Narrative and Numbers: The Value of Stories in Business (Columbia Business School Publishing)

by Aswath Damodaran

Table 6.2 Competitive Analysis Category Questions Comments Growth Are there big differences in growth across companies within the business? If companies in the business are growing at different rates, you are trying to assess whether it is related to size, geography, or market segment. If there are big differences, what are the determinants of these differences? Profitability Are there big differences in profitability across companies within the business? If there are big differences in profit margins across companies, you are looking to see what types of companies earn the most and which ones the least. If there are big differences, what are the determinants of these differences? Investing for growth Is there a standardized investment model that is used by all companies in the market? As companies grow in this business, you are checking to see whether their investing needs decrease (economies of scale and networking benefits) or increase (with more competition). If not, are there differences in profitability and growth across companies with different models? Risk Are there big differences in risk (earnings variability and survival) across companies within the business? You are interested in whether there are variations in risk (operating and survival) across companies, and if so, what causes those variations. If there are big differences, what are the determinants of these differences?