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Casing > Industry Deep Dive > Flashcards

Industry Deep Dive Flashcards

1
Q

What are some of the key risks that the auto industry faces? (3)

A
  • Foreign competition
  • Changing consumer tastes
  • Extensive competition impacts already low margins
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2
Q

What are some important characteristics of the auto industry?

A
  • High barriers to entry: economies of scale, established customer brand preferences
  • Consolidated market
  • Mature market
  • Labor and capital intensive
  • Low margins due to high competition; difficult to pass on increase cost of raw materials to the customer
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3
Q

What are some key revenue streams for the auto industry?

A
  • Warranties
  • Parts
  • Leasing
  • New car sales
  • Used car sales
  • Financing
  • Maintenance
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4
Q

Key trends in the auto industry

A
  • Increasing importance of electronics and software
  • Vehicle to everything
  • Electrification
  • Automation
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5
Q

Key revenue drivers for the restaurant industry (6)

A 
Food and bev
Merchandise
Licensing
Franchising 
Catering 
Merchandise
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6
Q

Key economic drivers for the restaurant industry

A

GDP
CCI (degree of optimism about the economy defined by spending)
Per Capita disposable income

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7
Q

Key risks for restaurant industry (3)

A

Food borne illness
Liquor license
Wage and hour lawsuits

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8
Q

New ideas for restaurant industry (2)

A

New fast casual restaurants taking market share from fine dining restaurants and QSR
Implementation of technology to increase profitability

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9
Q

Risks/Challenges for Media/Entertainment Industry (4)

A

New content
Cord Cutting
Adapting to new technologies (ie: DVRs)
Consumer expectations (ie: customised experience on demand and multichannel)

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10
Q

Key economic drivers for media/entertainment industry (3)

A

Royalties and monetization
Growth of streaming and mobile video
Piracy and copyright enforcement

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11
Q

Key costs for media/entertainment (3)

A

Marketing
Labor
New tech

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12
Q

Media/entertainment market characteristics

A

Highly competitive with a few major players owning most of the market

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13
Q

Characteristics of the telecom industry

A

Capital intensive industry creates high barriers to entry; consolidated, mature market

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14
Q

Telecom industry risks

A

Commoditised services

High exit barriers - high sunk cost

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15
Q

Key costs for the telecom industry

A

Infrastructure
Wages
Frequency licenses
Marketing

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16
Q

Telecom industry (technology) trends (3)

A

5G - Capex is increasing
AI
IoT

17
Q

Telecom industry and COVID 19

A

The ongoing shift to remote work will drive demand for networking infrastructure and connectivity

18
Q

Key revenue streams for the telecom industry

A

Data subscription
Text and image communication
Voice calls
Value added services

19
Q

Key cost drivers for commercial banking

A 
Wages (Salaries)
Marketing
Bad debt expense
Interest rates on deposits
Branch and compliance costs
Overhead costs: paper fee, error rate costs for manual processing
20
Q

Characteristics/trends for commercial banking (including basic overview of how they make money)

A

Commercial banks make money by providing and earning interest from loans such as mortgages, auto loans, business loans, and personal loans. Customer deposits provide banks with the capital to make these loans.
Commercial banks offer consumers and small to mid-sized businesses with basic banking services including deposit accounts and loans.

Consolidated, mature industry with primary growth through acquisitions

Offshoring of various functions (ie: call centers) to reduce costs

Larger players’ services to beyond commercial banking into investment banking

Cross selling

Increase in mobiel banking

21
Q

Commercial banking revenue streams

A

Interest rates
Service fees
These fees vary based on the products, ranging from account fees (monthly maintenance charges, minimum balance fees, overdraft fees, non-sufficient funds (NSF) charges), safe deposit box fees, and late fees.
Credit cards

22
Q

Key customers commercial banking (4)

A

Individuals
High net worth individuals (priority segment)
Small medium businesses
Private companies looking to go public

23
Q

COVID effects on utilities industry

A

Loss of demand from commercial and industrial sectors

Operational complexity: The dual objectives of keeping control rooms staffed and operational and crews out in the field completing critical projects – all while protecting the health and safety of their workforce – is unchartered territory for utilities.

24
Q

Risks for utilities companies (3)

A

Clean energy threatens the future of traditional power generation methods
Seasonal demand leads to uncertain estimates
Energy efficient appliances decrease consumption

25
Q

Costs for utilities companies

A 
Purchased power accounts (nearly half of total cost)
Infrastructure
Wages
Marketing
Maintenance contracts
26
Q

Utilities Industry Characteristics

A

High investment costs
Government incentives for sustainable initiatives
Bundles with renewable energy
Regulated by PUC
Price sensitive consumers - trend toward cheapest options, pricier competitors get priced out of the market

27
Q

Airline industry Characteristics

A

Consolidated industry
High fixed cost
High barriers to entry: very high start up costs, availability of gate space, airport leasing agreements
Legacy carriers compete with low cost carriers. New entrants more common in the low cost model

28
Q

Airline industry costs

A 
Fuel
Labor
Marketing
Terminal fees (paid monthly)
Insurance/legal fees
29
Q

Airline industry key revenue drivers

A 
Ticket sales
Baggages and onboard services charges
Credit cards
Value added services (food and beverages, Wifi)
Cargo transportation
30
Q

Airline industry customer segments (and price sensitivity info - if relevant)

A

Leisure (price sensitive)
Business (important due to margins and services purchased)
Freight/cargo transportation

31
Q

Airline industry risks (3)

A

Changes in fuel prices
Macroeconomic conditions influencing the amount of leisure travelers
Very competitive market with many foreign airlines partly government subsidized

32
Q

Oil industry: Upstream vs downstream vs midstream

A

Upstream - companies involved in the exploration of oil and gas
Capital intensive
Technology intensive
High risk
Instead, they hire contract drilling companies to drill wells for them and the contract drilling companies generally charge for their services based on the amount of time they work for an E&P company.

Midstream - move extracted raw materials to refineries
Risks: high regulation
Key costs: shipping, trucking, pipelines, and storing of the raw

Downstream - refineries

33
Q

Retail industry: key cost factors

A 
Cost of Goods Sold (74% of costs)
Transportation
Wages
Rent and utilities
Marketing
34
Q

Retail industry: Revenue

A 
Product sales (brick & mortar, online)
Slotting fee
Advertising
Affiliate marketing
Cross-selling additional products and services
Loyalty and rewards programs
35
Q

Retail industry: Risks (4)

A

Changes in disposable income
Demand and supply issues
Overstock
Easy entry invites competition

36
Q

Retail industry: COVID

A

Income disparities will drive continuing business toward off-brand and discount retailers, and online shopping will continue to accelerate.
Demands for convenience drive contactless transactions
Growth of e-commerce

37
Q

Retail industry trends (4)

A

D2C
Private label brands
Digital marketing
Omnichannel purchasing

38
Q

Key economic drivers for the retail industry (5)

A 
Consumer Confidence index
Per capita disposable income
International Export/Import
Gross Domestic product/inflation
Commodity prices (e.g. gold price for jewelry)

Casing (6 decks)

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