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Economics and Business: Industry Research Models

What is an industry?

What is an industry?

a collection of competitors that produce similar products or services to a defined market


Research

Primary research is the pursuit of firsthand information on a market and its customers. This includes focus groups, online surveys, phone interviews.  

Secondary research is data and public records used to draw conclusions. This includes trend reports, market statistics, industry content, and sales data from public, commercial, and internal (to company) sources.

SWOT

Industry Analysis

Analyze a particular industry, see its past trends, demand-supply mechanics, and future outlook

1. Review available reports and statistics

  • Market are volatile and industry factors change constantly -  is your report relevancy in the current market?

2. Focus on the relevant industry

  • Find out the relevant sub-industries.
  • Look at the different market segments in a particular industry.

3. Demand & supply scenario

  • Look at the demand-supply for a particular product or industry by studying past trends and forecasting future outlook.
  • Comparative analysis with other similar companies.

4. Competitive scenario

Porter’s Five Forces Model is helpful here to analyze the competitive landscape:

  1. Barriers to Entry
  2. Supplier Power
  3. Threat of Substitutes
  4. Buyer Power
  5. Degree of Rivalry

5. Recent developments

  • Look at influencing factors at the macro-level; these include recent industrial developments, innovation in the industry analysis report, sector valuations and global comparative valuation.

6. Focus on industry dynamics

  • An industry analysis should be specific to a particular industry to focus and understand the industry dynamics.
        For example, what is the per capita consumption of the product? What is the production?

Porter's Five Forces

How to Write an Industry Analysis

Overview
  • Mention historical data and the nature of the industry, including its growth potential.
  • State the influencing economical factors.
  • The concise overview of the industry should include its competitors and their operations. Write about similar products and services.
Detailed analytical presentation of the specific industry.
  • Highlight factors like geographical growth, consumer base, price fluctuations, past performances and income projections.
  • Use existing financial data and industry understanding to forecast industry growth for the next five or ten years.
  • Use a SWOT or the Porter’s Five Forces model.
  • Mention regulations relevant to the industry.
  • Give long-term and short-term valuations impacting the industry such as any foreseeable problems impacting the business in a negative fashion and potential corrective measures.
Wind up with a three or four line summary.