Guidelines for Internship

1. INTRODUCTION Internship is a scheme of arrangements, requiring a student to work in an organization for a specific period of time. In line with the degree requirements for the award of MBA and BBA (Hons) degree, the students are required to spend 6-8 weeks in an organization so that the students could gain an understanding of the real business practices. The students have to start search for an organization of their choice well before the start of their internship as the final approval of the student usually takes time. It is advised that students should start searching an organization for internship some 3-4 months before their internship starts. To facilitate the students in the organization search process, the Research and Development section at the Institute of Management Sciences, KUST will take a proactive step and inform the BBA and MBA students well in advance of the start of their internship to start search of organization for their internship. Specifically, the students of BBA and MBA will be informed at the start of the semester subsequent to which their internship will start, preferably at the start of 7th semester in case of BBA students and 3rd semester in case of MBA students respectively. The internship letters will be handed over to the concerned advisors / students so that the students may start searching for organizations of their choice.

Students should send their internship letter to the Human Resource Departments / Head of the organization and try to pursue their case as the number of students is quite large compared to the number of organizations. Since, Internship is a golden opportunity for a student to join that respective organization in future; therefore it is highly advised that the students should select an organization which they think will be suitable for their future appointment. These organizations usually offer jobs to the internees as the internees become more trained in two months internships as compared to new people who have no relevant experience for the respective organization. It is very important that besides some of the general part in his internship report (such as incase of introduction part and industry analysis section of the internship report), students must focus on his own area of specialization while working in an organization (e.g., Finance, Marketing, Human Resource etc).

1.1

Selection of Supervisor

The students will be given either an option to select the internship supervisors of their choice or the supervisors will be allotted to students by the R & D section, depending upon the prevailing circumstances as deemed suitable by the department. Once a supervisor is chosen, the students will be allowed to change his supervisor within one week maximum period after which no change of supervisor will be allowed. A supervisor may be allowed to supervise a stipulated maximum number of students which will be decided by the Research and Development section from time to time depending upon the maximum number of internship students and the available faculty members. In case a supervisor is having less number of internees (than the stipulated number), the concerned supervisor may be asked to provide the list of excessive students which he / she is willing to be allocated by R & D to other supervisors who are short of the stipulated number of internees.

1.2

Interaction with Supervisor during Internship

Every student (internee) will be required to have a close interaction with his / her supervisor during the internship period. Every student will be required to submit a bi-weekly progress report to his concerned supervisor on a proforma which will be provided by the concerned supervisor to his student. The student must report to his supervisor about the progress on the stipulated task assigned to him during this period. The supervisor has to submit the progress report received from the student to R & D at the end of each month subsequent upon which a detailed report about the progress report of students will be produced and forwarded by R & D to the director. To provide a guide map to the supervisor as well as the student, the Internship Report Completion Plan covering a period of 8 weeks will be provided. This will follow the following pattern: Duration of Internship First Four Weeks Company / Organization Analysis 5th, 6th, and 7th Weeks Recommendations 8 Week 8th Week A general Report by the internee on the overall learning and experience at the concerned organization
th

Task to be Completed The relevant Industry Analysis

Bi-Weekly Reports The student has to provide a bi-weekly report to his / her supervisor about the progress so far made on the internship task for that period respectively.

1.3

Final Internship Report

Writing a report on each section of internship report (that is, industry analysis or company analysis) is much easier than writing an entire internship report once the internship duration is over. Therefore, the internship students are highly advised to present the parts of his / her internship report which they complete during each progress report period to his / her concerned supervisor. This will help the student to write down the information which is quite fresh in their memories about each part of their internship report; otherwise, they will forget much valuable information that they obtain during their internship period. Once a student completes his / her internship report, they have to submit a draft copy of the internship report to the concerned supervisor. Internship report should contain 10-15 typed pages (excluding annexes). A report would not be evaluated by its thickness but by quality of work especially its industry analysis, company analysis and the final recommendations based on the preceding sections. A good report is supposed to be very comprehensive in terms of materials for its industry analysis and company analysis sections particularly. (A colorful report is not a guarantee of securing top score). Substance and organized presentation of report improves the quality of report. In case the report is not up to the prescribed standard, the student would be asked to improve it as per comments of the respective supervisor. The students who successfully submit the final report will be allowed to appear for presentation of his report / viva voce.

1.3.1

Format (Layout) of the Report

There is no hard and fast rule for the format of the internship report. The start pages containing the students name and the supervisor name as usually practiced in the students semester assignments may be used. The only point to remember is to give Header and Footer and any References if required at the end of the report. The header should include: Concept paper on ------------------------- (write the company name in blanks). In footer, write the Institute name). The students should strictly follow the following format requirement:

1.3.2

Plagiarized Report

It is very important to note that reproduction of any report or document shall not be accepted. In such cases, the student will be strictly penalized. This may include writing the entire report different than the one submitted or repeating the whole activity of internship in some other organization assigned by the institute. The R & D section upon receiving a plagiarized case of any student will evaluate the case and recommend to the Director for final action. It is therefore highly recommended that the concerned supervisors should inform the students about the consequences of

such immoral act. While taking some material from the organization website, internet etc, the student must provide the exact references.

