?Rule of Three? Article.

?Rule of Three? Article.This assignment is worth 4 points. It is due on Monday the 28th of July. The assignment has several objectives:1. To find out if the Rule of Three has empirical evidence today, that is to think about the findings in the article in a critical and evaluative sense. 2. To learn to find and use resources for financial information. 3. To determine which companies have a competitive advantage in an industry. 4. To develop written presentation skills. 5. As usual, you will have an opportunity to present your findings if you wish to do so.Procedure:You will be assigned a company which is one of the Dow Jones Industrials company. Go to Google.com/finance and enter in the search field the name or symbol of the company assigned to you. After you have got to the page for that company, you willsee a chart for that company and then below the chart a list of about 10 companies that Google considers to be in the same industry as the company assigned to you.Click on Add or remove columns. Now for each company in the list you will see information for about 15 variables, such as company name, exchange, currency, andprice. (You will need to move the cursor back and forth to see all the variables).For this assignment you need only two variables: return on average assets, and revenue. Check these two columns, and uncheck all the other columns. Then click onsave changes.Choose only those companies for which figures are given for both of these variables. If there are more than 8 companies remaining, choose the eight companies with thehighest revenues.Add up all the revenue figures for the companies. Call this IR, for industry revenue. This is an approximation for total revenue in the industry. Divide each company?s revenue by IR. The resulting ratio is the market share of that company.Also calculate the average return on assets for the selected companies in your industry.On a chart plot market share of each company on the X axis, and the return on average asset for that company on the Y axis. Write the name of each company next to itsposition on the chart. Label each axis correctly (X axis ? market share, y axis ? return on assets).Show the percentage numbers on each axis from the smaller to thelarger sizes. (For example, 1%, 10%, 20%, 40% etc.).(In the examples of two student papers on the P drive, the paper by Charles has the correct format for the chart. The paper by Melanie does not have the correctformat for the chart).Now compare your chart to the Figure 1 given in the article Competitive markets and the rule of three. The article link:http://iveybusinessjournal.com/topics/strategy/competitive-markets-and-the-rule-of-three#.U9QumoBdWFY Your job is now to comment on how similar or different your results are from those in the article.In the accompanying brief paper, categorize the companies based on their market shares. Assume that those with market share of less than 5% are specialists. Thosewith market shares between 5 and 10% are in the ditch. Those with market shares of 10% and more are generalists. This is the assumption you should make, because thatis how the article defines these categories.Looking at the categories of the companies and their positions in the graph, comment on whether the ROA of specialist companies decreases as their market sizeincreases, whether the companies in the ditch have a poor ROA, and whether the generalist companies have increasing ROA as their market shares increase.Your results would either be mostly similar to the results in the article (shown in Figure 1 in the article), or be somewhat similar, or quite opposite of the resultsin Figure 1. Indicate how your results compare with the article?s claim, i.e. whether or not your data support the article?s conclusions.Your paper should also have a section on competitive advantage. For this section: Based on the ROA you calculated earlier for each company, calculate the average ROA for the industry. List the companies from the highest to the lowest ROA. In thislist of all companies, identify which companies do or do not have a competitive advantage (those above or below the average.)Before handing in your paper, check the following.Include a copy of this checklist with your paper and show that you have done each of the following:1. Did you have a graph that plots ALL companies in terms of the ROA and market share of each company? (Not one graph for each company, but all companies on onegraph).2. Did you label the x axis as market shareand the y axisas ROA for this graph?3. Did you show the percentages for each axis? (Figure 1 in the Sheth and Sisodia article does not do a good job here ? it does not show the percentages on theaxes).4. Did you label (name) each company at its location in the graph?5. Did you comment on your conclusion about the extent to which your graph supports the article?s conclusion?6. Did you list all the companies in order from the highest to the lowest return on assets, and then show which companies have a competitive advantage (if theirROA is above the industry average) and which have a competitive disadvantage (if their ROA is below the industry average).:

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