How to Conduct an Industry Analysis? Template, Examples

By analyzing competitors’ pricing strategies and their impact on market dynamics, businesses can gain insights into pricing trends, competitive positioning, and potential threats or opportunities. Attractive industries with strong upside are targeted for entry and expansion. Assessing competitive forces reveals where strategic moves are needed to reshape industry dynamics in a firm’s favor. Insights into changing consumer preferences, emerging technologies, and macro trends allow strategies to be tailored for competitive advantage. Industry analysis provides the strategic context for operating, investing and competing wisely.

Firms maximize revenues through differential pricing across customer tiers with varied willingness to pay. Sensitivity analysis on industry forecasts helps quantify potential downside scenarios and upside industry analysis in strategic management potential. Scenario analysis illuminates the strategic implications of various risk events. Recognizing inherent risks and limitations provides the context needed to make informed strategic decisions aligned with industry realities. Population size, geographic distribution, age structure, and urbanization rates impact market potential. Educational attainment, occupation mixes, cultural values, and lifestyle trends influence consumer behavior.

Competitive Price Response Analysis

Chinese brands collectively account for 75% of the share, having disrupted the duopoly of Samsung and homegrown Micromax since their entry in 2014. Conducting analysis across these areas leads to accurate industry perspectives and well-informed strategies. Regularly updating the analysis is essential for a strategy to keep pace with market evolution.

1. The number and relative market share of competitors influence rivalry and pricing pressures.
2. A market analysis conducted with potential customers who offer feedback or opinions about the product, service, or pricing can shed light on who the target market is and how to improve a company’s offerings.
3. Analysts find Strike very helpful in researching industries deeply and monitoring changes in industry landscapes.
4. Industry analysis, as the term suggests, is the study of a specific industry.
5. For instance, entry into the electric vehicle industry is difficult due to factors like high R&D costs and regulatory hurdles.
6. If the industry relies on a small number of suppliers, they enjoy a considerable amount of bargaining power.

Consumer Insights

Make sure you know everything there is to know about the chances of success in any industry before you jump in. A monopoly is the most commonly known market term and it’s where a single firm has no close competition. There will be numerous barriers to entry, questions around price control, and concerns about the behaviour of the single seller involved. The Duoply market is a type of oligopoly but where there are only two players. It’s usually the case that both players in the market are large firms and highly successful, having a whole industry just to themselves.

Defining A Market Structure

Keep monitoring market trends, adapting to changes, and staying ahead of the curve. With a solid foundation in industry analysis, you’re well-prepared to tackle challenges, seize opportunities, and make well-informed decisions that drive your business toward prosperity. So, set sail with confidence and let industry analysis be your guiding star on the path to success. By carefully analyzing your competitors and crafting effective market entry and expansion strategies, you can position your business for success in both domestic and international markets. By applying these frameworks and models effectively, you can better understand your industry, identify strategic opportunities and threats, and develop a solid foundation for informed decision-making.

Thus, established companies can enjoy prolonged benefits, facing a consistent set of rivals. For example, if a company produces phone cases they will be impacted when new phone models are released with different dimensions. They are likely to see an increase in the sales but also need to manufacture new cases.

The coffee industry in Brooklyn is set to grow steadily, with specialty coffee projected to increase by 7% annually over the next decade. Urban Fusion Bistro is positioned to meet the rising demand for high-quality, artisanal coffee. Operating requires compliance with local health, safety, and business regulations. Key permits include a business license, food service permit, and possibly a retail food permit, with initial costs of around $25,000. Once you have the document in front of you, thoroughly evaluate your business. Use the analysis section you created to guide the company’s direction in your focus area.

It divides your analysis into different sections, such as Political or Economic, and is often done on a country level. The most popular tool to use when establishing your industry profitability potential is Porter’s Five Forces. Using this framework you map out the factors in each category and award it a high, medium, or low influence on your profitability. In this type of market structure the products and services sold differentiate themselves from each other either in terms of quality, features, or branding. They remain close to each other in their end result (for example, a Big Mac vs a Whopper), but buyers are likely to have a preferred choice.

A competitor profile is a vital tool in industry analysis, offering concise insights into competitors’ strengths, weaknesses, strategies, and market positions. This helps businesses to stay ahead of the competition, capitalize on emerging opportunities, and maintain a competitive edge in the marketplace. In Porter’s3 analysis industry competitors can be “threatened” by new or potential entrants and substitutes. In food marketing systems, barriers to new entrants can exist, as well as barriers to international competitiveness.

Assessing technological dynamism and impacts ensures firms recognize resulting strategic implications. The political climate has major implications for an industry beyond formal regulations. Political stability enables consistent long-term planning while instability raises risks. Government support through subsidies, favorable policies, or other means creates advantages for domestic companies. Developing an industry outlook involves assessing growth potential through forecasting. Top-down forecasting starts with macroeconomic projections of GDP, jobs, inflation, interest rates, and other variables that drive industry performance.

Market Entry Modes

Analyzing current products or services, as well as future product launches, is a vital component of a situation analysis. Market research is needed to determine how viable a new product or service will be. Threat – Increased competition in generic drug manufacturing, underqualified professionals, and strict regulations are examples of threats to the pharma industry.

1. These strategies can help you effectively target and penetrate your chosen markets.
2. Substitutes can take two forms – products with the same function/quality but lesser price, or products of the same price but of better quality or providing more utility.
3. The concept of SWOT is not just applicable to industry analysis but to any decision that one needs to take.
4. This is the case in an industry with more competitors but with a single buyer constituting a large share of the industry’s sales.
5. Other industries, like the diamond industry, are very exclusive in the sense that few companies dominate, the most famous being De Beers.

You should also formulate your generic strategy, which is the overall approach that you will use to gain and sustain a competitive advantage in your industry. You can choose from strategies such as cost leadership, differentiation, or focus. At the highest level, corporate strategy involves high-level strategic decisions that will help a company sustain a competitive advantage and remain profitable in the foreseeable future. If the answer to the questions posed in the assessment stage is “No” or “Unsure,” we undergo a planning stage where the company proposes strategic alternatives. Potential strategic alternatives include changes in capital structure, changes in supply chain management, or any other alternative to a business process.