1.3.3

Volume of Internship Report

Internship report should contain 10-15 typed pages line spacing 1.5 (excluding annexes). A report would not be evaluated by its thickness but by quality of work especially its industry analysis, Company analysis and recommendations. A good report is supposed to be very comprehensive in terms of presentation of its substance. (A colorful report is not a guarantee of securing top score). Substance and organized presentation of report improves the quality of report. There is no need to attach organization brochures and pamphlets with internship report.

2. STRUCTURE OF THE REPORT The internship report can be divided into 4 sections which include Introduction, Industry analysis, Company analysis and Recommendations. A general outline of each section / part can be as follows: 2.1 Introduction of the Report (Part-1)

In this part, the student should discuss some basic information regarding the process of preparation of the report. It is very important to note that the background information of the organization in which the student is doing internship should not be discussed in this section. The background information of the organization should be discussed in the company analysis section of the report. This part should contain discussion about the following topics which should cover not more than a single page. 2.1.1 Purpose of study In a few lines, purpose of the study should be included in this section. For example, the students can say that the main purpose of this study is to analyze a particular company (such as Kohat Textile Mill) as well the textile industry of Pakistan so that useful recommendations for future could be given to the respective company. 2.1.2 Methodology of Report In this section, the students have to discuss how they will be analyzing the particular company in which the student is doing his internship. That is, the student has to state whether he / she has to collect primary data or secondary data. While collecting data and other relevant information, internees use certain methods. 2.1.3 Scheme of Internship Report

In this section, the student should state about the scheme of the entire internship report. For example, the student may state that this report contain four sections / parts. That is, the introduction part, industry analysis, company analysis and recommendations. Then in each section, the student should discuss about the sub-parts. For example, the introduction part includes purpose of the report, methodology of report and scheme of report. 2.2 Industry Analysis (Part-I1)

In this part / section, the student has to analyze the respective industry / sector. The main objective of an industry analysis is to understand the size of the industry, its rate of growth, its level of profitability, attractiveness and opportunities, the major types of distribution channels structure being used in the industry and the Key success factors (KSF) which every company should consider important. In order to guide the students in a better direction while analyzing a particular industry, the following points may be adopted so that the student should easily write the industry analysis section. These points are:

Industry Analysis

Key Success Factors Market Size (Current and Future) Market Growth Rate Market Profitability Distribution Channels Market Trends

2.2.1

Key Success Factors

The key success factors are those elements that are necessary in order for the firm to achieve its objectives. A few examples of such factors include:

Access to essential unique resources Ability to achieve economies of scale Access to distribution channels

The student should discuss with the senior members of the organization (for example marketing managers / brand managers etc) that what are the important and key success factors for a company operating in that particular industry. Moreover, the student should also get this information that how the particular company (in which the student is doing internship) is acting or managing these key success factors. For example, about the some of the key success factors as above, the student should know the following:

For key success factor 1, if a company can easily get access to unique resources and get a competitive advantage over other companies. For key success factor 2, the student should discuss with the management of the company whether it is possible for the company to start large scale production, minimize the per unit cost and search other markets for increase of sale? For key success factor 3, the student should discuss with the management that is it difficult in the industry to access to the existing members of distribution channels (that is, distributors, retail shops or company agents). That is, whether the existing members of distribution channel will easily agree to sell the products of the company Besides the above key success factors, there can be so many other key success factors which the student should identify while discussing with the management of the company (managers etc). Overall, the student should understand that if a company is managing these key success factors and giving it much care, then it is more expected that the company is performing well and this will be evident from the company sales and profitability analysis. 2.2.2 Market Size

The size of the market can be evaluated based on present sales and on potential sales if the use of the product were expanded. The following are some information sources for determining market size:

The concerned trade associations (e.g., All Pakistan Textiles Mills Associations etc)
(Students can easily get the data of relevant industry from the relevant trade association which is available on net. The trade association website contains all type of data for the entire industry and companies).

Government data Financial data from major players(by looking at the sales data of some 10 major companies in the annual
reports of these companies which are available on stock exchange websites)

What to derive from Market Size discussion After the analysis, If a student understands that the market size is expanding, then it shows greater market opportunities and represents a rich area in which the company should be given recommendations to get advantage of this market size expansion. 2.2.3 Market Growth Rate

Here the student has to look at the total industry sales figures of the last years (may be last 10 years or more) and then extrapolate / forecast for the total industry sales in future years (may be up to next 5 years). Besides this straight forwarward method of calculating the market growth rate for

future, it is important that students should also look at the market and growth of other complementary products (e.g., if the student forecast on the basis of previous years data that the industry sales volume for mineral water will increase, it is more likely that the total industry sales volume for cold drinks including juices etc will also increase).

