Industry Analysis In Business Plan
You can use industry analysis to your advantage to identify opportunities and threats within your environment, as well as to plan for the future of your business, in the context of the future of your industry.
The only way you can survive in any competitive industry is that you will need to understand how you measure up against your competitors, and then use that information to your fullest advantage.
The importance of industry analysis for marketing capability cannot be overemphasized.
Industry analysis and the associated skills used to carry out industry analysis are absolutely critical for your business, as they will help you gain an intimate understanding of the environment within which you’re operating.
If the buyer enjoys most of the power in the market, then that buyer can demand lower prices on products, as well as better quality products and discounts, or after-sales services on those products.
For example, if you understand the kind of products being sold in the market, as well as how saturated the market is, you will be better able to figure out how you can differentiate yourself from the competition.
Their profitability will be affected by this, because there is a glass ceiling on the prices they can charge for their products and services.
There are generally two kinds of substitutes: the first are products that have the same quality or function as the product in question, but are products are offered at a lower price, while the second are products that are offered at the same price as the product in question but are of a higher quality or greater utility.
The threat of new entrants to the industry: How easy is it for a new firm to enter the industry?
Can a new player just walk in and set up shop without too many things working against that player?
Throughout the process of industry analysis, you will be able to identify many different threats and opportunities.