This industry analysis in strategic management facilitates strategic decisions on product differentiation, branding, and marketing based on consumer perceptions. Industry analysis is the process of evaluating an industry’s current state and future outlook. It involves examining the industry’s characteristics, competition, growth trends, key success factors, and overall attractiveness to understand profit potential. If the industry relies on a small number of suppliers, they enjoy a considerable amount of bargaining power.

Economic

This aftermarket opportunity will potentially grow into a ₹76 billion market by 2025. The supplier landscape is evolving, with players like Foxconn, Wistron, Dixon, and Optiemus setting up plants in India. Developing the components ecosystem to reduce import dependence is a major priority. Access and download collection of free Templates to help power your productivity and performance. Internal factors that already exist and have contributed to the current position and may continue to exist.

Elastic demand means volumes fluctuate substantially with price, restricting pricing control. Four factors indicate price sensitivity potential, including buyer demographics, product differentiation, competitive intensity, and the availability of substitutes. Competitor analysis evaluates rivalry dynamics that influence industry outcomes. Market share analysis reveals leaders well positioned for growth versus laggards struggling to compete. Financial analysis highlights profitability drivers and metrics that represent benchmarks to catch up to or surpass.

Additional Resources

Few Indian firms like Invest India, India Brand Equity Foundation (IBEF), CRISIL provide industry analysis reports. The social impact on an industry refers to trends among people and includes things such as population growth, demographics (age, gender, etc.), and trends in behavior such as health, fashion, and social movements. Broad Factors Analysis, also commonly called the PEST Analysis stands for Political, Economic, Social and Technological.

Know your position

1. Israel found itself unable to compete internationally with its citrus products, but found a new way to remain competitive internationally.
2. Start leveraging these powerful tools today to boost your strategic planning and gain a competitive edge in your industry.
3. Population size, geographic distribution, age structure, and urbanization rates impact market potential.
4. Value chain analysis espouses three roles for marketing in a global competitive strategy.
5. Compliance costs and constraints posed by government regulations significantly impact strategies and profit margins.
6. Other strategies include “market flanking” – a classical Japanese approach.

The other consideration when defining your industry is the geographic spread. You might be local, regional, national, international, truly global… this will have a big impact on deciding how you judge your market growth opportunities later. While Porter certainly entertained a competitive model where rivalry wasn’t just a war to the death, the problem is that he didn’t go far enough. In an interconnected global economy, alliances and cooperative strategies are often as pivotal to success as having a competitive advantage, a factor that the model doesn’t explicitly consider. Suppliers, especially those with unique resources or enjoying a monopoly, could dictate terms, lower profits, or, in extreme cases, forward-integrate into the buyer’s industry. Customers, too, wield power, especially when buying in bulk or when they can just go elsewhere quickly or choose to bypass companies for in-house products.

1. World markets are a stage on which a player must choose or find his unique part.
2. Companies like Microsoft have successfully integrated prescriptive analytics into their operations.
3. Porter’s five forces come together in different ways for any given sector.
4. Industry analysis is an important part of a business plan since it gives you a clear vision regarding multiple aspects of the field your company is or wants to occupy.
5. These sources provide a comprehensive view of market trends, competitor strategies, and industry performance.
6. Key manufacturers include Xiaomi, Samsung, Vivo, Oppo, Realme, and Transsion brands like Itel.

Our goal is to serve coffee enthusiasts and casual drinkers with high-quality, single-origin coffees and unique blends. This part highlights the key findings of the analysis and quick recommendations. Herein, you can mention the level of your research, whether it’s on a local, regional, provincial, national, and/or global level. You can also briefly highlight the core points that you will be expanding upon in the upcoming sections. Make a list of your competitors and explore ways to gather research on them. It’s important that each of these KSFs can be achieved in line with your chosen strategic position and SWOT.

After identifying attractive industries, individual stock selection involves comparing company fundamentals like margins, debt levels, and return on invested capital. Total addressable market size and growth forecasts highlight revenue potential. Large, rapidly expanding TAMs signal greater opportunities for top players to capitalize on demand.

Unattractive, declining, or highly competitive industries impose headwinds that constrain performance regardless of how well-run the company is. PEST analysis evaluates the external political, economic, socio-cultural, and technological environment. It identifies potential opportunities to tap into as well as threats to prepare for.

It is essential to look at their production, marketing, financial and management resources. If the rate is “competitive” it will encourage investment, if not, it will discourage competition. Porter1 (1980) and (1985) looked at the forces influencing competition in an industry and the elements of industry structure.

Accurately projecting industry growth provides the foundation for strategy development. Buyer analysis provides perspective on buyer negotiating leverage, which also affects profitability. Buyer concentration is a key factor, with a small number of large buyers able to exert influence. Buyers incurring low switching costs to change suppliers also gain bargaining power.

Here’s a breakdown of an industry analysis template with insights into each section. Market entry and expansion strategies are crucial for businesses looking to enter new markets or expand their presence within existing ones. These strategies can help you effectively target and penetrate your chosen markets. Value Chain Analysis dissects a company’s activities into primary and support activities to identify areas of competitive advantage. Primary activities directly contribute to creating and delivering a product or service, while support activities facilitate primary activities.

What are the popular frameworks of industry analysis?

Industries where new firms can enter more easily almost always have lower profit margins, and the firms involved each have less market share. Strategic analysis at the time of Porter’s article tended not only to love acronyms (SWOT, PEST, PESTEL, BCG Matrix, ETPS, etc.) but also models focused on the internal dynamics of individual companies. Measure the importance of external factors in terms of their happening and its impact on the business entity. The technological aspects that have an impact on the industry include development and advancement that can change the way of operating a business and even the way people now live their lives.

The analysis also evaluates size and growth trends, market share, profitability, and competitor strengths and weaknesses. The end goal is to synthesize findings into an industry outlook that highlights strategic opportunities and threats. Effective industry analysis provides fact-based insights to guide strategic decisions and investments. Porter’s five forces is a framework developed by Michael Porter that helps businesses analyze the competitive forces within an industry. By assessing these forces, businesses can understand the level of competition and develop strategies to gain a competitive advantage.