What to derive from Market Growth Rate discussion If the market is growing (such as market for packed juice / packed milk has much increases and is still increasing), then it also represent an opportunity and the company should be given a recommendation to expand its sales. For example, a company analyzes its distribution system and then decides whether to increase its distribution network in other markets, or increase its distribution in the existing markets in which the company is currently working. That is, by distributing greater quantity to existing shops or approaching to new retail shops. The student should also consider other options like starting promotions so that the benefits of increasingly growing market could be achieved.

2.2.4

Market Profitability

Here the student has to state that how much easier or difficult it is for a new company to start business in this industry (the industry in which the student is doing internship, like Textile industry, Banking sector etc). simple it means that how much this industry / sector is attractive and profitable for new businesses. For this purpose, to know about the profitability of an industry, the student has to work according to Micheal Porter Five Forces Model which contain five forces that influence the industry profitability. The five forces / steps to be covered by a student are:

Buyer power Supplier power Barriers to entry Threat of substitute products Rivalry among firms in the industry

What to derive from Market Profitability Analysis There are many reports available on Michael Porter Market Profitability analysis which can easily obtained from internet. For students guidance and ease, the Market profitability analysis of UK Music industry is included in Annexure (A). The student should consult these and understand how to analyze the profiyability of an indtsrry and how to relate this profitability analysis with the overall industry and company analysis. It is very IMPORTANT to note that the student should apply / relate the discussion of each section of the market profitability (such as, buyer power) to

the overall industry analysis and not just state for example that the buyers have more power in the industry.

2.2.5

Market Trends

Changes in the market are important because they often are the source of new opportunities and threats. The student should discuss with the senior members of the organization (for example marketing managers / brand managers etc) that what are the new trends which are currently in practice as well as the trends that they are expecting to affect the industry in near future. For example, in case of mineral water, the trend of people may show that people are becoming more health conscious and they demand clean water. Moreover, this trend may be affecting the household consumers and thus the company may have to think about offering mineral water for household consumers in big jars. Another example may be related to internet and Telecom sector in which the company may realize that how households internet consumers have changed from using prepaid cards of internet (e.g., Panga internet cards) to households now using permanent DSL connection in homes. The new trend is now related with the use of internet through mobile.

What to derive from Market Trend Analysis New trends again represent opportunities for the companies and he students should consider the same points as discussed in sections Market Size and Market Growth Rate. The student should discuss with the company management as well as observe personally whether the company is following the new trends in the market or not?

2.3

Company Analysis (Part-III)

In the company analysis, the student has to adopt the following pattern: 2.3.1 Company Introduction

In this section, the student has to introduce the company to its readers. The main points to be followed are:

Missions, Visions, Values, Goals: These are usually available on the company Web site under "About us", "About the company". Reference must be given for the material taken from the company website.

History: How the company started its journey and the significant developments that the company has made since its inception. That is, how many products were the company offering in the start, how the company expanded its overall product mix. For example, in the start the Cocal Cola / Pepsi Company were offering carbonated beverages, but they have also started juices, energy drinks, snacks etc. This information may also be obtained from company website, or the history of the company may be available on internet (if the company is international Co) or may discuss about the history with the management of the company.

Note: It is advised to the students that they must ask from the company management about the success / journey of the company towards its mission and vision. That is, what they have done or doing to pursue its mission and vision. From, here, the student can get a sharp clue about the general performance of the company. 2.3.2 Company Analysis (in the Area of Specialization)

In this part, the student has to analyze the company from the perspective of his / her area of specialization. Thus a marketing student will analyze the company marketing position, the finance student will analyze the financial perspective of the company where as the student specializing in human resource will analyze the human resource practices of the company. The respective students will follow the following pattern in their internship report:

2.3.2 (a)

Company Analysis (by Finance Students)

Students will be doing Financial statement analysis of the company corresponding to last four years (student will be needing two most recent annual statements). It is IMPORTANT to note that the student MUST interpret the meaning of the financial analysis as well as discuss about the reasons of week areas of financial analysis. For instance, the low Gross margin ratio (Cost of Goods Sold / Sale) might be due to less amount of sale. The student should then discuss with the management of the company why the sale of company has down. For writing a meaningful financial analysis report, the students can get help from the financial analysis of any company which the student can search through internet. It is IMPORTANT that the student after looking at the different financial ratios of the company should reach to the main cause due to which the company sale / profit etc has gone down. For instance, if the financial analysis of a company shows that the gross margin ratio of the company has gone down, other financial analysis by the student shows the following information: the industry analysis shows that it is growing at a fast rate, the sales figure of the company also shows that it has increased, inventory turnover ratio is also satisfactory (meet the industry standard), then possible conclusion would be that greater chances of poor gross margin ration may due to increase in the cost of the products. The student

should then recommend to the management an appropriate way of action to control over the increasing cost of input which may involve purchase of raw material in bulk etc.

