DQS Harvard Case Solution & Analysis

Question no. 1

What analysis techniques would you use and why?

Answer to question no. 1

Introduction:

The company is in an established and stable condition, even in the declining industry of standard mobile handsets. The company manufactures 2.5 inches diagonal LCD’s for the mobile manufactures and supplies them the same and makes use of it in the making of their own products for the Asian markets.

Analysis techniques:

The analysis will be based on the following factors.

Investments required:

Investment is the most important thing that is to be considered by an investor in investing in a project. The risk based approach is that the investor does not look into the matter critically and makes the investment in an industry. The other approach is that the investor looks into the industry critically and then makes the investment so that he is aware of the risk and the opportunities he can avail from the investments.

Thus, this would allow the top management of the company to identify the amount of investment required as well as this would also allow the top management of the company to identify the potential sources to gather funds for investment.

Future expected economic inflows:

Another aspect of investment is to look for the amount of expected inflows of economic benefits from the investments. The major cause of investing in an industry is to make economic benefits inflow the entity or to the person. The company considers investing in such an industry from which the company can gain more than the investment for a longer period or even if the investment is not for a longer period, the company can be able to earn more than the investment in a short period of time.

External factors:

Following are the analysis of the external factors for which the company has to consider while making an investment in a new project. This would allow the top management of the company to identify and evaluate market drivers and growth.

PEST analysis:

Following is the pest analysis of the case.

Political analysis:

The company has to make a political analysis of the country in which the company is considering investing. If the political conditions of the country are strong and stable, then the company should consider investing in the country and if the political situation of the country is weak and unstable, then the company should not consider investing in such a country as the risk factor will increase.

Economic analysis:

The country has to be economically stable to be attractive towards the investors. If the state of an economy is not stable and is under-developed, it will not be an attractive economy for an investor to invest in an economy.

If an economy is a developing economy, then it will be an attractive economy for an investor as there will be more chances for the company to increase the profits with the increasing size of the economy. An economy which is a developed economy, then there will be fewer chances to gain profits from the economy as the previously working companies will be in a state of economies of scale and any new entrant will not be able to gain that level of success.

Social analysis:

The company has to consider the social environment of the country if the social background of the country supports the prospects of the company. The culture of a country has to be considered while making an investment is any country as the working of the market depends on the social and cultural habits of the country.DQS Case Solution

Technological analysis:

The technological analysis is the core of the investment that is to be made in an industry. If the technology that is to be used is too technological, then the labor has to be trained and if the technology is of poor quality, then the company will suffer with the cost of making the investment and the related inflows of the investment. The mix of labor and technology is to be used and the optimal mix will produce the product with the most effective cost.

PORTER analysis:

Porter analysis will tell the investor or the company the threats which the company can face in a market or in an industry. The porter analysis will allow the company to identify the threats from the new entrants, bargaining power of the suppliers, threats from the substitutes, bargaining power of buyers and the internal or external rivalry in the industry. Porter analysis would allow the top management of the company to evaluate the overall competitiveness of the industry and to set its performance accordingly............................

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