Industry Analysis
Session 7
J0704-Business Plan
Provide the context for the
business
There is one rule for
industrialist and that is:
Make the best quality of
goods possible at the
lowest cost possible,
paying the highest wages
possible – Henry Ford
J0704-Business Plan
The Elements of an Industry
Analysis
•Industry Analysis Summary
•Industry Description
•Industry Size and Maturation
•Industry Trends and Impact Factors
•Industry Standard
•Industry Obstacles
•Industry Opportunity
J0704-Business Plan
Industry Analysis Summary
Write this one after you have finished the section, so you
can emphasized the important result of each segment
and present them in order
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Cover the best or unique features of the industry description
State your business economic sector
Describe your sector’s growth level as slow, moderate or fast
Identify your industry and describe its size and rate of growth as
compared with the gross domestic product
– Label your industry’s level of maturation as expanding or stablesupported by the actual growth rate percentage
– Include trends or factors that affect your industry
– Explain industry opportunities you consider important to the
future of your business
J0704-Business Plan
Industry Description
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Industry’s total sales (in currency) for most recent
years
Total number of companies in your industry
Dominant company profile in your industry
Company elements that best characterize all
companies in your industry : size, relative quality,
relative pricing, specialization, methods of production,
types of products or services, customer profile, market
segments, method of sales, maturity, management and
customer loyalty.
Any notable changes occurring in your industry
J0704-Business Plan
Industry Size and Maturation
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Size of economic
sector
Growth rate of
economic sector
Size of Industry
Growth rate of
industry
J0704-Business Plan
Industry Trends and Impact
Factors
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Nearly every industry has trends that
cause sales to go up and down.
To successfully deal with these, you
need to identify them and recognize their
impact on your industry and your
business
J0704-Business Plan
Industry Standard
Some of the more common industry
standards are:
• Return and allowance of gross sales
• Credit terms
• Sales commission percentage
• Retail markup
• Distributor markup
J0704-Business Plan
Industry Obstacles
• Is your industry too well established for
competition to break into easily ?
• The most common obstacles are :
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High capitalization
Complex technological needs
Expensive promotion costs
Cyclical economic extremes
Domination by large stabilized companies
Market shift to one-stop shopping
Patent & copyright
J0704-Business Plan
Industry Opportunities
• Look at your industry for the possibility of
eventually capturing market share or even
dominating it by developing some of the
strategies for your business:
– Lowest price
– Best customer service
– Best at solution
– Most innovative, etc
J0704-Business Plan