Note: In addition to above financial analysis, the concerned finance teacher may ask the internee to do additional financial analysis which the concerned teacher consider necessary.

2.3.2

SWOT Analysis of the Company based on Financial Analysis

In this part, the finance student in addition to general strengths, weaknesses, opportunities and threats of the company, has also to include the strengths, weaknesses, opportunities and threats on the basis of the company financial analysis / discussion with the management regarding the financial aspect of the company. The main objective of the SWOT analysis is to analyze the position of the company, to understand how it can obtain any advantage of the existing opportunities or respond to the threats in the industry. In other words, the student should look / compare the company Strengths and Weaknesses with the Threats and Opportunities faced by the company and in the light of this SWOT analysis, the student should recommend to the company what steps the company should take. That is, whether the company should develop more strength in order to get advantage of an opportunity in the market or the company can avail the benefits of an opportunity with its existing strengths. For example, if the company is operating at 60 percent capacity and the market size is growing, this would mean that the company should utilize its existing production capacity by further 40 percent to increase its sales. Similarly, the student should also look at the weaknesses and threats of the company to know whether the coming threats for the company can be handled with the existing strengths and whether the existing weaknesses are preventing the company from achieving of its objectives? In short the student should deeply understand the application of SWOT analysis. IMPORTANT: The student is not supposed to write down only the strengths, weaknesses, opportunities and threats in just 4 quadrants / parts. The students must interpret and derive meaning of the SWOT analysis such that the students should apply it to the company and industry analysis as discussed.

2.3.2

Company Analysis (by Marketing Students)

The marketing student has to discuss with the management of the company about the different aspects of marketing regarding its products. It is important to note that if the company is offering so many different products, the student may take only one product among the many products

which the company offers and write a marketing report about that product only. However, the number of products being considered for analysis will depend on the importance of the product among the total product mix of the company. For instance, a student doing internship in Habib Cooking Oil may take only the Oil products of the company and not its Ghee products. Similarly, a student doing internship in a local telecom franchise may analyze the main / leading services of the franchise. In other words, such services / products should form the major source of income of the franchise. The marketing student should follow the following pattern of analysis: Segmentation, Targeting and Positioning of the selected Product (s) In this section, the student has to carry out segmentation, targeting and positioning analysis for the selected products. First of all, the student should discuss about the available segments for the selected type of product in the entire industry (it means that what other companies have segmented the market for such product and on what basis) and then state how the company has segmented its own product (s) for different markets. The company website can also provide guidance to the student to understand about the segments of consumers which the company target for its product(s). Similarly, the student should also state how the company has positioned these selected product(s). Thus, Pulpy orange juice has totally a separate positioning as compared to other packed juices available in the market. That is, pulpy juice is positioned as pure juice of orange PULPS as compared to other juices which contain only the juice essence. The student is advised to consult the marketing analysis section included in the Annexure B.

Sales Analysis The student should compare the sales of the selected product (s) of the company and including the sales of its various pack-sizes with the 4 or 5 major competitors. The sales figure should cover a period of 4-5 years. It is IMPORTANT to note that sometimes sales figures are confidential. In this regard, the concerned manager should be asked to provide you sales figure which is 10-20 percent less than the actual sales figure. Thus if the company actual sale of Dalda Cooking Oil (5 liter) is 1oo, ooo ton per year, it should be presented in the student report as 80,000 ton. At the same time, while comparing the company sales with its major competitors, the company management knows a rough sales figure of its major competitors as they know about the market share of the major competitors. By applying the market share percentage of a particular company to the total industry sales (industry sales is known from the website of the concerned association, for instance, the total industry sales of oil can be obtained from the website of All Pakistan Ghee Association), the sales figure of each competitor can be obtained. Regarding the pack-wise sales figure of each competitors, the marketing manager or any other knowledgeable management person can roughly calculate the pack-wise sales (e.g., Dalda Cooking Oil, 5 liter, 2.5 liter, 1 liter). The student should follow the format as shown n Annexure C for sales analysis.

Promotional Strategy The student is advised to look into the different promotion methods that the company is using. The easiest way for student is to see what type of Below the Line (BTL) and Above the Line (ATL) promotions are used. All those promotions which the company is doing in the local markets like pamphlets, sign board, bill boards, in-store displays like wobblers, Point of Purchase (POP) Display etc are BTL promotions. The television advertisements, print advertising and nationwide promotional campaigns forms the ATL promotions. The student should also state the purpose and targets of such promotions. For segmentation, targeting and positioning; promotion, and distribution strategy of the company, take help from Annexure B.

