An industry report is a market evaluation tool that organizations and analysts use to understand an industry’s competitive dynamics better.
It enables them to gain a sense of what’s going on in an industry, such as demand-supply statistics, the degree of competition in the market, the industry’s state of competition with other emerging markets, the industry’s prospects in light of technological changes, the industry’s credit system, and the impact of external influences on the industry.
For a business, industry reports are a tool for determining a company’s standing compared to other industry participants. It enables them to detect both opportunities and hazards in their path and provides them with a solid understanding of the industry’s current and future state.
The key to thriving in an ever-changing business climate is recognizing and utilizing the distinctions between your industry competitors and yourself.
Contents
The types of industry analysis
There are three widely used and critical techniques for doing industry reports. The three ways are as follows:
- Model of Competitive Forces (Porter’s Five Forces)
- Analyses of Major Factors (PEST Analysis)
- Analyze the SWOT
Porter’s 5 Forces
Michael Porter proposed one of the most recognized models for industry analysis, dubbed Porter’s 5 Forces which are threats of new entrants, substitutes (in the market) threats, buyers’ bargaining power, suppliers’ bargaining power, and rivalry among the current competitors.
Porter asserts that examining the five factors provides a realistic picture of the market and simplifies the analysis by putting in perspective the competitive intensity and assessment of an industry’s attractiveness.
Analyses of major factors (PEST Analysis)
Broad Factors Analysis, often known as PEST Analysis, analyzes political, economic, social, and technological factors. The PEST analysis framework is an effective tool for studying the external environment. To do an industry study using PEST, an analyst will examine each of the model’s four components. These components include the following:
- Ethical: Political variables affecting a sector include particular rules and regulations concerning taxation, tariffs, environmental regulation, trade policies, labor laws, the overall political stability, and ease of doing business.
- Financial: Economic influences such as inflation, interest rates, foreign currency rates (FX), GDP growth rates, and capital market conditions (ability to acquire money) all have an effect.
- Social: The social effect of an industry is determined by human trends, including population growth, demography (age, gender, and so on), and behavioral trends such as fashion, health, and social movements.
- Technological advances: The technology component of PEST analysis considers elements such as breakthroughs and innovations that affect how businesses run and how individuals lead their lives. It takes into account both internal and environmental influences.
SWOT analysis
Strengths, Opportunities, Weaknesses, and Threats are the four components of a SWOT analysis. It is an excellent tool for synthesizing diverse industry factors and analyzing their consequences for the firm at hand.
- Internal: Internal variables that exist and have influenced the existing state of affairs and may remain that way.
- External: Typically, external influences are contingent occurrences. Assess their significance based on their chance of occurring and possible impact on the business. Additionally, determine if management has the purpose and capability to avoid/seize the opportunity of the threat.
The critical role of industry reports
Industry reports are critical as a method of market evaluation since it enables a corporation to comprehend market circumstances. It helps them in forecasting demand and supply, and hence the financial returns on their firm.
It illustrates the industry’s competitiveness and the expenses of entering and quitting the business. It is critical while developing a small company strategy. Analyses assist in determining whether a market is now in, if it is still developing and has room to grow, or has achieved saturation.
Author Bio:
Alison Lurie is a farmer of words in the field of creativity. She is an experienced independent content writer with a demonstrated history of working in the writing and editing industry. She is a multi-niche content chef who loves cooking new things.
