The Wall Street Journal or magazines like Business Week, Forbes, Fortune, or The Economist.

You will formalize your choice of industry by handing in a one- or two-page prospectus no later than Monday, February 5, in class. You may turn your prospectus in earlier; in fact, I encourage you to "reserve" your topic as soon as possible. (If you can't find me, just have one of the Economics Department secretaries date and sign your prospectus and then put it in my mailbox in room 330 Monteith.) Choice of topic is on a first-come, first-served basis. If two or more students request the same industry at the same time, I will choose the one most persuasively written or, failing that, will choose one at random. The others will be sent back to the drawing board. Under normal circumstances, you may not change your topic once you've reserved it.

Your prospectus should indicate your reasons for your choice and should list any references you have found. You can also use the prospectus to ask me any questions you might have about sources, approach, etc.

Resources.

Obviously, the web is the first place to look for info.  Company websites often include annual reports and other info.  The library also has a number of online resources you should check out.

Format.

Your report will follow the attached outline. Please use these headings and this numbering scheme in your final report.

Charts and graphs are welcome.

Your final draft should include all footnotes and a bibliography in the following format

Books:

Author last name, first name. Year. Title. Place of publication: Publisher, pages.

Examples:

Langlois, Richard N., and Paul L. Robertson. 1995. Firms, Markets, and Economic Change: A Dynamic Theory of Business Institutions.  London: Routledge.

 

Articles in books:

Author last name, first name. Year. "Title," in  editor name, ed., Title. Place of publication: Publisher, pages.

Example:

Langlois, Richard N., and W. Edward Steinmueller. 1999. “The Evolution of Competitive Advantage in the Worldwide Semiconductor Industry, 1947-1996,” in David C. Mowery and Richard R. Nelson, eds., The Sources of Industrial Leadership.  New York: Cambridge University Press, 1999, pp. 19-78.

 

Articles in journals:

Author last name, first name. Year. "Title," Journal title volume(number): pages.

Example:

Langlois, Richard N. 1992. “External Economies and Economic Progress: The Case of the Microcomputer Industry,” Business History Review 66(1): 1-50 (Spring).

 

If a magazine or newspaper article has no author listed, just cite it as Newspaper or Magazine, date, pages.

Please edit your report for writing style, clarity, and grammar. You might find my notes on writing helpful.  If you have any questions along the way, raise them in class or see me during my office hours.

Schedule and grading.

In order to ensure that your work steadily on this project instead of waiting until the last minute, I will require you to hand in partial drafts at regular intervals. I will return these drafts to you with comments, and you will then incorporate them into the final report.  The whole report is due May 7, the last day of class.  These are hard deadlines. There are no exceptions not pre-approved by me. You have plenty of warning, so you should begin work immediately and arrange your schedule to avoid crunches later in the semester.

Let me emphasize that these deadlines are the latest you can hand in a draft. You are encouraged to hand in drafts earlier if you can. In fact, this schedule does not allow for me to read and comment on a draft of section 5; so if you want comments on these, you'll have to turn in the drafts ahead of time . I'll try to give you as quick a turn-around time as I can. As further incentive, I will grade the project not only on the basis of the final report but also on the quality and promptness of the drafts. Please keep your drafts and turn them in with the final report. Also, late drafts will count against you. You will lose one-third of a grade point (e.g., you'll drop from C+ to C or from A to A-) each time a draft is late. A draft late more than two days (measured from the beginning of the class period) will cost you two-thirds of a point. And a draft not turned in will cost you a whole grade point (e.g., from a B to a C). This is a stiff penalty function, so take the schedule seriously.


Standard Outline for Industry Study .

Prospectus due February 5.

1.      Introduction. (Due May 7 with final report.)

2.      Industry history and structure. (First draft due February 26.)

What does the industry produce? What is the basic technology? Who buys the product(s) and what are they used for? How are the products distributed? Give illustrative data on output, prices, employment, import and exports, etc. How many firms are there in the industry?  Is entry and exit easy or difficult?  How competitive is the industry in terms of both number of firms and degree of rivalry?  What role does government play in this industry?

3.      Advertising and innovation. (First draft due March 16.)

Are the industry's products differentiated and, if so, according to what characteristics (design, function, price range, geographic market, etc.)? What techniques of advertising are used in this industry and why?

How innovative is the industry, and what are the sources of innovation? What role does intellectual property rights protection play in this industry?

4.      Organization. (First draft due April 16.)

How is the industry organized? Are firms publicly or privately held? Do they tend to be part of a conglomerate? How are the firms integrated vertically? What parts of the chain of production do the firms undertake themselves and what do they buy from outside suppliers or pass on to independent distributors or retailers? How does vertical integration vary among firms in the industry? How has it changed over time?

5.      New Economy trends. (Due May 7 with final report.)

How have computers, the Internet, and modern communications technologies affected the structure of this industry?  How have they affected advertising, innovation, and organization?  What are the prospects for the future?