Distribution Channels and Operations The basic objective of the distribution analysis is to analyze the distribution system of the company and suggest to the company that how the distribution system can be utilized to increase the sales of the company. In this section, the student should take start from discussing the distribution structure (all types of channels of distribution adopted in the industry) as adopted in the entire industry. To do so, the student should discuss about the distribution pattern followed by some of the major or big companies in the industry. For instance, a student doing internship in cold drinks and Beverages Company should discuss about the distribution structure followed by Coca Cola or Pepsi. Then the student should discuss whether the company is operating its distribution system as like other partners in the industry. Is the company operating in a particular locality / region or province wise etc. Moreover, the student should state about the drawbacks / problems in the company distribution system, for instance, whether the company should intensify its distribution in the existing market or new markets should be served? The student should use Ansoff Growth Matrix for this purpose.

2.3.2 (b) SWOT Analysis of the Company based on Marketing Analysis In this part, the marketing student in addition to general strengths, weaknesses, opportunities and threats of the company, has also to include SWOT on the basis of his observations / discussion with the Management regarding the marketing aspect of the company. It is advised that when the student is critically analyzing the company marketing position, certain opportunities as well as threats would have already been identified. Similarly, the student can also obtain information about the strengths and weaknesses of the company from the company management. Once the student identifies the SWOT of the company, the student has to analyze it. That is, derive some meaning out of the SWOT analysis. Just writing of Strengths, Weaknesses, Opportunities and Threats is of

no use unless it is discussed in the report that what it means for the respective company. That is, whether the company should develop more strength in order to get advantage of an opportunity in the market or the company can avail the benefits of an opportunity with its existing strengths. For example, if the company is operating at 60 percent capacity and the market size is growing, this would mean that the company should utilize its existing production capacity by further 40 percent to increase its sales. Similarly, the student should also look at the weaknesses and threats of the company to know whether the coming threats for the company can be handled with the existing strengths and whether the existing weaknesses are preventing the company from achieving of its objectives. In short the student should deeply understand the application of SWOT analysis.

IMPORTANT: The student is not supposed to write down only the strengths, weaknesses, opportunities and threats in just 4 quadrants / parts. The students must interpret and derive meaning of the SWOT analysis such that the students should apply it to the company and industry analysis as discussed.

2.3.2 Company Analysis (by Human Resource Management Students) In this section, the HRM student has to analyze the company from HR perspective. In simple words, the student has to go through four HR major functions which are Staffing practices, training and development practices, motivational techniques and Maintenance. Each function has to be investigated from the following perspective respectively:

1. Staffing Practices

3. Training and Development Practices Employees training Employees Development Organizational Development Career Development

Human Resource planning Recruitment and Selection policies

2. Motivational techniques

4. Maintenance Safety and Health policies Communication policies Grievance Procedures

Salary and compensation policies Rewards and Benefits Performance Appraisal

(The student can get this data from HR-Score Card which they can discuss with the management of the company). 2.3.2 (c) SWOT Analysis of the Company based on HR Analysis The HR student, in addition to general strengths, weaknesses, opportunities and threats of the company, has also to include SWOT on the basis of his observations / discussion with the management regarding the Human resource aspect of the company. The rest of procedure for SWOT analysis (that is, analyzing and deriving a meaningful recommendation from the analysis of strengths, weaknesses, opportunities and threats of the company) is the same as for finance and marketing students.

IMPORTANT: The student is not supposed to write down only the strengths, weaknesses, opportunities and threats in just 4 quadrants / parts. The students must interpret and derive meaning of the SWOT analysis such that the students should apply it to the company and industry analysis as discussed.

2.3 Recommendations (Part-IV) In this section, the student has to recommend possible future actions to the company. To do so, the student has to once again return to SWOT analysis. Based on the SWOT analysis in general as well as the SWOT analysis in the field of specialization (such as Financial Statement Analysis / Marketing Analysis/ HR analysis etc), the company should be recommended suitable actions for the opportunities which are currently prevailing in the market as well as those opportunities which the company expect to arise in future (the student may get it from Market Trends section). Moreover, suggestions should be given to the company stating that how different threats which have been identified by the student can be minimized. The student should also recommend to the company how certain weaknesses can be removed or the strengths of the company be enhanced. For initial understanding about recommendation section, please refer to Annexure D.

Annexure A
Analysis of Industry attractiveness - Porter's five forces in UK music Industry

Dear Student, This is a guideline as to how to use porter five forces. Hope you' will give some 15 minutes to understand it and apply it during your internship.

