“Industry analysis refers to the analysis of industry’s environment that
guides the industry to grow and survive in a competitive environment and
gain a competitive edge in the industry as it predicts the future and
changes in the market and analyze the threats and opportunities in the
way ahead and making decisions and planning according to it.”
Format for Industry Analysis
Industry Description
This section should be brief (only a few lines) and give a general overview of the industry you are
entering.
Industry Trends
This area describes how well the industry is doing. One thing to consider when you are doing your
research for establishing a business is that this is for you, as the business owner, as well as potential
investors. While conducting your research, you may find that the industry you are about to enter is
significantly declining; which should be a red flag to reconsider.
Industry Size and Attractiveness
As a result of your research from the previous section, you will be able provide an overview of how large
the industry is and the potential for growth. State any benefits that exist for your industry, such as;
governmental subsidies or tax credits, are you a first mover or will you offer a product or service that
will compliment an existing product, how will your product or service fill a need?
Profit Potential
Your profit potential is a result of a number of elements. Here you may use Porter's 5 Forces to evaluate
your profit potential from an industry perspective. You will express any cost advantages, or pricing
opportunities. This area analyzes your competition and those internal attributes you may have that will
generate revenue.
Target Market
This section describes who you are targeting; their demographics. Are you targeting people that are
willing to pay a premium, or are they thrifty? Are your customers young, old, male, female,
technologically savvy, located in a particular area (a specific city, state, or country?). Do your customers
own their own home, or do they rent? Are they health conscious or do they prefer fast food?
Conducting some marketing research for this area will be useful as you will be able to analyze and
provide statistics that may help you get to know who your consumers are.
Competitive Position
This area reviews where you stand within your market or industry. Discuss who you will be competing
with, how well are they doing and how are you going to attract customers to come to you rather than
them. Is there room for growth (scalability)?
Forecast
In the next section, give your suggestions and forecast the possible future of the industry. Also, mention
the long term and short term valuation of the industry and what could be the challenging issues in the
future.
Conclusion and Recommendation
Write a summary of the entire report in one-two paragraphs. Include the key-factors of the report and
your suggestions in brief.
