Five Forces - Analysis in Generative AI Industry

Mock diagram of industry at work

Description:

Building on your initial analysis of the generative AI industry, this activity challenges you to delve deeper into the Five Forces Analysis. You’ll apply steps 3 (“Analyze the players’ influence on profitability”) and 5 (“Develop a way to deal with the industry environment”) of the six-step industry analysis framework introduced in the “Industry Analysis” reading to develop strategic recommendations.

Learning Objectives:

By the end of this activity, you will be able to:

  • Analyze the competitive forces influencing profitability in the generative AI industry.
  • Evaluate the strategic positions of Nvidia and Google within this landscape.
  • Anticipate potential industry changes and their impact on key players.
  • Develop strategic recommendations for navigating the evolving generative AI landscape.

Steps:

  1. Recall and Review: Recall the insights from the “What’s Your Industry?” activity, including your definition of the generative AI industry and the key player map.
  2. Analyze: Apply the “Analyze” step of the framework:
    • Analyze the influence of each player (identified in the previous activity) on industry profitability.
    • Use concepts from the reading, the recall activity and previous lessons to support your analysis (e.g., Five Forces, value creation/capture, cost/differentiation advantage).
    • Helpful Hint: Refer to Section 2.4.3 of the “Industry Analysis” reading for detailed guidance on analyzing the players’ influence on profitability. Consider how the factors discussed (e.g., economies of scale, bargaining power, industry rivalry) apply to the generative AI industry.
  3. Respond: Apply the “Respond” step of the framework:
    • Based on your analysis, develop strategic recommendations for a company active in the industry you defined in the previous step.
    • Consider how the company can leverage its strengths, mitigate weaknesses, and respond to potential threats and opportunities.
    • Outline specific actions the company could take to enhance its competitive position and profitability.
    • Helpful Hint: Refer to Section 2.5 of the “Industry Analysis” reading for guidance on developing strategies to deal with the industry environment. Consider how the concepts discussed (e.g., positioning, exploiting industry change, shaping industry structure) apply to your chosen company.

Deliverables:

  • Engage in a rich and interactive discussion with your group, sharing your analysis and recommendations.
  • Be prepared to share your insights with the rest of the class, building on the diverse perspectives and industry definitions from the previous activity.

Remember: This is an in-class learning activity designed to facilitate discussion and deepen your understanding. The primary deliverable is active participation and insightful contributions to the group and class discussions.