Must Haves in an Industry Analysis
After I have pointed out elsewhere in other blogs and articles, I’ve belief that studies an important component of good business and decision-making. Indeed, a proper strategic business plan is useless without solid research to help statements and commentary on markets as well as the industry that you simply operate. Additionally, it’s not easy to visualize strategy formulation without any understanding of the industry. This is a further thought: What industry are you currently presently in? I leave doing this along with you right now!
Many of us bandy across the term ‘industry analysis’, but the facts, along with what should an excellent industry analysis report contain?
Questions clarified with a business analysis include:
– Which are the industry dominant economic traits?
– What competitive forces have been in work on the market and the way strong is it?
– Which are the forces of change on the market along with what impact would they have?
– Which publication rack inside the most effective/weakest competitive position?
– What main reasons determines failure or success?
– How attractive could be the industry with regards to its prospects for nice profitability?
Industry Analysis Outline
Getting identified the questions which must be clarified with a business analysis, this list provides an outline in the report:
o Relevant governmental or environmental factors
o Economic indicators relevant for your industry
– Porter’s Five Forces
o Threat of latest entrants
– Economies of scale
– Capital needs
– Proprietary product variations
– Absolute cost advantages
– Brand identity
– Utilization of distribution
– Expected retaliation
– Supplier concentration
– Information on substitute inputs
– Differentiation of inputs
– Requirement for volume to supplier
– Impact of inputs on cost or differentiation
– Threat of forward or backward integration
– Utilization of capital
– Utilization of work
– Buyer concentration versus industry concentration
– Buyer switching costs
– Buyer information
– Threat of backward integration
– Survive (usage of intermediaries)
– Brand identity of buyers
– Cost sensitivity
– Cost to total purchases
o Substitute products
– Relative cost/performance relationship of substitutes
– Buyer inclination to substitute
– Quantity of concentration and balance among competitors
– Diversity among competitors
– Industry rate of growth (past and forecasted)
– Fixed costs/helpful
– Intermittent overcapacity
– Product differentiation
– Growth and development of foreign competition
– Corporate stakes
– Exit barriers
o Critical success factors
o Prognosis – the assessment for future years with this particular industry
o Industry ratios
o Other relevant indices
o Other relevant data
Clearly, its not all these sections are relevant for individuals industries, nevertheless it provides an extensive outline in the likely contents.