INTRODUCTION The music industry in UK in the past years has experienced a significant growth. With the growth of online digital music and the replacement of traditional methods of storage such as CDs with portable music devices, the industry has transformed significantly. Currently, the UK music industry is ranked third in the world, which accounts for 9.2% of global sales in 2009 and is the second largest repertoire in the world behind USA. The major players in the UK music scenario are EMI music, which is also the fourth largest recording company in the world, Sony music UK (Subsidiary of Sony Music Entertainment) and Virgin media. The total revenue recorded in 2009 was 3.9 billion which was a 4.7% increase when compared to 2008 (http://musically.com/blog/2010/08/04/uk-music-industry-revenues-2009/). The following analysis attempts to evaluate the attractiveness of the UK music industry using Porters five forces model of industry competition. PORTERS FIVE FORCES The five forces framework by Michael Porter (1980) is an industry analysis and business strategy development tool which allows marketers to ultimately create shareholder value through business operations. It analyses the market/industry attractiveness which means the ease with which a player can expect to make profit that needs to be compared with the level of risk involved in transacting in the market. The main determinants of attractiveness are demand & supply of goods in the market, number of competitors currently in the market & their strengths/weaknesses, rate of growth and margins offered. Undertaking the analysis has managerial implications to evaluate which industries a firm needs to enter or leave, how much competitive influence it can exert on the already established players in the market and how are competitors differently affected by the influences in the market. This analysis usually comes under micro environment analysis and is used along with other analysis such as PESTEL and SWOT. Since this considers the factors which closely relate to the business, a change in any of the factors may affect their ability to serve customers effectively and therefore will require the business to re-assess their situation. A graphical representation of the five forces framework is below.

FIVE FORCES FOR UK MUSIC INDUSTRY

An evaluation of the competitive environment is carried out using the five forces. A detailed evaluation for the UK music industry is below;

1) Bargaining power of Suppliers The first force that porter identified to be important in determining industry attractiveness is the power of suppliers as the presence of powerful suppliers reduces the potential for high profits in an industry. The bargaining power for a supplier becomes high if; - There are less substitutes for the products or services they are supplying - The amount which can be supplied is limited, which increases the demand for their products - There are high switching costs of changing from one supplier to another Unlike other industries, the main suppliers for the music industry consists of sources through which music labels get access to music. They include the artists and their managers. In addition, due to the rise of the reality shows, producers of shows have also become suppliers for music labels with new talent. The bargaining power of artists are high as it can be said that the voice and ability of each artist is unique and cannot be substituted. Due to the demand for new talent from a wide range of record labels, the options for artists are high which makes signing of new artists for a record label very difficult. This, hands over a high bargaining power to the artists. In addition to this, the ability for artists to promote & sell their albums over their own web pages had eradicated the need for most services provided by record labels. In these cases, the record label serves only to provide studios and music support rather than the full services including promotion, distribution and sales. Therefore the internet has increased the bargaining power of

suppliers although the success of self-promotion is less.

A lesser bargaining power can be expected by other suppliers such as suppliers of recording disks and other materials such as plastic casings which are needed for album packaging as there are large number of suppliers of these content over the world, especially from China and they are purchased in bulk and falls within a contract. 2) Bargaining power of Customers Bargaining power of customers is another aspect which helps in assessing the industry attractiveness. In this scenario the customers for the UK music industry can be two fold, individual and corporate. Corporate customers in the music industry include online & offline retailers who purchase albums in bulk from the music label. They may include stores such as HMV & Game and online music stores such as iTunes, AmazonMP3 & Zune. The bargaining power of the corporate customers can

be said to be low due to prices being agreed between them and the labels at the time of contract signing. Individual customers in this industry can be identified as the music listeners who purchase music either online or offline. The bargaining power of individual customers has been rising in recent years due to piracy which has forced the whole music industry to drive down album prices. In addition, with intense competition in the industry, price cutting is evident especially in online music sales. Therefore bargaining power of customers can be assumed to be very high. 3) Threat of new entrants The next force in determining industry attractiveness is threat of new entrants which, to a great extent depend upon the barriers to entry or the ease of entering the competitive sphere. The barriers to entry are created by the following factors; - Level of expertise required for successful operation - Access to resources & distribution network - Industry contacts The music industry is a highly specialized sector. Typically selection of a talented artists and turning him/her to a success requires a lot of skilful application of marketing, talent management and investment. Established music labels spend millions in undertaking image development campaigns, recording and test marketing before the work of an artist is released to the public. These areas require specialist skills and having access to money. In addition they might need an extensive distribution network, including online partners for online distribution, which is handy in immediate distribution of albums to points of sale. Industry contacts are handy in organising concerts and shows for promotion of albums and creating a buzz for the artist. It will be difficult for a new entrant to the music industry to undertake all above activities and beat the competitors in a short time. Due to the experience of industry giants such as EMI and Sony music and their financial power in the industry, it is very difficult for a new entrant to capture a significant share of the UK music market. Therefore it can be said that the threat of new

entrants is very low when considering the music industry.

4) Threat of Substitutes A substitute product or service can be identified as a rival product or service which meets the same customer needs approximately in the same way as the product or service of the firm. In music industry the substitutes for paid music purchases or downloads can be identified to be free streaming music online, pirated music downloads online and the TV & Radio channels playing 24 hour music.

Pirated music sites which offer music free of charge are the clearly identifiable substitute for the music industry. The choice of a customer to purchase music or to download it remains to be a battle in their conscience. Therefore the threat of this substitute is very high. Free streaming music such as those on My-space allows customers to listen to tracks unlimited number of times without purchasing the tracks. Although they dont receive the luxury of downloading it for free and listening on the move, it still can be considered as a substitute as it allows the entertainment of customers. Extra industry effects have a part to play when it comes to 24 hour TV & Radio music channels as the requirements for activating those services such as TV set top boxes and monthly subscriptions are quite expensive compared to price of an album. But with added facilities of recording and choice of other channels on offer, they may have better price to performance ratio when compared to a music album. As part of the entertainment industry, music can also be substituted by other channels of entertainment such as movies and games. Although they may not be direct substitutes for music, they still provide similar services in entertaining the consumer. It may be said that compared to music, movies and games have a larger utility although the prices are set higher than music. In terms of gaming, the complementary products required such as game-stations are higher priced than a regular MP3 player, but the price to performance ratio is still higher as the utility is higher.

Therefore it can be said the threat of other entertainment sources are also posing a mid to low level of threat of substitution to music industry.
5) Rivalry among the Competitors This section shows the level of competition among the different competitors in the industry. It means that if the competition in an industry is week, then companies may be able to raise prices or provide less product for the price and earn more profit. That is, if competition is week, customer will be at disadvantage. On the other hand, if completion is high, then those companies will be able to earn profit which is providing quality products to customers. The following are some of the important factors which affect the level of competition among the competitors:
1. If the product is not differentiable, that is, the customers perceive the products of every company as the same, then competition among the companies will be high. They will mostly compete on price basis. 2. If the market is not growing or growing slowly or the size of market is shrinking, companies will fight for market share as this will be the matter of survival. 3. If customers can easily switch from one company products to another company, then competition will be high. Such as in case of low price products ( soap, candies, snacks etc). 4. If the profit margin is high, competition will be high. Such as in case of CNG stations.

The UK music industry has been competed for by the big three recording studios for decades. Although there is fierce competition among these players, their market shares remained stable for years as new competition rarely entered the market due to high entry barriers. The industry is flourishing when comparing online and offline sales put together, according to RIAA statistics (http://76.74.24.142/44510E63-7B5E-5F42-DA74-349B51EDCE0F.pdf). The product differentiation achievable in the music industry is very low due to all genres being represented by artists being common. The differentiation may be achieved through the formats of music provided such as CD, DVD, Blue-ray and online formats such as MP3, WMV, etc. With digital downloads being more popular than the regular visit to the music store, music industry has continuously reduced number of outlets and focused on developing an online strategy. Through that they have been able to reduce high fixed costs such as outlet rentals and salaries of high number of outlet staff which has helped with their margins. In terms of the attractiveness, the industry can be said to be highly attractive due to prospects of music boom which began in the 1990s. With more and more talent coming out through reality shows such as X-factor in UK, more and more prospective artists may be introduced to the market.

IMPORTANT FOR STUDENTS Based on the five forces analysis, the student has to write the following type conclusion. This is what is demanded from the student. CONCLUSION From the above analysis it can be understood that the Music industry in UK is flourishing. But it is dominated by big three players who have been in operation for decades and operates large shares of the markets. Due to the highly specialized form of operations, the music industry may be assumed to be presenting high barriers to entry for a new player. With the development of internet technologies, these barriers to entry are gradually declining with more and more new entrants are making their way into the market through small scale operations. With high margins expected through online operations due to reduced costs, it can be said that market attractiveness is continually increasing. But the largest threat to the industry is posed from piracy, which is responsible for millions of pounds of losses (http://www.ifpi.org/content/library/DMR2010.pdf) for the industry. The margins for record labels and sellers have since 1990s being driven down due to this, and the customers are increasingly relying on pirated music due to its availability and the sense of freedom associated with it. Although legal crackdowns are taking place, the chances of eradicating piracy remains slim, this remains to be a disadvantage to the industry. The universal applicability of music as a form of entertainment may remain to be the largest selling proposition for this industry and is the largest reason behind the high profitability of the industry. Therefore in concluding it can be said that applying five forces theory is extremely important in industry analysis as it allows firms to develop better strategies through identification of forces operating in the market and the understanding the overall attractiveness of the industry.

Annexure B
Segmentation, Targeting and Positioning TR is positioned as Americas Candy, a niche American iconic confection in the nontraditional chocolate category, (Toops, 1996). The company website states that the TR brands resonate strongly among every age group, culture and demographic; for every occasion and event; and during every economic climate, qualifying them as truly enduring, iconic American confections. TR has two different market segments: Children and Adults. For children TR is positioned towards fun and for adults it is positioned towards the health benefits and the nostalgia reminiscent of childhood.

In the confectionary industry differentiation is an important part of minimizing the effect of competition on a companys performance, (IBIS, 2010). TR has done well in maintaining the strength of its unique product lines and maintaining shelf space in large retailers as well as diversifying to more specialty retail outlets such as dollar stores and movie theaters, (Hughlett, 2008). The company also maintains a value oriented confectioner position and has historically fueled most revenue growth through acquisitions and not internal research and development, (Hughlett, 2008) (Soleil Securities, 2010). Promotional Strategy TR relies on attractive and appealing packaging, off-the-shelf displays and advertising campaigns for its most famous brands. Most of the national advertising campaigns, especially for Tootsie Pops, have been targeted towards children, including the How Many Licks campaign. This has become an issue with a voluntary initiative to curb advertising to children sponsored by The Council of Better Business Bureaus Childrens Food and Beverage Advertising Initiative. Most of TRs competitors have agreed to stop advertising to children, such as Nestle, Hersheys and Mars. This may be the reason it appears that TR ads no longer appear on national television. Distribution Channels and Operation In the confection industry distribution is fairly straight forward and allows for mass sales through many outlets. TR has operations throughout North America, Canada and Mexico with distribution

centers in more than 75 countries. The products are distributed by the company and through approximately 100 candy and grocery brokers to approximately 15,000 customers throughout the US with Wal-Mart being TRs largest customer at 23.9% of net sales in 2009 (Soleil Securities, 2010). TR not only participates in mass distribution to supermarkets, warehouses, membership stores, vending machines and drug stores, but is also able to specialize and focus distribution in smaller venues such as theaters, dollar stores and convenience stores. TR is currently looking at Lean operations to minimize the costs of operations and waste. It owns its own sugar refineries, printing presses, advertising agency, rebuilds machinery in-house and produces its own sticks for Tootsie Pops. Recent investments in operations include projects for state of the art plant installations, ERP and Oracle system upgrades and execution to integrated and automate key supply chain processes. These initiatives will help predict and shape market demand, increase inventory turns and reduce logistics costs.

Annexure C
Annual Sales of Dalda and its main Competitors (in Tons) Pack sizes Pouch pack 1 liter 2.5 liter 5 liter Total Dalda Kissan Meezan Sufi Shan

Yearly Sales of Dalda (2008-2011) in Tons Year 2007 2008 2009 2010 2011 Pouch Pack 1 liter 2.5 liter 5 liter Total

Province wise Sales Data Annual Sales of Dalda and its main Competitors (in Tons) Pack sizes Punjab Sindh KPK Balochist an Total Dalda Kissan Meezan Sufi Shan

In addition to above, the student may analyze the company and its Competitors sales data from the perspective of urban / rural areas.

Annexure D
Suggestions and Recommendations Following are the suggestions and recommendations for Nestle Milkpak Ltd. 1. The company should introduce its UHT brand for the price sensitive segment of UHT milk market in order to counter the market of Dairy Queen.

2. The company should also start to manufacture powder milk in order to meet the domestic demand and so that it can be helpful in saving the foreign exchange that is expensed in importing the powder milk from foreign countries.

3. The company should explore the market potential in a way, so that it can utilize its full capacity in order to gain economies of scale in the production.

4. At the moment the company is using focus marketing approach that only that segment is approached which highly attractive for the company but it should also develop the marketing program that distinguishes the characteristics of existing available substitutes to their highly quality & hygiene oriented product.

5. The company should also position its products to the middle income group like Everyday and NIDO have been positioned after their new small packaging launch.

6. The company should also develop an integrated awareness plan in order to aware the people about the quality of the UHT milk as compared to other pasteurized or loose/fresh milk.

Annexure E Student and Organization Profile

(Once the student has joined the organization, he / she should provide the following details to Concerned Supervisor)

Students Information
Student Name: ____________________________________________________

Program (BBA / MBA): __________________________

Cell Phone: ___________________________________

Home Phone: __________________________________

Email: ________________________________________

Internship Site
Name of organization/Company: __________________________

Address ___________________________________

Phone: __________________________________

Contact Person: ________________________________________

Annexure F Student Two Weeks Progress Report

(The student will provide a bi-weekly progress report to Concerned Supervisor)
Period of Progress Report ____________________________

Task Completed
_____________________________________________________________________________________ _____________________________________________________________________________________ _____________________________________________________________________________________ _____________________________________________________________________________________ _____________________________________________________________________________________ _____________________________________________________________________________________ _____________________________________________________________________________________ _____________________________________________________________________________________ _____________________________________________________________________________________

Remaining Task to be Completed (state the time when will you complete the
remaining task) _____________________________________________________________________________________ _____________________________________________________________________________________ _____________________________________________________________________________________

Student Name and Signature